What Is an Escheated Check and How Do You Claim It?

An escheated check refers to a payment that has remained uncashed or unclaimed for a specific period, eventually becoming the property of a state government. This process, known as escheatment, transfers various types of unclaimed property, including checks, to state custody when the rightful owner cannot be located. Escheat laws prevent property from being permanently lost or abandoned, ensuring these assets are held in trust for their owners and that owners retain the right to reclaim their property.

Understanding Why Checks Escheat

Checks escheat due to a dormancy period, a specific length of time with no activity or contact from the owner. These periods vary by property type, but for checks, they commonly range from one to five years. Uncashed payroll checks often have shorter dormancy periods, sometimes as brief as one year.

Checks can become escheated if a payee forgets a payment, an incorrect address prevents delivery, or a check is misplaced. Common examples include uncashed payroll checks, customer refunds, vendor payments, and unused gift card balances. Before a check escheats, the issuing entity, known as the “holder,” must attempt to contact the owner. This “due diligence” typically involves sending written notices to the owner’s last known address, often 60 to 180 days before the property is reported to the state.

The State Escheatment Process

Once a check meets the criteria for escheatment, the holder is required to report it to the state. This involves submitting an annual report detailing the unclaimed property, including the owner’s last known address and the property’s value. These reports are typically due once a year, though specific deadlines can vary by state and property type.

Following the reporting, the funds are transferred from the holder to the state’s unclaimed property division. The state acts as a custodian of these funds, holding the property in trust for the rightful owner indefinitely. This custodial role ensures that owners can always claim their property. States maintain public databases where individuals can search for unclaimed property.

How to Claim Escheated Funds

Locating escheated funds typically begins with searching state unclaimed property websites. Most states offer free, user-friendly online search tools. The National Association of Unclaimed Property Administrators (NAUPA) website provides links to individual state databases and also sponsors MissingMoney.com, a free website that allows searching across multiple participating states simultaneously. When conducting a search, providing information such as your full name, any previous addresses, and former business names can help narrow down results.

Once a potential match is found, the next step involves initiating a claim directly with the relevant state’s unclaimed property division. The claim process requires verifying your identity and proving ownership of the funds. Common documents requested for identity verification include a government-issued photo identification, such as a driver’s license or passport, and proof of your Social Security number.

To establish proof of ownership, you may need to provide documents that link you to the property or the address associated with it. This could include old bank statements, utility bills, pay stubs, cancelled checks, or any correspondence from the original holder. For claims involving deceased individuals, documentation like a death certificate, will, or probate court orders may be required to prove heirship. After submitting all necessary documentation, the processing time for claims can vary, generally ranging from 30 to 180 days. Payments are typically issued via paper check once the claim is approved.