AN ACT to amend Tennessee Code Annotated, Title 35 and Title 48, relative to charitable organizations.
HB2112 creates a new part in Tennessee’s business and probate-related code governing how charitable organizations can claim property that passes by beneficiary designation outside of a will or trust. The bill defines charitable organizations and charitable purposes broadly, covering IRS 501(c)(3) entities and organizations serving benevolent, educational, health, patriotic, religious, public safety, and similar purposes. It also includes affiliates or chapters soliciting in Tennessee for out-of-state charities.
The bill requires holders of property, once notified of the owner’s death, to make reasonable efforts within 10 business days to notify any charitable beneficiary listed on the designation and provide contact information. A charitable organization may then submit a detailed affidavit, along with supporting documentation such as IRS tax-exempt status, proof of authority, death documentation, and a W-9, to obtain the property or information about it. The bill also prohibits holders from demanding certain personal information from charity representatives, from requiring credit or criminal background checks, from forcing a charity to open an account at a specific financial institution, and from imposing coordination deadlines among co-beneficiaries except in limited circumstances.
If the affidavit and required documentation are complete, the holder must distribute the property or information within specified deadlines, generally within 90 days of the first complete affidavit or 60 days after all required affidavits are received, with an additional 60 days allowed for good-faith disputes. The bill also authorizes transfer agents to retitle securities to the charitable beneficiary and provides that holders acting in good faith are shielded from liability when relying on the affidavit. If a holder refuses to comply, the charity may sue to recover the property or information and may seek actual damages, punitive damages, court costs, and attorney fees. The bill excludes insurance policies, annuities, and other products regulated under Title 56.
The overall sentiment appears strongly favorable, as reflected by unanimous committee votes in the House Civil Justice Subcommittee and House Judiciary Committee. The bill moved with no recorded opposition in those votes and was recommended for passage at each stage noted in the context. The discussion record provided does not include transcript debate, but the committee actions suggest broad support for clarifying and streamlining charitable beneficiary claims.
The main points of contention, based on the text itself, are likely to involve privacy and administrative burden concerns for holders of property, as the bill limits what information can be requested from charity representatives and sets firm deadlines and penalties for noncompliance. Another possible area of concern is the bill’s expansion of rights for charitable beneficiaries in nonprobate transfers, including the ability to sue and recover damages if property is withheld. No specific opposition is shown in the available voting history, however.
The bill adds a new statutory framework in Title 48 governing charitable beneficiaries named in beneficiary designations, affecting financial institutions, transfer agents, and other holders of payable-on-death accounts, securities, retirement-related benefits, and other nonprobate assets. It creates notice, affidavit, transfer, and enforcement procedures, while limiting the information and conditions holders may demand before releasing property to a charity. It also provides liability protections for good-faith compliance and a private right of action for charities, and it expressly excludes insurance and annuity products regulated under Title 56.
The available voting history indicates clear support for the bill, with unanimous favorable recommendations in the House Civil Justice Subcommittee and the House Judiciary Committee. No committee opposition or recorded dissent appears in the provided materials, suggesting the measure was viewed as a technical or procedural clarification for charitable organizations rather than a controversial policy change.
The likely areas of contention are the bill’s balance between facilitating charitable claims and protecting holders from fraud, administrative complexity, or privacy intrusions. The statute requires detailed affidavits and imposes deadlines and penalties, which may concern financial institutions and other holders, while charities may view those requirements as necessary to secure intended gifts. The bill also allows limited disclosure among charitable co-beneficiaries and restricts background checks and personal data requests, which could be debated as either appropriate safeguards or constraints on verification. No explicit opposition is reflected in the committee votes provided.