You’ve spent your whole lifetime working hard and building up a diverse portfolio of assets.…
Escheat, pronounced \ is-ˈchēt , ish-ˈchēt\, refers to a government’s right to take ownership of estate assets or unclaimed property. It is what happens to your life’s work if you die without legal heirs and do not designate any beneficiaries in your Will. It is also the last thing most folks want to happen to the assets they have labored to acquire and so it is important to know how escheatment works and how to avoid it through secure estate planning.
An Overview of the Law
Where an individual’s estate is concerned, escheat rights must be granted to a state by a probate court. For this to happen, the individual must die intestate (without a Will) and without any ascertainable heirs. The burden of proof in escheat cases rests upon the state, which must demonstrate that after diligent search, no such heirs could be identified. In simple terms, this means that the state could find no surviving family members of the deceased.
States often aggressively enforce their rights to escheat as doing so provides a source of revenue both in terms of ownership and insofar as future sale means future property taxes. This said, the law does not favor escheat and when any doubt exists, the case is settled against the state. What’s more, assets that have been escheated can later be recovered if a lawful heir or owner turns up.
The above notwithstanding, it is important to protect your assets against escheatment. While a state may have to do the legwork to gain possession of your assets if you die intestate and with heirs, rest assured that this will happen. The best preventative measure that you can put in place is an estate plan.
How an Estate Plan Protects Against Escheatment
An estate plan protects your assets from ending up in the state’s pockets by providing instruction on where you wish them to go. Many individuals who know they will have no surviving heirs think that this means they do not need an estate plan. This is mistaken thinking, as having no one to whom you wish to pass your assets does mean you have no one to whom you do not wish them to pass. After all, as your life’s work, your assets deserve to end up in a place of your choosing, not wherever the law decides.
While it may be that you have no surviving family members, you may have close friends you wish to designate as beneficiaries in your Will. Failing this, you may also consider designating a charitable organization or exploring philanthropic options.
To learn more about how an estate plan provides you control over your assets and saves you from unforeseen and undesirable outcomes, do not hesitate to reach out to the Law Firm of Christopher W. Dumm either by calling 417-623-2062 or using the contact form on our website.
Contact the Estate Planning Attorneys at the Law Firm of Christopher W. Dumm