The History Behind California’s Unclaimed Property Law and What It Means for You

Introduction: Why California’s Unclaimed Property Law Matters
Have you ever been surprised to find out the state might be holding money or assets that belong to you—or even a deceased relative? You’re not alone. Each year, California takes possession of millions of dollars in forgotten bank accounts, uncashed checks, insurance payouts, stocks, and more. This system isn’t new; it’s based on a legal framework decades in the making.

Understanding the history behind California’s Unclaimed Property Law gives you insight into why these laws were created, how they work today, and what rights you have to claim what’s rightfully yours.

A Look Back: How It All Began

Origins of Escheatment Laws

The foundation of California’s unclaimed property laws is rooted in the ancient legal doctrine of escheat, a principle dating back to feudal England. Under escheat, if a person died without heirs, or if property was abandoned, the crown would claim ownership. The logic: better for the government to hold property than to let it go unclaimed or misused.

When the United States adopted its legal framework, many states, including California, carried over this doctrine—but updated it for modern financial life.

The Uniform Unclaimed Property Act (1954)

Fast forward to the 20th century. As commerce expanded, people moved frequently, and paper-based banking made it easy to forget about dormant accounts. In 1954, the Uniform Unclaimed Property Act (UUPA) was drafted to help states recover unclaimed financial assets and provide a path for rightful owners to reclaim them.

California adopted its own version of this act in the late 1950s, formalizing a process by which businesses (known as “holders”) would report and transfer unclaimed assets to the state for safekeeping.

California’s Unclaimed Property Law: Key Milestones

1959 – Initial Adoption

California enacted its unclaimed property statutes under the California Code of Civil Procedure, beginning with Section 1500. The primary aim was consumer protection: ensuring abandoned property wasn’t lost to financial institutions or private companies forever.

1980s – Enforcement and Expansion

By the 1980s, state enforcement expanded significantly. The State Controller’s Office (SCO) began more actively reviewing businesses and auditing holders to ensure compliance. The law expanded to cover more property types—stocks, dividends, wages, life insurance benefits, and more.

2000s – Litigation and Reform

In the early 2000s, California faced several lawsuits arguing that the state’s procedures violated due process—particularly because property owners weren’t adequately notified before the state took possession. In response, the legislature improved outreach, mandated clearer notices, and emphasized consumer education.

How the Law Works Today

What Is Considered “Unclaimed” Property?

Property becomes unclaimed when there has been no contact with the owner for a set period, known as the dormancy period. This ranges from 1 to 7 years, depending on the asset type. Examples include:

Checking and savings accounts
Uncashed payroll or refund checks
Stocks and dividends
Insurance policy payouts
Safe deposit box contents
Gift certificates (if applicable)

Role of Holders

Businesses and financial institutions must make reasonable efforts to contact the property owner before reporting and sending the property to the state. If contact isn’t made, they submit a Notice Report to the State Controller’s Office, followed by a Remit Report, which transfers the asset to the state.

Your Rights as a Property Owner

If your name appears on the California Unclaimed Property Database, you have the right to file a claim for free. There is no time limit for claiming your property once the state has taken custody, unlike in other states where escheat can become permanent.

Why the Law Still Matters in 2025

Billions in Unclaimed Assets

As of 2025, California is holding over $12 billion in unclaimed property, and millions of residents are unaware they’re entitled to a piece of it. The law ensures that:

You remain the rightful owner
Your heirs can claim on your behalf
No private party can exploit forgotten assets

Consumer Protection

Imagine if insurance companies could permanently keep unpaid claims, or if banks could absorb inactive accounts. California’s law protects the public from such practices by creating a centralized and secure method of holding and returning lost property.

Economic Benefits

This system benefits the economy. The state temporarily uses unclaimed funds to support public services—but must always return the property upon rightful claim. It’s a win-win model that maximizes unused funds while keeping the door open for claimants.

Common Misconceptions

“The State Takes My Money Forever”

False. Unlike permanent escheatment, California’s law ensures the state only holds property until claimed. You or your heirs can always reclaim it, even decades later.

“There’s a Fee to Claim My Property”

No. California does not charge to file a claim. However, legitimate asset locators may charge a fee for helping you recover property faster, especially if the process is complex or requires probate documentation.

“Only Individuals Can Claim”

Not true. Businesses, nonprofits, estates, and heirs can all legally recover unclaimed property as long as they can prove entitlement.

What It Means for You and Your Family

Check Regularly

With unclaimed property laws in place for decades, it’s entirely possible that you or a relative—living or deceased—has forgotten property. Check annually using your name, old addresses, or family member names.

Claiming as an Heir

If a loved one has passed away and you’re managing their estate, you may be entitled to property they left behind. This often requires:

A copy of the death certificate
Probate or small estate documentation
Proof of your legal relationship

Estate Planning Implications

Many people forget to include accounts or digital assets in their estate plan. Understanding California’s unclaimed property law can help you:

Notify heirs of potential assets
Keep your information updated with banks and insurers
Prevent property from becoming unclaimed in the first place

Future Outlook and Reforms

Push for Digital Outreach

California continues improving its outreach tools—developing digital reminders, matching unclaimed property with tax records, and enabling easier filing methods online.

Legislative Proposals

Recent bills have suggested expanding the types of property reported (e.g., crypto assets) and shortening the dormancy periods for faster public benefit. These changes will only strengthen protections for consumers.

Transparency and Audits

To protect both holders and claimants, the state conducts regular audits. It also maintains transparency in its database and encourages public access through education campaigns.

Final Thoughts: Claim What’s Rightfully Yours

California’s unclaimed property law wasn’t built overnight—it’s the result of decades of legal development designed to protect your rights and ensure your forgotten assets are never truly lost. Whether it’s a payroll check from a decade ago, a forgotten savings account, or insurance money owed to your family, this law exists to make sure it comes back to you.

At Claim My California Property, we specialize in helping individuals and families navigate this system efficiently. We assist with complex claims, probate documentation, and multi-heir situations so you don’t have to do it alone.