*EH1081.1*
March 14, 2025
ENGROSSED
HOUSE BILL No. 1081
_____
DIGEST OF HB 1081 (Updated March 13, 2025 10:54 am - DI 140)
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, Teshka, Pierce K,
Andrade
(SENATE SPONSORS — BALDWIN, RANDOLPH LONNIE M)
January 8, 2025, read first time and referred to Committee on Financial Institutions.
January 21, 2025, amended, reported — Do Pass.
January 27, 2025, read second time, ordered engrossed.
January 28, 2025, engrossed. Read third time, passed. Yeas 91, nays 0.
SENATE ACTION
February 18, 2025, read first time and referred to Committee on Insurance and Financial
Institutions.
March 13, 2025, amended, reported favorably — Do Pass.
EH 1081—LS 6476/DI 154 March 14, 2025
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
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provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2024 Regular Session of the General Assembly.
ENGROSSED
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 (A) died; and
13 (B) 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:
EH 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;
8 (H) industrial loan and investment company; or
9 (I) investment company;
10 organized or reorganized under Indiana law, the law of
11 another state (as defined in IC 28-2-17-19), or United States
12 law.
13 (4) "Indirect proof of death documents" means any two (2) of
14 the following:
15 (A) A notice of probate for the deceased's estate published
16 in a newspaper.
17 (B) A document demonstrating that the deceased's funeral
18 expenses have been paid.
19 (C) A published obituary for the deceased.
20 Sec. 2. If a charitable organization is designated as the
21 beneficiary of an individual retirement account, retirement
22 account, brokerage transfer on death account, annuity, or life
23 insurance policy, a financial institution or insurance company in
24 control of the funds shall do the following:
25 (1) Transfer the funds directly to the charitable organization
26 upon receipt of an affidavit submitted by the charitable
27 organization that contains the following information:
28 (A) A statement by the charitable organization confirming
29 that it is tax exempt under Section 501(c)(3) of the Internal
30 Revenue Code.
31 (B) A copy of a corporate resolution authorizing the
32 acceptance of the transferred funds.
33 (C) An Internal Revenue Service Form W-9 for
34 identification.
35 (D) A copy of:
36 (i) the deceased's death certificate;
37 (ii) a document demonstrating that a court of competent
38 jurisdiction has issued a finding of death for the
39 deceased; or
40 (iii) indirect proof of death documents.
41 (2) Shall not require:
42 (A) personal information, including the Social Security
EH 1081—LS 6476/DI 154 3
1 number, home address, and date of birth, of any employee,
2 officer, or agent of the charitable organization; or
3 (B) the charitable organization to open an account or
4 otherwise become a customer of the financial institution or
5 insurance company;
6 as a condition of transferring the funds.
7 Sec. 3. (a) A financial institution or insurance company that
8 receives the affidavit described in section 2(1) of this chapter shall:
9 (1) comply with the requirements of section 2 of this chapter;
10 or
11 (2) provide to the charitable organization that submitted the
12 affidavit described in section 2(1) of this chapter a reasonable
13 justification for not complying with the requirements of
14 section 2 of this chapter;
15 not later than forty-five (45) days after receiving the affidavit.
16 (b) It is a reasonable justification for not complying with the
17 requirements of section 2 of this chapter if compliance would cause
18 a financial institution to violate 12 U.S.C. 1829b, 12 U.S.C.
19 1951-1960, 31 U.S.C. 5311-5314, 31 U.S.C. 5316-5336, or 31 CFR
20 1000-1099.
21 (c) If compliance with the requirements of section 2 of this
22 chapter would cause a violation of a federal law described in
23 subsection (b), the financial institution shall include in its
24 reasonable justification a request to the charitable organization to
25 provide the information required to comply with the federal law
26 described in subsection (b).
