Interest on Escrow Accounts (Another Randi Thread)

[lucwarm]

I was just checking out the James Randi website, and he states that he won’t put his million dollar prize in escrow because it would deprive his organization of interest income:

We continue to receive inquiries about why we refuse to place the million dollars prize money of the JREF challenge in escrow to satisfy the fears of applicants that it might not be available when they so easily sweep in and claim the prize.

. . .

By placing the million dollars in escrow, the JREF would lose the income from the money, and besides, we are not in the business of catering to the whims of these people. This is our challenge, not theirs.

. . .

When we’ve asked the complainers to pay the interest that we’d lose if the sum were to be placed in escrow, they have always terminated the discussion.

This strikes me as odd. As an attorney, my understanding is that if large amounts of money are placed in escrow, the interest belongs to the client. I don’t see why Randi couldn’t set things up so that the million dollars is held by a third part, but the interest goes to his organization until such time as the prize is claimed.

Any thoughts?

[Random]

Agree in theory, but escrowees don’t work for free. With today’s low interest rates, those escrow fees could really eat into the interest.

There’s also better investments out there. IME, escrowees don’t pay high interest rates.

[ftg]

IANAA but would the account earn interest but the interest would go to the winner? And lacking a winner, the interest would just accumulate with no one ever(?) being able to use it??