The state of California, like most states, has laws in place that mean that the state escheats, or takes possession of, abandoned property. This situation usually occurs when someone without a will dies and no claims are made on the estate. California laws specify the point at which unclaimed funds become "abandoned" and how property owners can reclaim funds that the state escheats.
Unclaimed Property Law
Video of the Day
Banks, insurance companies and other types of businesses that act as custodians or hold property on behalf of Californian citizens have to file an annual property report to the state controller's office that lists abandoned property. If a property owner has no contact with the business holding the property for a period of three years, then under California law, the property has been abandoned. The state takes possession of the property to prevent the business holding it from selling it and using the proceeds for its own purposes.
Video of the Day
Property Types
Types of property that the state commonly escheats include the proceeds of deposit accounts and certificates of deposits held by banks. Uncollected settlements from insurance payouts, stock certificates, mutual funds, bonds, dividend payments and royalty payments are also among the assets that often end up being abandoned. Banks must escheat the contents of safety deposit boxes as well as funds used to buy cashier's checks and money orders that are not negotiated within three years of purchase. Banks can only escheat funds used to buy a traveler's check if more than 15 years have passed since the purchaser bought the check.
Escheat Process
Businesses in California can only escheat property to the state if the owner lives in the state or if the owner's last known address was in the state. Even if an account owner neither uses an account nor contacts a bank about an account for three years, the bank can only escheat the account proceeds to the state if the account owner did not open any other accounts at the same institution during the same three year period. According the California State Controller's Office, as of 2011, the state holds unclaimed property with a total value of $5.7 billion.
Reclaiming Property
If a property owner fails to contact the property holder for two and a half years, the property holder must notify the property owner by mail of the California unclaimed property laws. If a property owner fails to respond and the property holder escheats the property, the property owner can file a Claim Affirmation Form to the unclaimed property fund. If you make a claim on property totaling more than $1,000 in value, you must get a notary to sign your claim form. Typically, claims are processed within 180 days.