escheat
American Heritage Dictionary:
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es·cheat
(ĭs-chēt') 
n.
To revert or cause to revert by escheat.
n.
- Reversion of land held under feudal tenure to the manor in the absence of legal heirs or claimants.
- Law.
- Reversion of property to the state in the absence of legal heirs or claimants.
- Property that has reverted to the state when no legal heirs or claimants exist.
To revert or cause to revert by escheat.
[Middle English eschete, from Old French (from escheoir, to fall out) and from Anglo-Latin escheta, both from Vulgar Latin *excadēre, to fall out : Latin ex-, ex- + Latin cadere, to fall.]
escheatable es·cheat'a·ble adj.Related Videos:
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escheat
Barron's Banking Dictionary:
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Escheat
Reversion of property to the state under certain prescribed conditions when the owner dies without heirs or if a depositor's account remains inactive for a specified number of years and the owner cannot be located. Property may be redeemed if the owner reappears.
Barron's Real Estate Dictionary:
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escheat
The reversion of property to the state in the event that the owner dies without leaving a will and has no legal heirs.
Example: Abel dies without a will. No heirs are found. His property escheats to the state.
Example: Abel dies without a will. No heirs are found. His property escheats to the state.
| Escape Clause, Escalator Clause | |
| Escrow, Escrow Account |
The assumption of ownership of property by the state if no other owner can be found.
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This entry contains information applicable to United States law only.
The power of a state to acquire title to property for which there is no owner.
The most common reason that an escheat takes place is that an individual dies intestate, without a valid will indicating who is to inherit his or her property, and without relatives who are legally entitled to inherit in the absence of a will. A state legislature has the authority to enact an escheat statute.
In feudal England, escheat was a privilege exclusively given to the kings. The policy then was to preserve the wealth of noble families by permitting one individual to inherit an entire estate. There was no right to write a will leaving that property to several heirs because that would have the effect of breaking up the estate. In addition, the law designated certain heirs who were in line to inherit the estate. If there was no living person of a designated class to inherit, the king took the property by escheat.
Historically, reasons existed for escheat apart from the absence of heirs to inherit a decedent's property. When corporations were subject to strict regulation, it was unlawful for a corporation to own property in any way not permitted by its state-granted charter. Any property beyond that needed by the corporation for the operation of its business, or in excess of the amount designated in its charter or held for a period of time beyond that which was permitted, was subject to escheat.
Certain states mandated escheat of property belonging to religious societies that either promoted polygamy or neglected to incorporate as required by law. Additionally, where public lands were provided for settlers, statutes frequently made provisions for escheat when one individual took possession of more than the permitted acreage or did not properly cultivate the homestead. Property that still might be subject to escheat is that belonging to persons who die in a state institution, such as a prison, mental hospital, or veteran's home.
Dissimilarities
Escheat is distinguishable from forfeiture since, in spite of the fact that the effect is identical under some statutes, forfeiture can be for any type of property interest, including possession, the right to inherit, or the right of reversion if a certain condition was violated by the present owners. Escheat means total relinquishment of ownership. Whereas a forfeiture operates against the individual who has an interest in the forfeited property, an escheat takes place due to the lack of any person with a valid interest in the property.
Forfeiture is often used as a penalty for an illegal act, while escheat is not currently linked to any illegality.
Escheat is also distinguishable from reversion, although such distinction has not always been made. A reversion arises only where some remnant of ownership remains in the individual claiming a right to get back the land. The right of reversion can be asserted when some specific condition arises to trigger the right to reclaim. An escheat can occur even though the owner's title is in fee simple — that is, complete and unconditional.
Succession is the passing of a decedent's property to his or her heirs. Escheat is not treated in law like succession; it is completely separate from succession.
The law does not favor escheat. Courts actively seek to avoid it and, as a result, have abandoned most of the grounds for escheat that were recognized centuries ago in England.
Federal law proscribes corruption of blood and forfeiture of an entire estate as penalties for convicted criminals.
