Escheat

Fact Scenario I

Leonard lived to the ripe old age of 102. He died without a will. Leonard's parents died years ago, as did his siblings. His only cousin also died before Leonard. Thus, Leonard died without heirs. After Leonard's death, the state claimed Leonard's house, as well as the property on which it was situated.

Fact Scenario II

Josephine grew up during the Great Depression. She was nervous about putting all of her savings in just one bank. Therefore, Josephine scattered her savings in numerous banks. After Josephine's death, the executor of Josephine's death made a diligent attempt to locate all of Josephine's bank account. The executor missed one account: a savings account at State Street Bank with a balance of $2,500. Years and years passed by after Josephine's estate was closed. Each year, State Street Bank advertised the account in the local newspapers, along with other accounts, as unclaimed property. No one ever came forward to claim the account. Eventually, the state claimed the funds in the account.

Law of Escheat

Briefly stated, the law of escheat mandates the reversion of an individual's property to the state in the event the individual dies without heirs or when the property is abandoned by the individual. The law of escheat applies to both real property and personal property.

The law of escheat finds its roots in ancient law. It is premised on the principle that land owned by an individual with no heirs or abandoned by the individual should revert to the state for the benefit of others.

For the most part, individuals prepare wills before their deaths. It is unusual for an individual to die without any heirs. Thus, escheat is not a frequent method by which the state obtains title to property.

The law of escheat varies somewhat from state to state, but may be found in the state constitution and/or the state statutes. In some jurisdictions, title to the property at issue vests in the state immediately upon the death of the individual or the abandonment. Other states require the state to undertake some type of formal procedure before title to the property vests in the state. Generally speaking, the law of escheat is not favored by courts. Thus, courts strictly construe the statute.

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