What Happens with Unclaimed Inheritance in a Will?

Whether it was overlooked, never found, or passed on by multiple different heirs, an unclaimed inheritance can eventually be escheated to the state government.

To understand how an inheritance can be left unclaimed – as well as how to claim it before it’s too late – we need to dive into how inheritance and beneficiary succession works.

How Is an Inheritance Left Unclaimed?

How can someone leave an inheritance unclaimed to begin with? Well, you might be surprised how often it happens.

Bank accounts, investment vehicles, financial assets, and other forgotten pieces of wealth could go missing after a person’s death, especially if they kept notoriously poor track of their financial matters or weren’t on top of their investments and net worth in the last years of their life.

They may not have included these assets in their will and neglected to name a designated beneficiary for them. Or they named a primary beneficiary without a secondary, and their primary beneficiary had no heirs to pass their new inheritance onto after dying or disappearing.

When we die, anything we owned in life must be distributed among the living. However, it is still largely our job to account for what we own and ensure that some sort of plan exists for the management and distribution of our assets in case we pass away.

Without that, it’s up to our family members to pick up the pieces and gain access to crucial financial information before and during probate, with guidance from local probate or surrogate courts. This can be difficult and stressful, and depending on how neatly and coherently you preserved your data, as well as how accessible it might be to your loved ones, it may also be a fruitless endeavor.

Banks, financial institutions, and holding companies eventually list an asset or account as dormant and subsequently pass it onto the state’s unclaimed property division if no legitimate heirs show up. This way, an unclaimed property, account, or asset lands in the government’s lap, and never finds its way to its rightful heirs, who may not even be aware that they had a right to it.

Of course, there are other cases where an inheritance may be unclaimed, while still being known.

For example, if a home was attributed to you while you were in a different country, or in active duty, or in a coma, then it would be an executor’s job to ensure that news of the probate process reaches you, and/or that the property is held and managed in your name. Similarly, if you are incarcerated, anything you inherit will be waiting for you when you get out.

If, under rare circumstances, an executor was unable to attribute the inherited property to you (missing, presumed dead, unidentified in a coma, etc.) and there were no other heirs around to inherit, your inheritance may first go to the government.

What Happens to an Unclaimed Inheritance?

If an asset or property does not find its way onto a will or some other estate planning document, and there are little to no signs of its existence among the financial details and documents the decedent left behind, chances are that the asset or property may go unclaimed.

Unclaimed assets and property are managed by the state government. They undergo a process known as escheatment, during which property passes into the state’s ownership, and through eventual liquidation, into the state’s coffers.

While there is a time limit for how long a property or asset can go unclaimed before the government steps in to manage it, there is virtually no time limit on reclaiming said asset or its value from the government, provided you have the proof to inherit it.

There are multiple online tools and county-specific searchable databases dedicated to helping people identify and reclaim lost or unclaimed inheritances left dormant, or under government control. You can appeal and discuss your case with the state in order to reclaim your inheritance.

Depending on the circumstances surrounding your unclaimed inheritance, it may be wise to approach the process of reclaiming it with the help of a probate professional. An attorney will be best equipped to argue for your case and help you gain access to what is rightfully yours.

Unclaimed Inheritance and Intestate Succession

If an inheritance is left unclaimed by an individual or is disclaimed (i.e. a person opting out of their inheritance, and refusing to accept it), the asset will usually be passed on to the next viable kin as per local intestate law.

Intestate succession is the order in which assets are distributed in the absence of a will or other estate planning documents. Even if an item is listed in a will, a disclaim may force an executor to choose a different beneficiary for the item as per intestate succession.

In certain states and jurisdictions, intestate succession has a limit before the term “next of kin” is exhausted. For example, some states and counties do not allow distant relatives to inherit without a personal connection to the deceased.

Distant relatives are also known as “laughing heirs”, a term used to describe someone receiving an inheritance without any feelings of familiarity or bereavement for the decedent.

These are generally reasonable limits that prevent a distant cousin to inherit from someone they’ve never met, for example. Under the Uniform Probate Code, which provides the basis for the probate code in most US states, the outer limits for the right to inheritance lie with grandparents, aunts, uncles, and first cousins. Any heirs removed further from the decedent than this will generally have no claim to the estate.

However, states do have different ways of defining and setting these limits. It’s always best to consult a local probate attorney.

Recovering an Unclaimed Inheritance

You can recover an unclaimed inheritance by scouring online databases, using a professional locator service to uncover assets and properties that might have belonged to your deceased relative, and using the services of a probate attorney to help you reclaim assets from the government.

It is in your best interest to work with a professional when looking for an unclaimed inheritance. They can save you most of the legwork and can act as mediators between you and the state to expedite the reclaiming process, and reunite you with your inheritance.


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