States safeguard assets from dormancy through unclaimed property programs. These programs encompass a wide range of financial instruments, including forgotten bank accounts, uncashed checks, security deposits, and insurance proceeds. When the rightful owner of an asset does not initiate contact or activity for a specified period, typically ranging from one to five years, the asset is deemed “abandoned” and escheated, or transferred, to the state’s custody. This safeguarding function ensures that these assets are not lost permanently and remain accessible for retrieval by their owners.
Holding these assets provides several crucial benefits. It protects owners from potential fraud or loss. It also provides states with a revenue source that can be used to fund essential public services. Historically, unclaimed property laws evolved to resolve the issue of abandoned possessions, dating back to ancient Rome and the feudal concept of escheat. Modern unclaimed property programs arose in the 20th century as the complexity of financial instruments and the mobility of populations increased the frequency of abandoned assets.
