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What Is Escheat In Real Estate?

What Is Escheatment And What Does It Mean For You

 

as a property owner? The definition of escheatment is the reversion of property to the state when there is no heir to inherit it. In other words, if you die without leaving a will and there are no living relatives who can inherit your property, it will revert to the state.

This might seem like a rare occurrence, but nearly half of the states in this country have laws which require investors to report their ownership interests. The actual percentage of unclaimed properties is not known because some investors fail to report.

How It Affects Property Owners

Investors are required to notify your state’s unclaimed property office before selling any interest in real estate. If there is no heir to inherit the property, the state will become the new owner. If you are selling a property that is subject to escheatment, be sure to include this in your sale agreement.

The good news for property owners is that most states have a statute of limitations for claiming unclaimed property. This means that if the rightful heir does come forward after the property has been sold, the state will usually return it to them.

Escheatment is an important issue for property owners to be aware of. By understanding how it works, you can avoid any surprises down the road.

How Do I Avoid Escheatment Of My Property?

If you do not have a will or any heirs, contact your state’s unclaimed property office. Ask them how to properly transfer the interest in your property. Typically there are several ways of accomplishing this including transferring it to an heir or donating the interest to them. If you are selling an interest in real estate that is subject to escheatment, be sure to include this in your sale agreement.

If you have any questions or concerns, contact an attorney who specializes in this area of the law.

Why Escheatment Is A Bad Thing And How To Avoid It

Typically, the owner must make a claim to recover their property; however, this is not always true and the details vary by state law. If you do not make a claim within the allotted time frame, typically three to five years or more depending upon your state’s law, the property will escheat to the state.

There are a few reasons why escheatment is a bad thing. First, it can be difficult, if not impossible, to reclaim your property once it has been transferred to the state. Second, states typically do not have the same incentives as individuals to return unclaimed property to its rightful owner. Finally, escheatment is detrimental to the economy.

What Are Some Other Reasons Why People Lose Their Property To Escheatment?

People can lose their property to escheatment for a number of reasons, including but not limited to: forgetting to claim a forgotten bank account or stock certificate, moving without leaving a forwarding address, death without a will specifying what should happen to unclaimed property, or bankruptcy.
How can I reclaim my lost property if the person who took it from me has died or disappeared?

This is a difficult question to answer, as it depends on the specific circumstances of your case. You may need to seek legal assistance in order to reclaim your lost property.

Other Ways You Can Lose Your Home

Other things that can cause you to lose your home, such as bankruptcy, foreclosure, divorce, death of spouse/spouse’s estate executor, etc., are not easily fixed by reclaiming your unclaimed property.

The most common type of unclaimed property is abandoned bank accounts and stocks, but it can also include forgotten utility deposits, uncollected insurance payments, or unused gift cards.

Wrapping Up

Escheat is a legal term that refers to the process of transferring ownership back to the state when an asset owner dies without heirs or designates. When this happens, it can mean that money owed by the deceased person must be repaid with interest before any proceeds are given to their estate or beneficiaries.

The escheator may also have some responsibility for managing property on behalf of the state until they find someone who has better claim over them under law. It’s possible that you would need help from an attorney if your real estate was in danger of being escheated because you don’t know who might want it more than anyone else or how long you could wait before moving forward on selling it yourself.

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