Escheat: When Property/Estate without Heirs goes to the State
What happens when someone passes away and there is nobody alive who can legally inherit? Does the property just sit without an owner for eternity? Does it go to auction? Under traditional Common Law, the property escheats — that is, it reverts to ownership by the State/Government. This principle is codified in Missouri in statutory Chapter 470.
Specifically, RSMo 470.010 states when property escheats:
If any person die intestate, seized of any real or personal property, leaving no heirs or representatives currently capable of inheriting the same; or, if upon final settlement of an executor or administrator, there is a balance in his or her hands belonging to some legatee or distributee who is a nonresident or who is not in a situation to receive the same and give a discharge thereof or who does not appear by himself or herself or agent to claim and receive the same; or, if upon final settlement of an assignee for the benefit of creditors, there shall remain in his or her possession any unclaimed dividends; or, if upon final report of any sheriff to the court, it is shown that the interests in the proceeds of the sale of land in partition of certain parties, who are absent from the state, who are nonresidents, who are not known or named in the proceedings, or who, from any cause, are not in a situation to receive the same, are in his or her hands unpaid and unclaimed; or, if, upon final settlement of the receiver of any company or corporation which has been doing business in this state, there is money in his or her hands unpaid and unclaimed, in each and every such instance such real and personal estate shall transfer to the state, subject to and in accordance with the provisions of sections 470.010 to 470.220 and sections 447.500 to 447.595.
Escheat, therefore, primarily occurs in Missouri in the following circumstances: (1) when there are no heirs, (2) when there are out of state heirs who do not retrieve the property, (3) when there are unclaimed dividends as to property, (4) or when there are known heirs who cannot be specifically identified or located. These circumstances are of course rare because people take careful steps to avoid probate. And for those assets that do end up flowing through probate, it is usually not difficult to find a family member willing to inherit. Once an estate is determined to be subject to escheat, the estate is generally paid to the State Treasurer consistent with RSMo 470.020.
For questions relating to trusts, wills, probate, probate avoidance & intestacy, contact us with questions.