In the 1990s Walter Schramm, a Delaware resident, invested in Amazon stock. As the stock’s value grew, Schramm left his Amazon investment alone only to learn in 2015 that it had been escheated by the state of Delaware in 2008. As NPR’s Audrey Quinn explained, escheatment occurs “when a state government takes possession of unclaimed property and holds it until the rightful owner comes forward.” The property could be an uncashed paycheck, a forgotten bank account, or an inactive stock account, such as Schramm’s.
When the state of Delaware closed Schramm’s investment, it was worth $8,000; by 2015 it would have been worth “about 100 grand,” Quinn reported.
All across the US, Quinn stated, “states are getting more aggressive in how they identify property as unclaimed.” In some states the permitted period of inactivity is just three years; in other states there are no requirements that investors be notified when their property is escheated.
Officially, escheatments are intended to ensure that property is not left in “limbo” without recognized ownership after a person dies without heirs, but increasingly states are using the common law doctrine to bolster their own flagging budgets. Escheatments are currently the fifth largest source of funding for the state of California, Quinn reported, and the third largest source for Delaware, where they accounts for “about 12% of the state budget.”
Source: Audrey Quinn, “When Your Abandoned Estate Is Possessed By A State, That’s Escheat,” February 13, 2020, NPR, https://www.npr.org/2020/02/13/805760508/when-your-abandoned-estate-is-possessed-by-a-state-thats-escheat.
Student Researcher: Jonathan Curtner (Indian River State College)
Faculty Evaluator: Elliot D Cohen (Indian River State College)
The post The Questionable Government Practice of “Escheatment” appeared first on Project Censored.
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Vins | Radio Free (2021-04-21T21:32:41+00:00) The Questionable Government Practice of “Escheatment”. Retrieved from https://www.radiofree.org/2021/04/21/the-questionable-government-practice-of-escheatment/
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