Imagine a property owner in California passes away without a will, and no heirs come forward to claim the property. Over time, the property remains unclaimed, with unpaid taxes accumulating. Eventually, the California state government takes legal ownership through a process called escheat. This process ensures that abandoned or unclaimed property in California doesn’t remain in legal limbo indefinitely.

What is California Unclaimed Property & Why Does the State Claim It?

California unclaimed property refers to assets that have been abandoned or left inactive by their owners for a specific period. The state’s escheat laws govern how these assets are handled. The primary purpose of California’s unclaimed property program is to:

• Protect property owners by safeguarding their assets until they can be returned.
• Prevent property from remaining ownerless indefinitely.
• Ensure public resources aren’t burdened by neglected assets.
• Provide a centralized system for Californians to search for and reclaim their property.

In California, unclaimed property laws protect both owners and the public by establishing clear rules for handling abandoned assets and providing a method for rightful owners to reclaim them.

How Does The California Escheat Process Work?

In California, escheat follows a structured legal process to handle unclaimed property.

1. The first step is to determine abandonment. If a property remains unclaimed for a specific period, and no heirs or legal representatives step forward, the state begins the escheat process.  (Sometimes this is where our firm comes into play.  Many adverse possession cases arise at this critical stage where a non-heir steps forward and begins to claim the property for themselves).
2. Next, the potential owners must be notified. The state makes reasonable efforts to locate rightful heirs, including public notices and outreach campaigns. This step ensures that any interested parties have the opportunity to claim the property before it is transferred.
3. If no valid claim is made within the designated timeframe, the property is officially transferred to state ownership. The government may then choose to hold, manage, or sell the property at public auction, depending on the circumstances.

Importantly, California law allows for reclamation. If a rightful owner or heir emerges within a specific statutory period, they can petition the state for the return of the escheated property by providing sufficient proof of ownership.

Types of California Unclaimed Property the State Can Claim

California’s unclaimed property program applies to various financial assets, including:

• Real Estate: Properties with unclear ownership or unpaid taxes.
• Bank Accounts & Safe Deposit Boxes: If an account remains inactive for more than three years, funds may be transferred to the state.
• Unclaimed Wages & Payroll Checks: If not claimed within one year, wages are subject to escheat.
• Stocks & Dividends: Unclaimed stocks or dividends may be liquidated and transferred to the state.
• Life Insurance Policies: If beneficiaries fail to claim the policy benefits within a certain period, the state may take control of the funds.
• Uncashed Money Orders & Travelers’ Checks: After a designated dormancy period, these funds are subject to escheat.

How to Reclaim Your California Unclaimed Property

If your property has been escheated to California, the state provides a structured reclamation process:

1. File a claim: Submit a formal request through the California State Controller’s Office unclaimed property portal.
2. Provide ownership proof: Submit documentation like deeds, wills, probate documents, or other legal records establishing your rights.
3. State review: California officials verify your documents and determine legitimacy.
4. Property return: If approved, the state reinstates your ownership or provides equivalent monetary compensation.

How Californians Can Prevent Property from Becoming Unclaimed

To prevent your California property from being escheated to the state:

• Creating a Will or Estate Plan: Clearly designate beneficiaries to ensure smooth property transfer upon death.
• Keeping Contact Information Updated: Ensure banks, employers, and financial institutions have up-to-date contact information.
• Regularly Reviewing Financial & Property Records: Periodically check for unclaimed property using California’s unclaimed property database.
• Paying Property Taxes on Time: Unpaid taxes can lead to property being declared abandoned.
• Notifying Heirs of Ownership Interests: Inform family members or trusted individuals about property and financial assets.

Searching for California Unclaimed Property

The California State Controller’s Office maintains a comprehensive database of unclaimed property. Visit their official website to search for assets in your name or the name of a deceased relative. The search is free and might reveal forgotten funds or property you’re entitled to claim.

Take Action on Your California Unclaimed Property

California’s unclaimed property laws serve an essential function in maintaining order over abandoned assets. While the state provides opportunities for rightful owners to reclaim their property, prevention through proper planning is always best.

At Schorr Law, our real estate attorneys most frequently come across unclaimed property in the context of adverse possession cases where our clients have been paying the property taxes, maintaining the unclaimed real property for years and are in a position to now change title to their name.  We do this all the time – and it works! (assuming the client meets all the elements for adverse possession).

If you or a loved one are facing a potential escheat situation or need help reclaiming California unclaimed property, contact the experienced Los Angeles real estate attorneys at Schorr Law. Call us at (310) 954-1877 or visit www.schorr-law.com/contact-us to schedule a consultation.