Tennessee 2025-2026 Regular Session

Tennessee House Bill HB1013 Compare Versions

Only one version of the bill is available at this time.

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2	2	<BillNo> <Sponsor>
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4	4	HOUSE BILL 1013
5	5	By Shaw
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8	8	HB1013
9	9	002624
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12	12	AN ACT to amend Tennessee Code Annotated, Title 56,
13	13	relative to creditor claims to insurance proceeds.
14	14
15	15	WHEREAS, the Tennessee Supreme Court has repeatedly advised that "each word in a
16	16	statute has a specific purpose and meaning" in cases such as State v. Gevedon, 671 S.W.3d
17	17	537 (Tenn. 2023), Arden v. Kozawa, 466 S.W.3d 758 (Tenn. 2015), Cunningham v. Williamson
18	18	Cnty. Hosp. Dist., 405 S.W.3d 41 (Tenn. 2013), and Lee Med., Inc. v. Beecher, 312 S.W.3d 515
19	19	(Tenn. 2010); and
20	20	WHEREAS, certain members of the Tennessee bar and judiciary have questioned the
21	21	meaning of the phrase "for the benefit of" and, if this conduct continues, retirees will be
22	22	discouraged from moving into Tennessee; and
23	23	WHEREAS, the phrase "for the benefit of" is used to indicate that something is done for
24	24	the advantage of someone or something. In financial and legal contexts, FBO stands for "for
25	25	the benefit of" and is often used in living trust documents or accounts with beneficiary
26	26	designations; and
27	27	WHEREAS, per the Merriam-Webster dictionary, the plain definition of the word
28	28	"beneficiary" is "the person named (as in an insurance policy or annuity) to receive the proceeds
29	29	or benefits"; and
30	30	WHEREAS, the definition of the word "all" has been questioned and restricted by certain
31	31	members of the Tennessee bar and judiciary, despite the clear directive of the Tennessee
32	32	Supreme Court to use the plain meaning of each word in a statute without restriction in
33	33	decisions such as Lind v. Beaman Dodge, Inc., 356 S.W.3d 889 (Tenn. 2011), and if this
34	34	conduct continues, retirees will be discouraged from moving into Tennessee; and
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39	39	WHEREAS, per the Merriam-Webster dictionary, the plain definition of the word "all": as
40	40	an adjective, is "the whole amount, quantity, or extent of; as much as possible; every member or
41	41	individual component of; the whole number or sum of; every, any whatever, completely taken up
42	42	with, given to, or absorbed by"; as a pronoun, is "the whole number, quantity or amount; totality,
43	43	everybody, everything"; and as a noun, is "the whole of one's possessions, resources or
44	44	energy"; and
45	45	WHEREAS, Black's Law Dictionary defines "all" as "the whole of – used with a singular
46	46	noun or pronoun, and referring to the amount, quantity, extent, duration, quality or degree. The
47	47	whole number or sum of – used collectively, with a plural noun or pronoun expressing an
48	48	aggregate. Every member of an individual of (sic) individual component of; each one of – used
49	49	with a plural noun. In this sense, all is used generically and distributively (sic). 'All' refers rather
50	50	to the aggregate under which the individuals are subsumed than to the individuals themselves.";
51	51	and
52	52	WHEREAS, Tennessee Code Annotated, Section 56-7-203, was introduced in 1925 and
53	53	last modified in 1932, prior to the introduction of the "Personal Property Owner's Rights and
54	54	Garnishment Act of 1978", compiled in Tennessee Code Annotated, Title 26, Chapter 2, Part 1;
55	55	and
56	56	WHEREAS, these questions bring uncertainty to Tennesseans trying to plan for
57	57	retirement and may be a deciding factor among those seeking retirement in the Southeast when
58	58	choosing a state to which to retire; now, therefore,
59	59	BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
60	60	SECTION 1. Tennessee Code Annotated, Section 56-7-203, is amended by deleting the
61	61	section and substituting:
62	62	(a) As used in this section, "for the benefit of" includes the beneficiary of the
63	63	insurance policy or annuity.
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68	68	(b) The net amount payable under any policy of life insurance or under any
69	69	annuity contract upon the life of any person made for the benefit of, or assigned to, the
70	70	spouse or children, or dependent relatives of the persons, is exempt from all claims of
71	71	the creditors, including execution, attachment, seizure, and garnishment, of the person
72	72	arising out of or based upon any obligation created after January 1, 1932, whether or not
73	73	the right to change the named beneficiary is reserved by or permitted to that person.
74	74	Use of exempt funds does not change the classification of the funds used from exempt
75	75	to nonexempt.
76	76	SECTION 2. This act takes effect July 1, 2025, the public welfare requiring it.