Property Subject to Escheat
Ordinarily, the property subject to escheat is all the property within the state belonging to the original owner upon his or her death. Although initially the doctrine was applicable solely to real property, it presently extends to personal property, including such intangibles as bank accounts and shares of stock.
A state cannot appropriate property by escheat merely because that property is within its boundaries. Laws in each state prescribe directives for deciding when a deceased person's property is subject to escheat.
Certain other types of property can be the subject of escheat for lack of a known owner. The determination is contingent upon state law.
Certain statutes specify that the property of charitable or religious institutions escheats upon dissolution if its donors have not retained the right to recover it when it is no longer used for religious or charitable objectives.
At common law, any property that belonged to aliens was subject to escheat. Laws preserving this rule are considered constitutional.
Unclaimed or abandoned property escheats to the state under some statutes. However, the state cannot merely declare property abandoned and appropriate it. Such laws must function within constitutional limits by observing the requirements imposed by due process. The state is required to adopt a routine procedure for notifying the public and must provide potential claimants an opportunity to argue that the property might belong to them. Without declaring that certain abandoned property has been escheated, the state may lawfully possess the property and hold it for a period of time so that claims can be asserted. A state is not mandated to take over unclaimed property but may choose to exercise the power to escheat only when the value of the property does not exceed the expense of legal proceedings.
Items subject to escheat under various statutes include abandoned bank accounts, deposits left with utility companies, stock dividends whose owners cannot be found; unpaid wages; unclaimed legacies from the estate of a deceased relative; insurance money to unknown beneficiaries; and unclaimed money retained by employers or public officials.
Procedure
Escheat statutes prescribe a procedure for location of the rightful owner. If such effort is unsuccessful the property should be applied for the benefit of the public rather than merely the individual who is holding it when it becomes apparent that no owner can be found.
In some states title to some property automatically passes to the state when it escheats for lack of a proper claimant. In other states, a certain period of time must elapse prior to the commencement of escheat proceedings. This does not bar a claimant from stating his or her claim before completion of the escheat proceedings. Some laws require claimants to assert their rights within a period of time or forfeit them. Often, states mandate that individuals administering estates notify the state government of the existence of property that might be subject to escheat. If the state is not notified when it is required, the time within which the state must start an escheat action is extended accordingly.
The primary burden of proving that there is no proper individual entitled to own the property in question vests in the state, and the general rules regarding the admissibility of evidence are applicable. Rules of presumption, such as the common-law presumption of death after a seven-year disappearance, can be used to support the case of the state. After the state has proved a legally sufficient case, any individual claiming a right to the property has an opportunity to go forward and argue against the evidence submitted by the state.
Some states offer money to informers who notify the state of property that might be subject to escheat. Informers might be required to provide evidence and pursue the case to a conclusion before they will be entitled to a fee. Other states provide compensation for an escheater, a person appointed by the court to manage the claim of the state for escheat. An escheater is entitled to be paid a reasonable amount even if he or she does not succeed in recovering the property for the state.
Property that is either bound over or paid into court for any reason is meant to be held for safekeeping and, therefore, is only in the possession of the court. Escheated property, conversely, is possessed and owned by the state, and the state takes title of such property subject to all other liens, mortgages, or encumbrances.
Federal law provides that the property of veterans who die without a will or heirs escheats to the United States in certain cases, but ordinarily escheated property goes to the state in which it is situated. Even land that was granted to its owner by the federal government becomes the property of the state if it is subject to escheat. A state law may give escheated property to a county or town, but this is rare.
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When property and/or an estate is transferred to the government because a person has died without a will or an heir to his or her estate.
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Transferred property can be claimed back by relatives if they have a worthwhile case.
