HB 2500
In CommitteeHouse
Transfers to charities
Protecting charitable organizations and ensuring the timely and secure transfer of property designated to them.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill creates new rules to help charities quickly and securely receive assets left to them in life insurance policies, retirement accounts, and other nonprobate instruments—without being asked for unnecessary personal details of their staff or board members. It also protects the privacy of individuals associated with charities and ensures the wishes of people who named charities as beneficiaries are honored.
- Creates a new legal framework—the *Charitable Organizations Privacy Protection Act*—to streamline transfers of property (e.g., life insurance, retirement accounts) to charities named as beneficiaries.
- Requires holders of property (e.g., banks, insurers) to notify charitable beneficiaries in writing within 10 business days of learning of the owner’s death.
- Allows charitable organizations to submit a standardized affidavit (with supporting documents like IRS determination letter and death proof) to claim assets—without needing to open accounts or coordinate with other beneficiaries.
- Prohibits holders from requesting personal identifying information (e.g., Social Security numbers, home addresses, income, background checks) from charity staff or board members.
- Bars holders from imposing conditions like requiring co-beneficiaries to file simultaneously or delaying payments to one charity because others are slow to respond.
- Grants charitable organizations the right to sue in superior court for noncompliance, with potential awards of actual damages, civil penalties ($500–$10,000), and attorney fees.
Who is affected
- Charitable organizations (e.g., nonprofits, churches, schools, hospitals with 501(c)(3) status) — Charitable organizations named as beneficiaries in life insurance policies, retirement accounts, or other nonprobate instruments will have clearer, faster, and more secure access to assets left to them, without being asked for unnecessary personal details of their staff or board members.
- Holders of property (e.g., banks, credit unions, insurance companies, retirement plan trustees) — Financial institutions, insurance companies, retirement plan administrators, and other entities that hold assets subject to beneficiary designations must follow new rules for verifying charitable beneficiaries and limiting information requests.
- Decedents and their estate planners — Individuals who named charities as beneficiaries in their estate plans (e.g., via life insurance or retirement accounts) will have their wishes more reliably fulfilled, with fewer delays or administrative barriers.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
Mandating written notice to charitable beneficiaries within 10 business days of death and allowing a standardized affidavit process significantly reduces delays and administrative barriers that often prevent charities from receiving intended gifts—ensuring that community-serving organizations (e.g., food banks, shelters, schools) can access funds faster to fulfill their missions.
Public SafetyPeopleRef: Sec. 4 & Sec. 5Prohibiting requests for personal identifying information (e.g., SSN, home address, income, background checks) from charity staff or board members protects individual privacy and prevents exploitative or discriminatory vetting—especially important for volunteers, low-income staff, or marginalized communities who may fear surveillance or identity theft.
Rights & LibertiesPeopleRef: Sec. 6(1) & (2)Barring holders from requiring co-beneficiaries to coordinate claims or open accounts reduces power imbalances that disproportionately hurt small charities—many of which lack legal or banking infrastructure to meet such demands—while large institutions already have systems to comply.
Business & EmploymentPeopleRef: Sec. 7(2)Shielding holders acting in good faith from liability for relying on charitable affidavits encourages participation and reduces hesitation—especially among smaller credit unions or regional insurers—while protecting the integrity of transfers to charities.
Business & EmploymentPeopleRef: Sec. 8(2)Granting charities the right to sue for actual damages, civil penalties ($500–$10,000), and attorney fees provides meaningful enforcement leverage—particularly valuable for small nonprofits that otherwise lack resources to challenge institutional resistance, thereby leveling the playing field.
Business & EmploymentPeopleRef: Sec. 9(2)(a), (c), (d)
Potential Concerns (5)
Prohibiting holders of property from requesting personal identifying information (e.g., home addresses, income, background checks) from charity staff or board members enhances privacy and reduces bureaucratic intrusion, but may reduce the ability of financial institutions and insurers to conduct due diligence on organizations claiming assets—potentially increasing fraud risk or enabling misuse of the affidavit process by bad-faith actors.
Rights & LibertiesPeopleRef: Sec. 6(2)Authorizing civil penalties of $500–$10,000 per violation for noncompliant holders (e.g., banks, insurers) increases regulatory risk and compliance costs for financial institutions, especially smaller ones lacking robust beneficiary-processing systems—though the bill explicitly excludes ‘co-beneficiary coordination delays’ as a permissible condition, which may reduce systemic friction.
Business & EmploymentPeopleRef: Sec. 9(2)(c)Requiring IRS Form W-9 (which includes tax ID and financial reporting) for all charitable organizations—even small, local nonprofits without dedicated finance staff—imposes administrative burden and may delay claims for under-resourced charities, especially if they lack access to tax professionals.
Business & EmploymentLean peopleRef: Sec. 5(3)(e)Prohibiting holders from delaying payments to one charity because others are slow to respond improves fairness and predictability for all beneficiaries, but may increase administrative complexity for holders managing multiple claims simultaneously—especially in estates with many co-beneficiaries of mixed types (individuals + charities).
Business & EmploymentRef: Sec. 7(3)Creating a new cause of action in superior court for charitable beneficiaries may increase caseloads in already-burdened state courts, particularly in counties with high volumes of estate-related filings—though the fiscal impact statement estimates minimal cost, enforcement-related legal activity could strain local judicial resources.
Local GovernmentLean peopleRef: Sec. 9(3)
Who Is Most Affected
Small and mid-sized nonprofits (e.g., food banks, community centers, religious congregations) benefit significantly: they gain faster, more secure access to bequeathed assets without invasive vetting—enabling them to redirect resources to direct services rather than legal/administrative battles.
Large national charities (e.g., United Way, Red Cross) benefit moderately: they already have legal teams to navigate complex beneficiary processes, but gain from standardized affidavits and reduced privacy demands—though their scale may mean less relative impact than smaller orgs.
Community banks and credit unions face the highest compliance burden: they lack the technology and legal teams of national banks to easily implement the 10-day notice and affidavit standards, increasing operational costs—though the ban on co-beneficiary coordination may reduce long-term friction.
Insurance companies and retirement plan administrators face new obligations (e.g., 10-day notice, affidavit review), but the standardized process may reduce disputes and litigation over ambiguous claims—net effect likely neutral-to-slightly-negative due to upfront system changes.
Estate planners and decedents benefit: the bill ensures that charitable intent is honored more reliably, reducing the risk that gifts lapse due to administrative delays—especially valuable for donors who want to support local causes without family interference.