Tag: canada

Canadian Unclaimed Property

Our neighbors to the north handle unclaimed property differently than we do here in the states, and the rule differences between provinces are stark. Understanding these differences is useful if you do business in Canada.

One important difference is that federally regulated banks are administered by The Bank of Canada, the country’s central bank. All unclaimed balances are to be reported directly to this central authority after ten years of inactivity. Note that this does not cover credit unions, which are very popular in Canada.

Another important difference is that while in the United States, unclaimed property is almost always held indefinitely by the states (though there are a few exceptions), Canada has true escheat. The Bank of Canada acts as a custodian of the funds for a given period of time, after which the money is definitively transferred to the Receiver General for Canada. For funds under $1,000, this time period is 30 years. For amounts over $1,000, owners and their heirs have 100 years to collect their unclaimed property.

As of today, only three Canadian provinces have unclaimed property laws on the books. They are Alberta, British Columbia, and Quebec. The country’s most populous province, Ontario, has no unclaimed property law, despite a series of halting efforts dating back to 1989.

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What Does Escheat Mean?

In the unclaimed property world we toss the word escheat around freely, to the befuddlement of the uninitiated. Further complicating matters, we often use it incorrectly!

The word escheat comes from the Old French word escheoir, meaning “to fall” and entered into the English language during the Norman Conquest. When William the Conqueror took over England, he owned all the land, and gave his vassals the right to use certain plots of land as tenants. If ever a tenant ran afoul of the crown, or died without an heir, the land would “escheat” back to the king.

In the present day United States, escheatment refers to the legal transfer of property to the state. If a person dies intestate, and no heirs are around to claim their property, that land will eventually escheat to the state.

But when we are talking about unclaimed savings accounts or payroll checks, we are rarely talking about true escheatment. When money is considered abandoned after a given dormancy period it is remitted to a state, which acts as the custodian of the property until the rightful owner comes to claim it. There is almost never a time-limit, meaning your great-great-great-granddaughter could recover that check you never cashed—provided she has the proper documentation.

That said, be aware that there are certain jurisdictions that have provisions for the “true escheat” of unclaimed monies.

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