Robert A. Marsico
Partner
201-896-7165 rmarsico@sh-law.comFirm Insights
Finders Keepers: Could Your Financial Account Escheat to the State?
Author: Robert A. Marsico
Date: August 11, 2014
Key Contacts
Back
If you don’t regularly monitor your finances, you could lose out. Allowing accounts to lay fallow for too long may result in your assets escheating to the state.
The term “escheat” refers to the title transfer of financial assets (such as savings account deposits, uncashed checks, and securities in retirement accounts) to a state authority because the rightful owner failed to make claim, engage in a transaction or provide instruction for a specific time period. In New Jersey, the escheatment period is generally three years. Many types of inaction can result in funds being considered “abandoned,” such as failing to cash a check, update your address, or complete a transaction within a specified period of time.
Once your financial institution deems the account abandoned, it must make a diligent effort to contact you. However, if you do not respond, perhaps because your address has changed or you mistake the correspondence for junk mail, the firm will begin the process of transferring your property to the state.
Each state has its own escheat laws regarding abandoned property, but the process is revocable in most cases. To get your money back, most states will require you to complete a claim form and provide proof of identity. If your assets were liquidated, you will likely only receive the proceeds of the sale, which may not reflect the current market value.
While the intent of escheatment is to ensure that financial assets are marshaled for safekeeping, the process often creates a windfall for cash-strapped states. As a result, a number of states have modified their escheatment laws to shorten the timeframe required for an account to be considered abandoned and impose strict monitoring and reporting obligations on financial institutions.
To avoid letting your account escheat to the state account holders must be proactive — make sure to update your address, cash all checks from financial institutions, and carefully monitor your mail. If a loved one becomes incapacitated or passes away, it is important to take inventory of all their accounts and determine what steps are needed to transfer or liquidate the assets.
If you have any questions about this post or would like to discuss the legal issues involved, please contact me, Bob Marisco, or the Scarinci Hollenbeck attorney with whom you work.
- Practices: Corporate Transactions & Business
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Top 5 Causes Leading to Construction Defect Litigation
The five most common causes of construction defect litigation are design defects, substandard materials, workmanship defects, code violations, and subsurface defects. Because these flaws can compromise a building’s integrity, functionality, or safety, they frequently lead to disputes involving multiple parties and high financial stakes. Key takeaways: What is Construction Defect Litigation? Construction litigation is complex, […]
Author: Paul Grossman
How to Protect Your New Jersey Business When Going through a Divorce
The most effective ways to protect your business in a divorce are put in place before one begins: a prenuptial or postnuptial agreement, clean separation of business and personal finances, and divorce contingencies built into your operating or buy-sell agreements. If divorce is already underway, the priorities shift to establishing how the business is classified […]
Author: Jay McDaniel
10 Common Issues in Franchise Disputes
The most common franchise disputes involve breach of contract, franchise termination and non-renewal, intellectual property rights, territorial encroachment, royalty and fee payments, franchisor support obligations, and violations of state franchise laws such as the New Jersey Franchise Practices Act. Franchisors and franchisees can often resolve these conflicts by providing written notice detailing the dispute and […]
Author: Paul Grossman
Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together
New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]
Author: Sean M. Pena
Eviction Is Not Always the End: Understanding Post-Possession Rent Claims in New Jersey and New York
No. An eviction does not automatically end a tenant’s obligation to pay rent. Post-eviction rent claims are common because recovering possession resolves who has the right to occupy the premises, but it does not extinguish the tenant’s contractual obligations under the lease. Whether unpaid or future rent remains owed depends on three factors: the lease’s […]
Author: Donald M. Pepe
Company Dissolved? Legal and Financial Consequences to Expect
A company is dissolved; legally, it ceases to exist. Accordingly, dissolution results in significant legal and financial consequences. It is a process that must be properly managed to avoid continuing liability. The Corporate Dissolution Process Corporate dissolution is the legal process of formally closing a corporation, paying its debts and distributing the remaining assets. Most […]
Author: Jay McDaniel
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.