SB 2642 creates a new part of Tennessee law governing how charitable organizations can claim property that passes by beneficiary designation after a person’s death. The bill defines “charitable organization” and “charitable purpose,” including IRS 501(c)(3) organizations and certain benevolent, educational, religious, patriotic, public-safety, and similar entities. It applies to non-probate transfers such as payable-on-death accounts, beneficiary-form securities, retirement and employment-related benefits, and other beneficiary-designated property.
Under the bill, once a property holder is notified of the owner’s death, the holder must use reasonable efforts within 10 business days to notify any listed charitable beneficiary and provide contact information. A charitable organization may then submit a detailed affidavit, along with supporting documents such as proof of tax-exempt status, proof of authority, death documentation, and a W-9, to request the property or information about it. The bill also limits what personal information a holder may demand from charitable representatives, prohibits credit checks and background checks, and bars requiring the charity to become a customer of a particular financial institution.
The bill sets deadlines for distribution: generally within 90 days after the first complete affidavit or 60 days after all required affidavits are received, with an additional 60 days allowed if there is a good-faith dispute or uncertainty and notice is given to potential beneficiaries. If the statutory requirements are met, the property must be transferred to the charitable organization, and transfer agents must update security registrations accordingly. The bill also provides liability protections for holders and others acting in good faith, allows a charitable organization to sue if property is wrongfully withheld, and authorizes actual damages, punitive damages, costs, and attorney’s fees in certain cases. It excludes insurance policies, annuities, and other title 56 products.
The bill’s impact is to create a specific statutory process for charitable beneficiaries to collect assets passing outside probate, while also imposing duties on financial institutions, transfer agents, and other holders of beneficiary-designated property. It expands the legal framework in Titles 35 and 48 by clarifying charitable beneficiary rights, documentation requirements, notice obligations, and enforcement remedies, and it applies prospectively to conduct and causes of action on or after July 1, 2026.
The overall sentiment appears strongly favorable and noncontroversial. The bill passed the Senate Commerce and Labor Committee unanimously and later passed floor votes without any recorded opposition, suggesting broad support for streamlining charitable claims and reducing administrative barriers. No committee transcript is available, but the voting history indicates little visible resistance.
The main potential points of contention are the burden placed on holders of property and the privacy limits on information requests. The bill requires prompt notice, sets firm deadlines, restricts what personal data can be requested from charity representatives, and authorizes litigation and damages for noncompliance. Those provisions could concern financial institutions, transfer agents, or other holders, while charitable organizations are likely to support the bill’s clearer claim process and anti-delay protections.
SB 2642 adds a new statutory scheme to Title 48 governing charitable organizations’ rights to claim beneficiary-designated property after an owner’s death. It establishes notice duties for holders, affidavit and documentation requirements for charities, limits on information requests, distribution deadlines, liability protections, and a private right of action with damages and attorney’s fees for unreasonable noncompliance. The act applies to conduct and causes of action arising on or after July 1, 2026, and excludes insurance and annuity products regulated under Title 56.
The bill appears to have enjoyed broad bipartisan or at least unanimous practical support throughout the legislative process. It was recommended for passage in committee by a 9-0 vote, then passed subsequent floor votes without recorded opposition. The available voting record suggests the measure was viewed as a procedural and administrative improvement for charitable beneficiaries rather than a controversial policy change.
The likely areas of concern are operational and privacy-related rather than ideological. Holders of property may object to the mandatory notice timeline, the requirement to process affidavits and distribute proceeds within set deadlines, and the exposure to damages and attorney’s fees if they fail to comply. The bill also restricts requests for personal information and forbids credit checks, background checks, and mandatory account relationships, which may limit how institutions verify claims. Charitable organizations, by contrast, are the primary beneficiaries of the new process and would favor the bill’s streamlined access to non-probate assets.