Escheat

Escheat /ɪsˈtʃiːt/[1][2] (from the Latin excidere for "fall away") is a common law doctrine that transfers the real property of a person who has died without heirs to the crown or state.

In feudal England, escheat referred to the situation where the tenant of a fee (or "fief") died without an heir or committed a felony.

On the payment of a premium termed feudal relief to the treasury, such heir was entitled to demand re-enfeoffment by the king with the fee concerned.

Where no legal heir existed, the logic of the situation was that the fief had ceased to exist as a legal entity, since being tenantless no one was living who had been enfeoffed with the land, and the land was thus technically owned by either the crown or the immediate overlord (where the fee had been subinfeudated by the tenant-in-chief to a mesne lord, and perhaps the process of subinfeudation had been continued by a lower series of mesne-lords) as ultimus haeres.

Remedies in the courts against this sort of thing, even in Bracton's day, were available, but were considered laborious and were frequently ineffectual in compelling the desired performance.

The most common mechanism was distraint, also known as distress (districtio), whereby the lord would seize chattels or goods belonging to the tenant, to hold until performance was achieved.

Upon the death of a tenant-in-chief, the escheator would be instructed by a writ of diem clausit extremum ("he has closed his last day", i.e. he is dead) issued by the king's chancery, to empanel a jury to hold an "inquisition post mortem" to ascertain who the legal heir was, if any, and what was the extent of the land held.

It was also important for the king to know who the heir was, and to assess his personal qualities, since he would thenceforth form a constituent part of the royal army, if he held under military tenure.

If there was any doubt, the escheator would seize the land and refer the case to the king's court where it would be settled, ensuring that not one day's revenue would be lost.

In England and Wales, the possibility of escheat of a deceased person's property to the feudal overlord was abolished by the Administration of Estates Act 1925; however, the concept of bona vacantia means that the Crown (or Duchy of Cornwall or Duchy of Lancaster) can still receive such property if no-one else can be found who is eligible to inherit it.

Similarly, under Napoleonic law, if someone dies intestate without natural heirs then, after all creditors are paid, any remaining real and personal goods are inherited by the State.

In some jurisdictions, escheat can also occur when an entity, typically a bank, credit union or other financial institution, holds money or property which appears to be unclaimed, for instance due to a lack of activity on the account by way of deposits, withdrawals or any other transactions for a lengthy time in a cash account.

A company is required to file unclaimed property reports with its state annually and, in some jurisdictions, to make a good-faith effort to find the owners of their dormant accounts.

It is relatively common for a trustee in bankruptcy to disclaim freehold property which may give rise to a liability, for example the common parts of a block of flats owned by the bankrupt would ordinarily pass to the trustee to be realised in order to pay his debts, but the property may give the landlord an obligation to spend money for the benefit of lessees of the flats.