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Conditions for Escheat

Escheat is commonly applied to the transfer of title to a person’s property to the state when the person dies intestate leaving no other person capable of taking the property as heir.  If the intestate leave no lineal descendants or kindred, such real property will be escheat to the state[i].

An escheat is not favored in law.  Any doubt as to whether property is subject to escheat is resolved against the state[ii].  It is to be noted that the primary inquiry and burden in escheat cases rest upon the state[iii].  There are certain conditions/situations under which a state is entitled to take a property by escheat.

A state is entitled to take the property of the persons who die intestate under the doctrine of intestate.  If the heirs are legally incompetent, then the property will be treated in such a way as if there are no heirs and therefore the property escheats.

It is a settled rule of the common law that incapacity of the heirs first entitled to succeed to property will not effect an escheat.  Such property will pass to the persons next entitled to take as though the first heirs had not existed.

It is to be noted that a valid disposition by will destroys the right to an escheat.  However, if the will is defective and there are no legal heirs eligible to take the property through intestate succession, then the property will escheat[iv].

Another situation that can lead to escheat is when the only heir murders the decedent.  Under such circumstances, the state will be entitled to take the property by escheat.  However, if there is more than one heir, then the property naturally passes to the other heirs[v].

If a citizen of a state leaves his property to alien heirs, some statutes expressly provide for the escheat of such properties[vi].  As an escheat is not favored by the law[vii], the statutes concerning alien issues are construed in a narrow manner.

It is to be noted that the power to escheat property held by a corporation for more than five years will be denied if it is proved with reasonable certainty that the property is held in good faith for future use in the legitimate conduct of the corporation’s business[viii].

[i] In re Norton’s Estate, 177 Ore. 342 (Or. 1945).

[ii] Walter v. Walter (In re Estate of Walter), 97 P.3d 188 (Colo. Ct. App. 2003).

[iii] In re Estate of Smith, 179 Wash. 287 (Wash. 1934).

[iv] Morgan County Nat’l Bank v. Nelson, 244 Ala. 374 (Ala. 1943).

[v] Box v. Lanier, 112 Tenn. 393 (Tenn. 1904).

[vi] Semrad v. Semrad, 170 Neb. 911 (Neb. 1960)

[vii] Walter v. Walter (In re Estate of Walter), 97 P.3d 188 (Colo. Ct. App. 2003).

[viii] Great-West Life Assurance Co. v. Courier-Journal Job Printing Co., 288 S.W.2d 639 (Ky. 1956)

Inside Conditions for Escheat