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categories related to 'escheat'
- Decisions, Judgments, and Conditions - escheat: turning of decedent’s property over to state when no heirs are found
- Deeds, Leases, and Real Property Law - escheat: reversion of property to state when no heir or legal claimant can be found
Wikipedia on Answers.com:
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Escheat
| Property law |
|---|
| Part of the common law series |
| Acquisition |
| Estates in land |
| Conveyancing |
|
| Future use control |
| Nonpossessory interest |
| Related topics |
| Other common law areas |
Escheat (pronounced /ɨsˈtʃiːt/[1][2][3][4]) is a common law doctrine which transfers the property of a person who dies without heirs to the crown or state. It serves to ensure that property is not left in limbo without recognised ownership. It originally applied 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.
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Modern application
Most common-law jurisdictions have abolished the concept of feudal land tenure of property, and so the concept of escheat has lost something of its meaning. In England and Wales, where escheat still operates as a doctrine of land law, since the abolition of feudal tenure in 1660 there are no legally recognised [5] feudal overlords to take property on an escheat, so that in practice the recipient of an escheated property is the Crown, under its allodial title.
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, typically a bank, credit union or other financial institution, holds money or property which appears to be unclaimed, for instance due to a lack of activity on the account by way of deposits, withdrawals or any other transactions for a lengthy time in a cash account. In many jurisdictions, if the owner cannot be located, such property can be revocably escheated to the state.
In commerce, it is the process of re-assigning legal title in unclaimed or abandoned payroll checks, or stocks and shares whose owners cannot be traced, to a state authority (in the United States). A company is required to file unclaimed property reports with its state annually and, in some jurisdictions, to make a good-faith effort to find the owners of their dormant accounts. The escheating criteria are set by individual state regulations.
Etymology
The term "escheat" derives ultimately from the Latin ex-cadere, to "fall-out", via mediaeval French escheoir.[6] The sense is of a feudal estate in land falling-out of the possession by a family into the possession by the overlord.
Origins in feudalism
In feudal England, escheat referred to the situation where the tenant of a fee (or "fief") died without an heir or committed a felony. In the case of such decease of a tenant-in-chief, the fee reverted to the King's demesne permanently, when it became once again a mere tenantless plot of land, but could be re-created as a fee by enfeoffment to another of the king's followers. Where the deceased had been subinfeudated by a tenant-in-chief, the fee reverted temporarily to the crown for one year and one day by right of primer seisin after which it escheated to the over-lord who had granted it to the deceased by enfeoffment. From the time of Henry III, the monarchy took particular interest in escheat as a source of revenue.
Background
At the Norman Conquest of England all the land of England was claimed as the personal possession of William the Conqueror under allodial title. The monarch thus became the sole "owner" of all the land in the kingdom, a position which persists to the present day. He then granted it out to his favoured followers, who thereby became tenants-in-chief, under various contracts of feudal land tenure. Such tenures, even the highest one of "feudal barony", never conferred ownership of land but merely ownership of rights over it, that is to say ownership of an estate in land. Such persons are therefore correctly termed "land-holders" or "tenants" (from Latin teneo to hold), not owners. If held freely, that is to say by freehold, such holdings were heritable by the holder's legal heir. On the payment of a premium termed feudal relief to the treasury, such heir was entitled to demand re-enfeoffment by the king with the fee concerned. Where no legal heir existed, the logic of the situation was that the fief had ceased to exist as a legal entity, since being tenantless no one was living who had been enfeoffed with the land, and the land thus technically was owned by the crown without a tenant. Logically therefore it was in the occupation of the crown alone, that is to say in the royal demesne. This was the basic operation of an escheat, a failure of heirs. Where the fee had been subinfeudated by the tenant-in-chief to a mesne lord, and perhaps the process of subinfeudation had been continued by a lower series of mesne-lords, the operation of an escheat altered so that on failure of the heir of the holder of the fee the escheat would be to the demesne of the holder's immediate overlord.
