Escheat

Key Takeaways

• Escheat sends a deceased person's property to the state when no one is entitled to inherit it.
• Two conditions must line up: no valid will directing the property, and no surviving person entitled to take it under state law.
• In Washington, title to escheat property vests in the state at the death of the owner, not at the end of the court process (RCW 11.08.150).
• In Washington, the department of revenue supervises escheat property and must protect and conserve it for the benefit of the permanent common school fund (RCW 11.08.160).

What It Means

Escheat is the rule that keeps land from ending up with no owner at all. When a person dies and nobody is entitled to the property, either because there is no valid Will naming a recipient or because no relative close enough to inherit survived, the property passes to the state. It is one of the government's powers over privately held land, and it is the only one that operates purely at death.

Two conditions have to line up before escheat happens. There must be no valid will disposing of the asset, and there must be no living person entitled to take it under the state's Intestate succession statute. One surviving cousin, or a will leaving everything to a neighbor, defeats escheat completely. That is why escheat is rare in practice even though it turns up on every licensing exam.

Escheat is not a taking and it is not a penalty. The state is not buying the property and it is not punishing the owner for anything. It is filling a vacancy in the chain of title so the parcel stays taxable, insurable, and capable of being sold. Once the property is in state hands it can be leased or sold like any other asset, and a late arriving heir can still claim it for a set number of years.

How It Works in Washington

In Washington, escheat lives in chapter 11.08 RCW. RCW 11.08.140 provides that whenever a person dies, resident of this state or not, leaving property subject to the jurisdiction of this state and without being survived by any person entitled to the same under the laws of this state, that property is designated escheat property. The Descent And Distribution table of RCW 11.04.015 has to be exhausted first, all the way through the issue of the decedent's grandparents.

Timing matters more than students expect. RCW 11.08.150 provides that title to escheat property vests in the state at the death of the owner, so the state's interest is not created by the Probate decree, it is only confirmed by it. RCW 11.08.160 gives the department of revenue supervision of and jurisdiction over escheat property, along with a duty to protect and conserve it for the benefit of the permanent common school fund of the state until the property or its proceeds are forwarded on.

The door does not close on the day of death either. Under RCW 11.08.240, a claimant to escheated funds or real property has seven years from the date of issuance of letters testamentary or of administration to file a claim with the court having original jurisdiction of the estate, serving a copy on the department of revenue together with twenty days notice of the hearing.

Example

Harold dies in Yakima at 91. He never married, had no children, and left no will. His parents and his only sibling died before him, and that sibling left no children. His house appraises at $340,000 and his bank account holds $28,500, so the estate is worth $368,500.

No known relative on the RCW 11.04.015 list survives him, so the property is designated escheat property under RCW 11.08.140, and under RCW 11.08.150 title vested in the state the day Harold died. The department of revenue takes over under RCW 11.08.160 and leases the house while the estate is administered. Three years later a first cousin appears with documentation. A first cousin is issue of Harold's grandparents, which puts her on the RCW 11.04.015 list, and she files inside the seven year window of RCW 11.08.240. The court establishes her claim and the $368,500 estate goes to her instead of to the state.

Common Mistakes and Exam Traps

• Escheat requires no will and no heirs together. Either a valid will or one qualifying surviving relative keeps the property out of state hands.
• Escheat is not eminent domain. Eminent domain reaches land while the owner is alive, while escheat reaches only the estate of someone who died leaving nobody entitled to inherit.
• In Washington, title vests in the state at the owner's death under RCW 11.08.150, so answers describing a waiting period before the state takes title are wrong.
• Escheat is not final on day one. RCW 11.08.240 gives a claimant seven years from the issuance of letters to come forward and prove the relationship.