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~tate of \!tennessee
PUBLIC CHAPTER NO. 101
HOUSE BILL NO. 817
By Representatives Garrett, Farmer
Substituted for: Senate Bill No. 534
By Senator Stevens
AN ACT to amend Tennessee Code Annotated, Title 30 and Title 35, relative to trusts.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1.. Tennessee Code Annotated, Section 30-1-404(b), is amended by deleting
the language "Should any person entitled to serve as trustee" and substituting "Should any
, person entitled to serve or currently serving as trustee", and by deleting the language ",
provided that the then market value of the trust estate does not exceed one hundred thousand
dollars ($100, 000)".
SECTION 2. Tennessee Code Annotated, Section 30-1-404(b)(2), is amended by
deleting the subdivision and substituting:
(2) The instrument does not contain provisions for the appointment of a
successor or substitute, or such provision is unable to be implemented, and the then
serving trustee does not, or an adult income beneficiary or vested remainderman do not
petition for the appointment of a successor or substitute trustee within three (3) months
after there is a vacancy in office or all sooner waive this right; or
SECTION 3. Tennessee Code Annotated, Section 35-15-104(a), is amended by adding
the following new subdivision:
(4) Has reason to know of it because the fact is accessible by the person through
electronic means, such person provided consent to receive information by electronic
means in a record, as defined in§ 47-10-102, and such consent has not been revoked.
Such information is deemed to be accessible by the person through electronic means if
the information was available through electronic means for at least sixty (60) days and if:
(A) The means of electronic access were provided in the record; or
(B) It can be shown that the electronic access was actually utilized at any
time.
SECTION 4. Tennessee Code Annotated, Section 35-15-109(a), is amended by deleting
the subsection and substituting:
(a)
(1) Notice to a person under this chapter or the sending of a document to
a person under this chapter must be accomplished in a manner reasonably
suitable under the circumstances and likely to result in receipt of the notice or
document.
(2) Permissible methods of notice or for sending a document include:
(A) First-class mail;
(B) Personal delivery;
(C) Delivery to the person's last known place of residence or place
of business; HB817
(D) A properly directed electronic message; or
(E) Providing the notice or document through electronic means
when such person provided consent to receive information by electronic
means in a record, as defined in § 47-10-102, and such consent has not
been revoked. A notice or document is deemed to be accessible by the
person through electronic means if:
(i) The means of electronic access were provided in the
record; or
(ii) It can be shown that the electronic access was actually
utilized at any time.
SECTION 5. Tennessee Code Annotated, Section 35-15-301, is amended by adding the
following new subsection:
(e) Notice, information, accountings, or reports given to a person who may
represent and bind another person under this chapter may serve as a substitute for and
have the same effect as providing notice, information, accountings, or reports directly to
the person being represented.
SECTION 6. Tennessee Code Annotated, Section 35-15-402(d), is amended by deleting
the word "and" immediately following the semicolon at the end of subdivision (1 ), by deleting the
language "describing the asset with particularity in the trust instrument." from subdivision (2)
and substituting "describing the asset; and", and by adding the following new subdivision:
(3)
(A) Tangible personal property other than money, an evidence of
indebtedness, a document of title, a security, and property used in a trade or
business may be assigned to a trust, either during the grantor's life or after the
grantor's death, by delivery of a written instrument that:
(i) Is signed by the transferor;
(ii) Identifies the tangible personal property in general terms; and
(iii) Specifically identifies the trust.
(B) Subdivision ( d)(3)(A) applies to such tangible personal property that is
owned when such written instrument is signed, and to property that is
subsequently acquired by the transferor. Moreover, such assignment is subject to
revocation or amendment pursuant to a written instrument delivered by the
transferor to the trustee, either during the transferor's life or following the
transferor's death, including pursuant to the terms of the transferor's last will and
testament. If such revocation or amendment is not delivered to the trustee within
six (6) months of transferor's death, then the trustee may presume that such
revocation or amendment does not exist.
SECTION 7. Tennessee Code Annotated, Section 35-15-709(b), is amended by deleting
the subsection and substituting:
(b) An advance, either by the trustee, trust advisor, or trust protector or by a
person named in§ 35-15-701(c)(1), of money gives rise to a lien against trust property to
secure reimbursement with reasonable interest. Failure to pay to or reimburse a trustee
for expenses incurred pursuant to subsection (a) gives rise to a lien against all trust
property for the payment of all sums due or to become due for services, expenses,
advances, and the costs and expenses of enforcing such payment or reimbursement.