Procedure
From the 12th century onward, the Crown appointed escheators to manage escheats and report to the Exchequer, with one escheator per county established by the middle of the 14th century. Upon the death of a tenant-in-chief, the escheator would be instructed by a writ of diem clausit extremum ("he has closed his last day", i.e. he is dead) issued by the king's chancery, to empanel a jury to hold an "inquisition post mortem" to ascertain who the legal heir was, if any, and what was the extent of the land held. Thus it would be revealed whether the king had any rights to the land. It was also important for the king to know who the heir was, and to assess his personal qualities, since he would thenceforth form a constituent part of the royal army, if he held under military tenure. If there was any doubt, the escheator would seize the land and refer the case to the king's court where it would be settled, ensuring that not one day's revenue would be lost. This would be a source of concern with land-holders when there were delays from the court.
English common law
Historical position
Thus, under English common law, there were two main ways an escheat could happen:
- A person's property escheated if he was convicted of a felony (but not treason, when the property was forfeited to the Crown). If the person was executed for the crime, his heirs were attainted, i.e. ineligible to inherit. In most common-law jurisdictions, this type of escheat has been abolished outright, for example 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 heir to receive their property under a will or under the laws of intestacy, then any property he owned at death would escheat. This rule has been replaced in most common-law jurisdictions by bona vacantia or a similar concept.
Current operation
Escheat can still occur in England and Wales, if a person is made bankrupt or a corporation is liquidated. Usually this means that all the property held by that person is 'vested in' (transferred to) the Official Receiver or Trustee in Bankruptcy. However, it is open to the Receiver or Trustee to refuse to accept that property by disclaiming it. It is relatively common for a trustee in bankruptcy to disclaim freehold property which may give rise to a liability, for example the common parts of a block of flats owned by the bankrupt would ordinarily pass to the trustee to be realised in order to pay his debts, but the property may give the landlord an obligation to spend money for the benefit of lesees of the flats. The bankruptcy of the original owner means that the freehold is no longer the bankrupt's legal property, and the disclaimer destroys the freehold estate, so that the land ceases to be owned by anyone and effectively escheats to become land held by the Crown in demesne. This situation affects a few hundred properties each year.
Although such escheated property is owned by the Crown, it is not part of the Crown Estate, unless the Crown (through the Crown Estate Commissioners) 'completes' the escheat, by taking steps to exert rights as owner.
However, usually, in the example given above, the tenants of the flats, or their mortgagees would exercise their rights given by the Insolvency Act 1986 to have the freehold property transferred to them. This is the main difference between escheat and bona vacantia, as in the latter, a grant takes place automatically, with no need to 'complete' the transaction.
One consequence of the Land Registration Act 1925 was that only estates in land (freehold or leasehold) could be registered. Land held directly by the Crown, known as property in the "royal demesne", is not held under any vestigial feudal tenure (the crown has no historical overlord other than, for brief periods, the papacy) and there is therefore no estate to register. This had the consequence that freeholds which escheated to the Crown ceased to be registrable. This created a slow drain of property out of registration, amounting to some hundreds of freehold titles in each year.
The problem was noted by the Law Commission in their report "Land Registration for the Twenty-First Century". The Land Registration Act 2002 was passed in response to that report. It provides that land held in demesne by the Crown may be registered.
See also
Sources
- S.T. Gibson, "The Escheatries, 1327-1341", English Historical Review, 36(1921).
- John Bean, The Decline of English Feudalism, 1215-1540, 1968.
External links
References
- ^ [howjsay.com "Escheat"]. howjsay.com. Retrieved 2 November 2011.
- ^ [dictionary.com "Escheat"]. dictionary.com. Retrieved 2 November 2011.
- ^ [merriam-webster.com "escheat"]. merriam-webster.com. Retrieved 2 November 2011.
- ^ Walker, John (1838). A Critical Pronouncing Dictionary and Expositor of the English Language. http://books.google.com/books?id=gO97flqb_-cC&lpg=PR1&dq=pronounce%20escheat%20english&pg=PR1#v=onepage&q&f=false.
- ^ There exist a few ancient English families, such as the Berkeley family of Berkeley Castle, who continue to hold lands originally granted as feudal baronies, still in possession of great tenanted estates, who might still be deemed feudal overlords to their tenants were it not for the operation of the 1660 act
- ^ Collins Dictionary of the English Language, London, 1986, p.520
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