Definition of escheat
escheat (plural escheats)
- (law) the return of property of a deceased person to the state (originally to a feudal lord) where there are no legal heirs or claimants
- (law) the property so reverted
to escheat (third-person singular simple present escheats, present participle escheating, simple past and past participle escheated)
- to revert by this process
Escheat is a common law doctrine that operates to ensure that property is not left in limbo and ownerless. It originally referred to a number of situations where a legal interest in land was destroyed by operation of law, so that the ownership of the land reverted to the immediately superior feudal lord.
Most common-law jurisdictions have abolished the concept of feudal tenure of property, and so the concept of escheat has lost something of its meaning. Even in England and Wales, where escheat still operates as a doctrine of land law, there are unlikely to be any feudal lords to take property on an escheat, so that in practice the recipient of an escheated property is The Crown.
The term is often now applied to the transfer of the title to a person's property to the state when the person dies intestate without any other person capable of taking the property as heir. For example, a common-law jurisdiction's intestacy statute might provide that when someone dies without a will, and is not survived by a spouse, descendants, parents, grandparents, descendants of parents, children or grandchildren of grandparents, or great-grandchildren of grandparents, then the person's estate will escheat to the state.
In some jurisdictions, escheat can also occur when an entity (such as a bank) holds money or property (such as an account in that bank) and the property goes unclaimed. In many jurisdictions, if the owner cannot be located, such property can be revocably escheated to the government.
In business, it is the process of turning over unclaimed or abandoned payroll checks, or stocks and shares whose owners cannot be traced, to a state authority (in the United States). Every company is required to file unclaimed property reports with state annually and to make a good-faith effort to find the owners of their dormant accounts. The escheating criteria are driven by individual state regulations.
English common law
Thus, under English common law, there were two main ways an escheat could happen:
- A person's property escheated if they were convicted of a felony (other than treason, when the property was forfeited to the Crown). If the person was executed for the crime, their heirs were ineligible to inherit. (In most common-law jurisdictions, this type of escheat has been abolished outright. For example, the rule has been abolished in the United States under Article 3 § 3 of the United States Constitution, which states that attainders for treason do not give rise to posthumous forfeiture, or "corruption of blood".)
- If a person had no heirs to receive their property under a will or under the laws of intestacy, then any property that they owned at death would escheat. (Again, this rule has been replaced in most common-law jurisdictions by bona vacantia or a similar concept.)
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