Escheat is the forfeit of all property to the state when a person dies without heirs, descendants, or named beneficiaries.
Escheat of property occurs when it appears from a petition or application for probate, or otherwise in a proceeding in a court, that a decedent left surviving no spouse or kindred. A court then will give notice of such fact and notice of all subsequent proceedings to the Attorney General. If the deceased owner had legitimate creditors, then the creditors would get paid before property escheated to the state. Eventually, if no devisees or heirs are found, the residue escheats to the state, so is transmitted to the Attorney General for safe keeping.
In Minnesota, cash is deposited into the State’s General Fund. All personal property is sold and the proceeds are added to the General Fund. Real estate is either sold, and the proceeds deposited in the General Fund, or is managed by the applicable State agency and becomes a part of the assets of the State.
If property has escheated to the state, there is still opportunity for heirs or devisees to reclaim the property by petitioning the Probate Court to admit a Will or ask the court to make a determination of heirship and enter a order assigning the escheated property to the persons entitled to it.
According to the Minnesota Treasury, escheat happens very rarely. There has been one instance of property escheating to the State since the late 1980’s.
