How dormancy triggers, due diligence, and escheatment work, and how to prevent accounts from sliding into the system.
5 min read
A paycheck never arrives. It was mailed to an old address after a move. The employer assumes it was received. Months pass. Life continues.
Years later, a friend mentions an unclaimed property search. A quick search reveals the missing paycheck, now held by the state. The money was not stolen. It was not destroyed. It simply moved into a different system because no one responded within the dormancy window.
Unclaimed property becomes “lost” through a defined legal process. The process is designed to protect consumers, but it is easy to trigger unintentionally.
The typical cycle looks like this:
Dormancy periods vary by state and property type. Many jurisdictions treat payroll checks differently from bank deposits or securities. For example, some state guidance notes that payroll, wages, and commissions commonly have a one-year dormancy period, while many other property types are commonly three years.
The process is often misunderstood because it happens “in the background.” If an account is paperless and the owner has moved, the due diligence letter may never be seen.
Dormancy rules are state-specific. The table below reflects common patterns described in state guidance and unclaimed property compliance references.
| Property type | Common dormancy pattern | What triggers dormancy |
|---|---|---|
| Payroll and wages | Often 1 year | No check cashing or owner contact |
| Checking and savings | Often 3 to 5 years | No transactions or owner contact |
| Dividends and securities | Often 3 years | No owner contact, uncashed distributions |
| Refunds and vendor checks | Often 3 to 5 years | No cashing, no owner response |
The key detail is that “activity” can be defined narrowly. Logging into an account, making a small transaction, or responding to a notice can reset dormancy, depending on the holder and state law.
$60 Billion in Unclaimed Assets – The consequence of discovery failure
How Digital Assets Slip Through the Cracks – Discovery precedes access
The Family Access Plan – A complete documentation checklist.
The escheatment process is predictable. Accounts become unclaimed when they become invisible and inactive at the same time. Visibility is the part families can control.
SafeHerit lets you document information about assets and accounts that might otherwise go dormant, including where they are held and what should be monitored, so that nothing quietly slips into the unclaimed property system when the time comes.
