Americans tend to bristle when any level of the government meddles in their private lives, especially with their money. Look no further than the famous “death and taxes” quote for a sense of how Americans feel about bureaucratic creep and government’s sticky fingers.
You may take pains to minimize government meddling in your personal affairs during your lifetime, but if you do not have an estate plan, you may die intestate, and state law will become heavily involved in what happens to your money and property—and may even end up claiming it for itself through a process called escheat.
To avoid these outcomes, you need an up-to-date estate plan that lets you exercise maximum control and autonomy, both in life and in death.
Escheatment and the State’s Taking Power
Escheat is a term that dates to feudal times when, if a tenant died with no blood relatives, their estate reverted to the lord of the manor as the ultimate landowner. Middle English referred to this practice as eschete, which evolved into our modern state escheatment laws.
Today, every US state has laws requiring that unclaimed or abandoned property be turned over to the state after a designated period of inactivity—called the dormancy period—which typically ranges from one year to five years, depending on the state.
Unclaimed property can be tangible or intangible and includes assets such as 401(k)s, inherited individual retirement accounts (IRAs), taxable investments, bank savings, and other financial assets in accounts that have been inactive for a while and are legally deemed to be dormant.[1]
Unclaimed property also includes life insurance proceeds and assets such as gift certificates, uncashed checks, and personal property held in safe deposit boxes.[2]
States hold billions of dollars in unclaimed property taken by escheatment.[3] Unclaimed property is a major source of revenue for some states.[4] It is the fifth largest funding source for California, for example, and the third largest source for Delaware.[5]
As of 2025, California alone holds about $14 billion in unclaimed assets.[6] It and other states are taking more measures to enforce escheat laws to claim unclaimed property, often shortening dormancy periods and reducing notification requirements to capture more assets, according to NPR.[7]
Escheat and Intestacy
A 2025 Caring.com survey found that just 24 percent of Americans have a will.[8] Put another way, three out of four Americans are likely to die intestate because of their lack of preparation.
Also, many Americans who have estate plans have not updated them in years, which puts assets at risk of being unidentified and unclaimed.[9]
Both scenarios can ultimately lead to the state claiming your money and property after your death through escheatment proceedings in probate court. If you pass away and do not have a legal document such as a will or a trust that clearly identifies who should receive your money and property, you are said to have died intestate. If you die intestate, state laws—called intestacy statutes—will determine who inherits from you.These laws generally start with next of kin, but if there are no family members to receive your money and property, your money and property could end up going to the state instead of supporting your nonfamily loved ones or a favorite charity.
This practice, a throwback to feudal times, essentially makes the state the default heir—the lord of the manor—and you a mere tenant.
Another possibility is partial intestacy, which occurs if you die with a valid will but the will does not fully address everything you own. Intestacy rules will apply to those remaining accounts and property.
If You Want Something Different, Update Your Plan
It is not only dying intestate that can trigger state escheat and intestacy laws. You could have an out-of-date or incomplete plan that fails to include a comprehensive inventory of everything you own. Because loved ones might not have a full picture of what you own or where to find it, those accounts and property could be unclaimed for several years and ultimately end up in state custody. In other words, a good estate plan leaves a trail of breadcrumbs for your executor or trustee to follow so they can identify, gather, and distribute everything you own, leaving nothing behind for the state.
A comprehensive estate plan also lets you take control and decide exactly who inherits what. Estate planning allows for nuances that state laws do not and can make all the difference between crafting an intentional legacy and being subject to the state’s default legacy for you.
Some scenarios that an estate plan can address—and state law cannot—include the following:
- Under most intestacy laws, stepchildren do not automatically inherit anything unless you have legally adopted them. If you raised a stepchild as your own and want them to inherit, you will need a will or trust to make that happen in most states.
- Unmarried partner. In most states, unmarried partners have no legal right to each other’s money and property under intestacy laws, regardless of how long they have been together. This can result in a situation where a long-term partner is left with nothing, while estranged relatives or the state claim the money and property left behind.
- Close friend. Intestacy laws do not recognize friendships. To leave something to these very important people in your life, you must spell it out in your estate plan.
- You may prefer that your money go to a cause you are passionate about, such as animal welfare, education, or medical research. Charities will not see a dime unless you explicitly designate them as beneficiaries.
- Specific bequests. Want to leave your antique watch to your nephew or your art collection to your niece? Intestacy laws distribute money and property generally and do not carve out gifts of specific items.
- Control over guardianship. A will allows you to nominate a guardian to care for your minor children. Lacking this crucial designation, the court will decide without input from you, and the person they select may not be your preferred choice.
Take Control with an Estate Plan
Legal jargon such as escheat and intestate may put people off from the estate planning process entirely. Even the term estate can suggest an exclusive service only for the wealthy.
In reality, estate planning is for anyone who owns anything of value—monetary, sentimental, or otherwise—and who cares about what happens to it. Delaying estate planning can cause conflicts in your family.
If you want to exercise maximum control over your hard-earned money and property and ensure that the state does not end up claiming it, you should have at least a basic will. However, you can exercise even greater control and likely avoid probate court altogether with a trust-based estate plan.
Do not settle for the state’s default rules and leave things to chance—or the government. Take charge of your legacy today: call us so we can craft a plan unique to you or update your existing plan.
[1] What Is Unclaimed Property, Nat’l Ass’n of Unclaimed Prop. Adm’rs, https://unclaimed.org/what-is-unclaimed-property (last visited Apr. 17, 2025).
[2] Id.
[3] Report Shows Unclaimed Property Administrators Returned over $2.8B to Americans During FY 2020, Nat’l Ass’n of Unclaimed Prop. Adm’rs, https://unclaimed.org/fy20-annual-report (last visited Apr. 17, 2025).
[4] Unclaimed Property FAQ, Unclaimed Prop. Pros. Org., https://www.uppo.org/page/UnclaimedPropFAQ (last visited Apr. 17, 2025).
[5] Escheat Show, NPR (Jan. 24, 2020), https://www.npr.org/transcripts/799345159.
[6] Kendrick Marshall, California Is Holding $14 Billion in Unclaimed Property. Here’s How to Get Your Share, Sacramento Bee (Mar. 28, 2025), https://www.sacbee.com/news/california/article301817649.html.
[7] Audrey Quinn, When Your Abandoned Estate Is Possessed by A State, That’s Escheat, NPR (Feb. 13, 2020), https://www.npr.org/2020/02/13/805760508/when-your-abandoned-estate-is-possessed-by-a-state-thats-escheat.
[8] Victoria Lurie, 2025 Wills and Estate Planning Study, Caring (Feb. 18, 2025), https://www.caring.com/caregivers/estate-planning/wills-survey.
[9] Id.