Concerning the payment of designated benefits to a charitable organization upon the death of a donor.
SB 26-118 creates a new process for paying death benefits that have been designated to a charitable organization. It applies to covered financial entities such as banks, broker-dealers, depository institutions, credit unions, and certain investors that hold payable-on-death or similar assets, including annuities, insurance proceeds, POD accounts, securities, and retirement-related benefits. Under the bill, once a charitable organization submits a detailed affidavit confirming the donor’s death and providing required documentation, the covered entity must pay the designated benefits within 60 calendar days, unless federal law or a court order requires otherwise.
The bill also addresses situations where the charitable organization may be liable to the donor’s estate for creditor claims, statutory allowances, or a surviving spouse’s elective-share claims. If such a claim exists, the charity must return all or part of the funds to the estate within 60 days after written notice, and if it does not, statutory interest and court remedies may apply. The bill further requires the charity to hold disputed funds in constructive trust pending resolution of the claim, and it prohibits covered entities from conditioning payment on the charity opening an account or providing personal information about its staff or board members beyond what the bill requires.
The bill adds section 15-15-104 to the Colorado Revised Statutes and directly regulates how designated death benefits are transferred to charitable organizations. It establishes documentation requirements, payment deadlines, a federal-law accommodation period, and enforcement authority for the Division of Banking, the Financial Services Board, and the Division of Securities. It also creates new obligations for charitable organizations to refund benefits when estate claims must be satisfied, and it authorizes courts to impose injunctions, attachments, constructive trusts, attorney fees, and other remedies.
The available context suggests the bill moved forward without recorded opposition in the provided materials and was ultimately signed by the Governor. Its structure indicates a policy goal of making charitable beneficiary designations easier and more predictable to administer, while also protecting estates and surviving spouses from being deprived of amounts needed to satisfy statutory claims. Overall, the bill appears to have been treated as a technical but meaningful financial and probate administration measure rather than a highly controversial proposal.
The main points of tension are between efficient payment to charities and protection of estate and family claims. Charitable organizations may be concerned about the liability and refund obligations tied to creditor claims, statutory allowances, and elective-share rights, especially the requirement to return funds quickly and potentially pay interest. Covered entities may also object to the operational burden of the affidavit process, the 60-day and 120-day timelines, and the limits on requiring account setup or personal information. On the other side, estate representatives and surviving spouses benefit from the bill’s explicit preservation of claims and remedies, which are designed to prevent charitable transfers from bypassing legally protected obligations.