Escheat occurs when there are no legal heirs to property. In finances, this occurs most frequently when a law firm fails to cash a refund check within 90 days. When this occurs governmental agencies are required to send the funds to the state. These funds can be collected at a later date by the firm should they choose. Agencies are required to remit the funds to the state once a year along with an itemized report of the attorneys and amounts.
To track escheated funds in QuickBooks Desktop.
Link the journal entry to the existing credit created when the refund check was voided
At the end of the year issue a check to the state for the total amount in the liability account along with a detailed report