*HB1081.1*
January 21, 2025
HOUSE BILL No. 1081
_____
DIGEST OF HB 1081 (Updated January 21, 2025 1:17 pm - DI 154)
Citations Affected: IC 23-17.
Synopsis: Distributions to charitable beneficiaries. Provides that if a
charitable organization is designated as the beneficiary of an individual
retirement account, retirement account, brokerage transfer on death
account, annuity, or life insurance policy, a financial institution or
insurance company in control of the funds must transfer the funds
directly to the charitable organization without requiring certain
conditions to be satisfied, if the charitable organization submits a
certain affidavit.
Effective: July 1, 2025.
Manning
January 8, 2025, read first time and referred to Committee on Financial Institutions.
January 21, 2025, amended, reported — Do Pass.
HB 1081—LS 6476/DI 154 January 21, 2025
First Regular Session of the 124th General Assembly (2025)
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HOUSE BILL No. 1081
A BILL FOR AN ACT to amend the Indiana Code concerning
business and other associations.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 23-17-25.7 IS ADDED TO THE INDIANA CODE
2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2025]:
4 Chapter 25.7. Charitable Organization Beneficiary Bequest
5 Protections
6 Sec. 1. The following definitions apply throughout this chapter:
7 (1) "Charitable organization" means any entity that is:
8 (A) recognized as tax exempt under Section 501(c)(3) of the
9 Internal Revenue Code; and
10 (B) organized under IC 23-17-3.
11 (2) "Deceased" means a person who has:
12 (1) died; and
13 (2) designated a charitable organization as the beneficiary
14 of an individual retirement account, retirement account,
15 brokerage transfer on death account, annuity, or life
16 insurance policy
17 (3) "Financial institution" means any:
HB 1081—LS 6476/DI 154 2
1 (A) bank;
2 (B) trust company;
3 (C) corporate fiduciary;
4 (D) savings association;
5 (E) credit union;
6 (F) savings bank;
7 (G) bank of discount and deposit; or
8 (H) industrial loan and investment company;
9 organized or reorganized under Indiana law, the law of
10 another state (as defined in IC 28-2-17-19), or United States
11 law.
12 Sec. 2. If a charitable organization is designated as the
13 beneficiary of an individual retirement account, retirement
14 account, brokerage transfer on death account, annuity, or life
15 insurance policy, a financial institution or insurance company in
16 control of the funds shall do the following:
17 (1) Transfer the funds directly to the charitable organization
18 upon receipt of an affidavit submitted by the charitable
19 organization that contains the following information:
20 (A) A statement by the charitable organization confirming
21 that it is tax exempt under Section 501(c)(3) of the Internal
22 Revenue Code.
23 (B) A copy of a corporate resolution authorizing the
24 acceptance of the transferred funds.
25 (C) An Internal Revenue Service Form W-9 for
26 identification.
27 (D) A copy of:
28 (i) the deceased's death certificate;
29 (ii) a notice of probate for the deceased's estate published
30 in a newspaper;
31 (iii) documentation demonstrating that the deceased's
32 funeral expenses have been paid; or
33 (iv) a published obituary for the deceased.
34 (2) Refrain from requiring:
35 (A) personal information, including the Social Security
36 number, home address, and date of birth, of any employee,
37 officer, or agent of the charitable organization; or
38 (B) the charitable organization to open an account or
39 otherwise become a customer of the financial institution or
40 insurance company;
41 as a condition of transferring the funds.
42 Sec. 3. (a) A financial institution or insurance company that
HB 1081—LS 6476/DI 154 3
1 receives the affidavit described in section 2(1) of this chapter shall:
2 (1) comply with the requirements of section 2 of this chapter;
3 or
4 (2) provide to the charitable organization that submitted the
5 affidavit described in section 2(1) of this chapter a reasonable
6 justification for not complying with the requirements of
7 section 2 of this chapter;
8 not later than thirty (30) days after receiving the affidavit.