SECTION 8. Tennessee Code Annotated, Title 35, Chapter 15, Part 8, is amended by
adding the following as a new section:
2 HB817
(a) Unless the terms of a trust instrument expressly provide that a settler shall not
be reimbursed by a trust for the settler's personal income tax liability attributable to the
trust, if the settler of a trust is treated under 26 U.S.C. § 671 et seq. as the owner of all
or part of the trust, then a disinterested trustee, in the disinterested trustee's sole
discretion, or another trustee at the direction of a trust advisor or trust protector who
would be treated as a disinterested trustee and otherwise has the power to direct
discretionary distributions under the trust instrument, may reimburse the settler for any
amount of the settler's personal federal, state, local, foreign, or other income tax liability
that is attributable to the inclusion of the trust's income, capital gains, deductions, and
credits in the calculation of the settler's taxable income under principals of 26 U.S.C. §
671 et seq. The trustee may pay such amount to the settler directly, or may pay the
amount to an appropriate taxing authority on the settler's behalf, as the trustee
determines in the trustee's sole discretion. This power shall in all cases be exercised in
the sole and absolute discretion of a disinterested trustee or trust advisor or protector
who would be treated as a disinterested trustee, and no settler or other person may
compel the exercise of this power or enter into an express or implied agreement or
understanding regarding the exercise of such power. No policy of insurance on the
settler's life held in the trust nor the cash value of any such policy, nor the proceeds of
any loan secured by an interest in the policy may be used to reimburse the settler or to
pay an appropriate taxing authority on the settler's behalf. Neither the trustee's power to
make payments to, or for the benefit of, the settler under this section, nor the trustee's
decision to exercise such power in favor of the settler, causes the settler to be treated as
a beneficiary of the trust for any purpose.
(b) This section does not apply if the application of this section would disqualify a
trust for, or reduce the amount of, a marital deduction, a charitable deduction, or another
specific tax benefit otherwise available to any person for state or federal income, gift,
estate, or generation-skipping transfer tax purposes.
(c) The power described in this section becomes exercisable on and after
December 31, 2025, and applies to trusts existing before, on, and after such date.
(d) The person otherwise having the power to exercise the discretion described
in this section may at any time renounce the power in writing and, unless otherwise
limited, such renouncement applies permanently with respect to the trust as a whole,
such that a person does not have this power with respect to the trust at any time after
the renunciation.
( e) A person is not liable for exercising or failing to exercise the power described
in this section, or for exercising or failing to exercise the ability to renounce such power.
SECTION 9. Tennessee Code Annotated, Section 35-15-1005, is amended by adding
the following new subsection:
(f) For purposes of this section, a person is deemed to have actual knowledge of
information that is accessible by the person through electronic means if the person
provided consent to receive information by electronic means in a record, as defined in §
47-10-102, and such consent has not been revoked. The information is deemed to be
accessible by the person if:
(1) The means of electronic access were provided in the record; or
(2) It can be shown that the electronic access was actually utilized at any
time.
SECTION 10. Tennessee Code Annotated, Section 35-15-1102, is amended by deleting
the last sentence and substituting "However, the execution of an inter vivas trust instrument, a
document to transfer an asset to or from a trust, or a consent, release, ratification, modification,
termination, or settlement agreement pursuant to § 35-15-109, § 35-15-111, § 35-15-411, or§
35-15-412 is considered a transaction for purposes of§ 47-10-103.".
SECTION 11. Tennessee Code Annotated, Section 35-15-1202, is amended by deleting
the section and substituting:
3 HB817
(a) A trust advisor or trust protector, other than a beneficiary, is a fiduciary with
respect to each power granted to such trust advisor or trust protector. In exercising a
power or refraining from exercising a power, a trust advisor or trust protector acting as a
fiduciary shall act in good faith and in accordance with the terms and purposes of the
trust and the interests of the beneficiaries.
(b) A trust advisor or trust protector is an excluded fiduciary, regardless of
whether the trust advisor or trust protector is serving in a fiduciary capacity, with respect
to each power granted or reserved exclusively to any one (1) or more other trustees,
trust advisors, or trust protectors.
(c) Notwithstanding subsection (a), a trust advisor or trust protector may serve in
a nonfiduciary capacity when specifically appointed in such capacity, and when acting in
such capacity is liable only for acting in bad faith or with reckless indifference.
SECTION 12. The Tennessee Code Commission is requested to publish in Tennessee
Code Annotated the revisions required to conform to the current state of the law the official
comments for Chapter 1 of Title 30 and Chapter 15 of Title 35 that are filed with the executive
secretary of the Tennessee Code Commission by May 19, 2025, by duly authorized
representatives of the Trust Committee of the Tennessee Bankers Association.
SECTION 13. This act takes effect July 1, 2025, the public welfare requiring it.
4 HOUSE BILL NO. 817
PASSED: March 10, 2025
Q
CAMERON S'="TON, SPEAKER
HOUSE OF REPRESENTATIVES
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RANDYMCt
SPEAKER OF THE SENATE
APPROVED this Bi?fl: day of (Y)QY~ 2025
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BILL LEE, GOVERNOR