Abandonment Definition

Definition of Abandonment in Insurance Concepts

Insurance & Business Definitions for "Abandonment"

Abandonment in Accounting - The definition of "Abandonment" as most commonly is used in accounting purposes is the voluntary surrender of property that is owned or leased by an individual without that individual specifying another person to succeed him or her as rightful owner. In the case of abandonment, property will usually become the property of the state.

Abandonment in Finance & Securities - Voluntarily releasing all claim to a piece of property that rightfully belongs to an individual. Abandoned property (for example, stocks or securities) will eventually revert to the state under the laws of escheat (a common law doctrine meant to ensure that ownerless property does not remain in limbo). Patents, inventions, trademarks, and copyrights are all examples of financial assets that can be abandoned.

Abandonment in Banking and Finance - The voluntary surrender of rights to property, including the forfeiture of any legal claim to the ownership of that property. Unused savings, checking, or brokerage accounts are considered abandoned if they are unused for a certain number of years (often 5). Usually a bank will seek to notify the owner of the account before this period elapses, at which point the owner must contact the bank directly to confirm ownership of the account or risk losing those assets to the federal government.

Abandonment in Business & Real Estate - The voluntary, intentional surrender of rights to property without the naming of a recipient as owner. If there is an entity or individual with a prior interest or claim to that property, it is possible that the property will revert to their ownership. If no owner is apparent, the property will be given to the state. Abandoning property does not remove the obligations associated with the property unless explicitly accepted by the new owner.

What does the term "Abandonment" mean?

Definitions provided as a service by CPMI for life and health insurance licensing, property and casualty insurance licensing, and insurance continuing education.

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