9 (b) It is a reasonable justification for not complying with the
10 requirements of section 2 of this chapter if compliance would cause
11 a financial institution to violate 12 U.S.C. 1829b, 12 U.S.C.
12 1951-1960, 31 U.S.C. 5311-5314, 31 U.S.C. 5316-5336, or 31 C.F.R.
13 1000-1099.
14 (c) If compliance with the requirements of section 2 of this
15 chapter would cause a violation of a federal law described in
16 subsection (b), the financial institution shall include in its
17 reasonable justification a request to the charitable organization to
18 provide the information required to comply with the federal law
19 described in subsection (b).
20 (d) If a financial institution or insurance company fails to
21 comply or provide a reasonable justification for not complying
22 with the requirements of section 2 of this chapter not later than
23 thirty (30) days after receiving the affidavit described in section
24 2(1) of this chapter, a court:
25 (1) may award the charitable organization damages sustained
26 due to the delay in receiving the funds under section 2(2) of
27 this chapter;
28 (2) may award the charitable organization court costs,
29 including attorney's fees; and
30 (3) shall impose a civil penalty on the financial institution or
31 insurance company in an amount not less than five hundred
32 dollars ($500) and not more than ten thousand dollars
33 ($10,000) per incident.
34 Sec. 4. (a) A charitable organization may bring an action in
35 court or file a complaint with the department of financial
36 institutions if the charitable organization believes that a financial
37 institution is not complying with this chapter.
38 (b) A charitable organization may bring an action in court or
39 file a complaint with the department of insurance if the charitable
40 organization believes that an insurance company is not complying
41 with this chapter.
42 (c) If a charitable organization chooses to file a complaint with
HB 1081—LS 6476/DI 154 4
1 the department of financial institutions under subsection (a), the
2 department of financial institutions:
3 (1) shall investigate the complaint;
4 (2) may award the charitable organization damages sustained
5 due to the delay in receiving the funds under section 2(2) of
6 this chapter; and
7 (3) shall impose a civil penalty on the financial institution in
8 an amount not less than five hundred dollars ($500) and not
9 more than ten thousand dollars ($10,000) per incident.
10 (d) If a charitable organization chooses to file a complaint with
11 the department of insurance under subsection (b), the department
12 of insurance:
13 (1) shall investigate the complaint;
14 (2) may award the charitable organization damages sustained
15 due to the delay in receiving the funds under section 2(2) of
16 this chapter; and
17 (3) shall impose a civil penalty on the insurance company in
18 an amount not less than five hundred dollars ($500) and not
19 more than ten thousand dollars ($10,000) per incident.
HB 1081—LS 6476/DI 154 5
COMMITTEE REPORT
Mr. Speaker: Your Committee on Financial Institutions, to which
was referred House Bill 1081, has had the same under consideration
and begs leave to report the same back to the House with the
recommendation that said bill be amended as follows:
Page 3, line 4, after "provide" insert "to the charitable
organization that submitted the affidavit described in section 2(1)
of this chapter".
Page 3, between lines 6 and 7, begin a new paragraph and insert:
"(b) It is a reasonable justification for not complying with the
requirements of section 2 of this chapter if compliance would cause
a financial institution to violate 12 U.S.C. 1829b, 12 U.S.C.
1951-1960, 31 U.S.C. 5311-5314, 31 U.S.C. 5316-5336, or 31 C.F.R.
1000-1099.
(c) If compliance with the requirements of section 2 of this
chapter would cause a violation of a federal law described in
subsection (b), the financial institution shall include in its
reasonable justification a request to the charitable organization to
provide the information required to comply with the federal law
described in subsection (b).".
Page 3, line 7, delete "(b)" and insert "(d)".
and when so amended that said bill do pass.
(Reference is to HB 1081 as introduced.)
TESHKA
Committee Vote: yeas 10, nays 0.
HB 1081—LS 6476/DI 154