27 (d) If a financial institution or insurance company fails to
28 comply or provide a reasonable justification for not complying
29 with the requirements of section 2 of this chapter not later than
30 forty-five (45) days after receiving the affidavit described in section
31 2(1) of this chapter, a court may:
32 (1) award the charitable organization damages sustained due
33 to the delay in receiving the funds under section 2(2) of this
34 chapter;
35 (2) award the charitable organization court costs, including
36 attorney's fees; and
37 (3) impose a civil penalty on the financial institution or
38 insurance company in an amount not less than five hundred
39 dollars ($500) and not more than ten thousand dollars
40 ($10,000) per incident.
41 Sec. 4. A charitable organization may bring an action in court
42 under section 3(d) of this chapter or file a complaint with the
EH 1081—LS 6476/DI 154 4
1 applicable primary regulator with jurisdiction over a financial
2 institution or an insurance company if the charitable organization
3 believes that a financial institution or insurance company is not
4 complying with this chapter. If a charitable organization files a
5 complaint, the applicable primary regulator shall investigate the
6 complaint. The applicable primary regulator may impose a civil
7 penalty on the financial institution or insurance company in an
8 amount not less than five hundred dollars ($500) and not more
9 than ten thousand dollars ($10,000) per incident.
EH 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.
_____
COMMITTEE REPORT
Mr. President: The Senate Committee on Insurance and Financial
Institutions, to which was referred House Bill No. 1081, has had the
same under consideration and begs leave to report the same back to the
Senate with the recommendation that said bill be AMENDED as
follows:
Page 1, line 12, delete "(1)" and insert "(A)".
Page 1, line 13, delete "(2)" and insert "(B)".
Page 1, line 16, after "policy" insert ".".
Page 2, line 7, delete "or".
EH 1081—LS 6476/DI 154 6
Page 2, line 8, after "company;" insert "or".
Page 2, between lines 8 and 9, begin a new line double block
indented and insert:
"(I) investment company;".
Page 2, between lines 11 and 12, begin a new line block indented
and insert:
"(4) "Indirect proof of death documents" means any two (2)
of the following:
(A) A notice of probate for the deceased's estate published
in a newspaper.
(B) A document demonstrating that the deceased's funeral
expenses have been paid.
(C) A published obituary for the deceased.".
Page 2, between lines 26 and 27, begin a new line double block
indented and insert:
"(D) A copy of:
(i) the deceased's death certificate;
(ii) a document demonstrating that a court of competent
jurisdiction has issued a finding of death for the
deceased; or
(iii) indirect proof of death documents.".
Page 2, delete lines 27 through 33.
Page 2, line 34, delete "Refrain from requiring:" and insert "Shall
not require:".
Page 3, line 8, delete "thirty (30)" and insert "forty-five (45)".
Page 3, line 12, delete "31 C.F.R." and insert "31 CFR".
Page 3, line 23, delete "thirty (30)" and insert "forty-five (45)".
Page 3, line 24, delete "court:" and insert "court may:".
Page 3, line 25, delete "may".
Page 3, line 28, delete "may".
Page 3, line 30, delete "shall".
Page 3, between lines 33 and 34, begin a new paragraph and insert:
"Sec. 4. A charitable organization may bring an action in court
under section 3(d) of this chapter or file a complaint with the
applicable primary regulator with jurisdiction over a financial
institution or an insurance company if the charitable organization
believes that a financial institution or insurance company is not
complying with this chapter. If a charitable organization files a
complaint, the applicable primary regulator shall investigate the
complaint. The applicable primary regulator may impose a civil
penalty on the financial institution or insurance company in an
amount not less than five hundred dollars ($500) and not more
EH 1081—LS 6476/DI 154 7
than ten thousand dollars ($10,000) per incident.".
Page 3, delete lines 34 through 42.
Delete page 4.
and when so amended that said bill do pass.
(Reference is to HB 1081 as printed January 21, 2025.)
BALDWIN, Chairperson
Committee Vote: Yeas 8, Nays 0.
EH 1081—LS 6476/DI 154