Escheatment

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The US means of dealing with abandoned client assets and bank accounts.

All US states require financial institutions to report when personal property has been abandoned or unclaimed after a stipulated period — often five years.

Before treating it as abandoned or unclaimed, the firm must first make a diligent effort to try to locate the account owner. If it can’t and the account has remained inactive for the required period the firm must report the account to the state where the account is held. The state then claims the account through a process called escheatment, whereby the state becomes the owner of the account.

See also

• SEC bulletin on Escheatment
• Dormant Bank and Building Society Accounts Act 2008 - the UK equivalent