The pleasant surprise of finding a crumpled-up bill in last season’s jacket pocket is possible for your business, too. How? Through a legal process called escheat.
Escheat is the process of transferring abandoned property to the state.
For example, banks possessing an individual’s property (read: money) have a duty to return the property to the owner after three years of inactivity. [California Code of Civil Procedure §1513(a)(a)(A)]
Intangible personal property escheats to the state when:
- the last known address of the apparent owner is in California;
- no address of the apparent owner appears on the records of the holder and:
- the last known address of the apparent owner is in California; or
- the holder resides in California and has not previously paid the property to the state of the last known address of the apparent owner; or
- the holder is part of California’s government and has not previously paid the property to the state of the last known address of the apparent owner;
- the last known address of the apparent owner is in a state that does not provide by law for the escheat of such property and the holder is:
- domiciled in this state; or
- a government or governmental subdivision or agency of this state; or
- the last known address of the apparent owner is in a foreign nation and the holder is:
- domiciled in this state; or
- a government or governmental subdivision or agency of this state. [CCP §1510]
Holders of unclaimed property have a duty to notify owners of unclaimed property valued over $50 before reporting it to the state. [CCP §1520(b)]
For more information on notification requirements, holders may see guidance from the State Controller’s Office, here.
To find out if the state has money that belongs to you, visit the lookup tool at the California State Controller’s Office. However, the State Controller warns consumers not to respond to mailings prompting recipients to call a toll-free number, contact an attorney or pay any upfront fees regarding unclaimed property. These types of notices are fraudulent.
To ensure you’re not being defrauded, always go directly through the State Controller’s office. Here, anyone can access the public interface to determine whether the state holds any unclaimed property that has been escheated to the state after a period of inactivity.
Just as one regularly checks their credit score, brokers and other small business owners ought to make it a habit to periodically determine whether they have any unclaimed property with the state so they may get it back.
See additional guidance from the State Controller, here.
