What Is Escheatment?

Escheatment Explained in Less Than 5 Minutes

Updated on December 13, 2021

Reviewed by

Young couple using laptop — Photo:
AzmanL/Getty Images

Definition

Escheatment occurs when money in a deposit account appears abandoned for a specified time period, and the financial institution that holds the dormant account must turn it over to the state. The original owner can still access the money from the state, so long as they can make a proper claim for it.

Key Takeaways

Escheatment is the process by which unclaimed funds in accounts with a bank or other financial institution are turned over to the state.
The amount of time before funds are considered abandoned varies by the type of property and the state it is in, but it generally ranges between one and five years.
To reclaim your escheated funds, you will need to fill out the proper forms and follow procedures set by the specific state.

Definition and Example of Escheatment

When money lies dormant in a deposit account or appears to be abandoned, the bank or other organizations with which the money was deposited aren’t necessarily allowed to just keep that money for their own use. After a period of time, they’re required to turn it over to the state. This is called "escheatment." Once it's turned over to the state for safekeeping, the owner of the money can still access it by making a proper claim for it.

It’s not only money in deposit accounts that will be escheated. If you forget to cash a check, that money can be escheated. Likewise, if you don’t claim your wages, that money can also be escheated.

How Escheatment Works

When personal property goes unclaimed, and the current bank or firm that holds the funds has been unable to locate the owner, the state can legally claim it through escheatment. The state must follow certain procedures to document the escheatment and must allow an opportunity for the original owner to come forward.

Here are some of the types of property that can go unclaimed and will be escheated:

Checking accounts
Savings accounts
Payroll checks and commission checks
Vendor credits
Utility deposits
Stocks, bonds, dividends, mutual fund, and brokerage accounts
CDs
IRAs
Life insurance proceeds
Annuity contracts
Oil and gas or other mineral royalties
State tax refunds
Pension benefits

Note

Federal tax refunds won't be escheated to the state. Be mindful also that you only have three years to claim a federal tax refund.

When Are the Funds Turned Over to the State?

The amount of time that passes before the account will be turned over depends on the state. Each state has different periods of time and other requirements for escheatment. The amount of time also depends on the type of money or account that’s being escheated. Bank accounts, checks, and wages may be subject to different periods.

It's important to note that laws may change, and that the authoritative source of escheatment rules lies with each state. However, by way of example, the chart below shows the state and the amount of time after which the bank or another payor will turn the money over to the state.

State	Bank Account	Checks/Drafts	Wages/Salaries
Alabama	3 years*	3 years	1 year
Alaska	5 years	5 years	1 year
Arizona	3 years	3 years	1 year
Arkansas	3 years	3 years	1 year
California	3 years	3 years	1 year
Colorado	5 years	5 years*	1 year
Connecticut	3 years	3 years*	1 year
Delaware	5 years	5 years	5 years
D.C.	3 years*	3 years	1 year
Florida	5 years	5 years	1 year
Georgia	5 years	5 years	1 year
Hawaii	5 years	5 years	1 year
Idaho	5 years	5 years	1 year
Illinois	3 years	3 years	1 year
Indiana	3 years	3 years	1 year
Iowa	3 years	3 years	1 year
Kansas	5 years	5 years	1 year
Kentucky	3 years	3 years	1 year
Louisiana	5 years	5 years	1 year
Maine	3 years	3 years	1 year
Maryland	3 years	3 years	3 years
Massachusetts	3 years	3 years	3 years
Michigan	3 years	3 years	1 year
Minnesota	3 years	3 years	1 year
Mississippi	5 years	5 years	5 years
Missouri	5 years	5 years	3 years
Montana	5 years	5 years	1 year
Nebraska	5 years	5 years	1 year
Nevada	3 years	3 years	1 year
New Hampshire	5 years	5 years	1 year
New Jersey	3 years	3 years	1 year
New Mexico	5 years	5 years	1 year
New York	3 years	3 years	1 year
North Carolina	5 years	5 or 7 years*	1 year
North Dakota	5 years	2 years	2 years
Ohio	5 years	5 years	1 year
Oklahoma	5 years	5 years	1 year
Oregon	3 years	3 years	3 years
Pennsylvania	3 years	3 years	2 years
Rhode Island	3 years	3 years	1 year
South Carolina	5 years	5 years	1 year
South Dakota	3 years	3 years	1 year
Tennessee	3 years	3 years	1 year
Texas	3 years	3 years	1 year
Utah	3 years	3 years	1 year
Vermont	3 years	3 years	1 year
Virginia	5 years	5 years	1 year
Washington	3 years	3 years	1 year
West Virginia	5 or 7 years*	5 years	1 year
Wisconsin	5 years	5 years	1 year
Wyoming	5 years	5 years	1 year

*Be sure to consult your specific state laws for additional requirements.

Possible Fees Charged

Banks often charge fees before they turn the money over to the state. Some charge monthly service fees, which you’re probably familiar with on your checking account, although many banks charge a smaller fee once they determine that the account is dormant or inactive, and if the balance is small.

Note

Some banks charge a special escheat fee before the money goes to the state.

Requirements for Claiming Escheated Funds

Start by searching on a public database like Unclaimed.org or MissingMoney.com. These sites can link you to the unclaimed-funds sites for each state, and from there you can search for funds that you might be able to claim. You can also run a search for "unclaimed property in [your state]."

If your property is turned over to the state, the state will have a claims process you must undertake to verify that you’re entitled to the money before it will be released to you. Some require special forms, some allow you to claim online, and some require special documents or identification.

Was this page helpful?

Thanks for your feedback!

Tell us why!

Sources

The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

U.S. Securities and Exchange Commission. "Escheatment by Financial Institutions." Accessed Nov. 9, 2021.
National Association of Unclaimed Property Administrators. "What Is Unclaimed Property?" Accessed Nov. 9, 2021.
USA.gov. "Unclaimed Money From the Government." Accessed Nov. 9, 2021.
Patriot. "What Is Escheatment?" Accessed Nov. 9, 2021.