35-1-101. [Repealed.]

Compiler's Notes. Former chapter 1, §§ 35-1-101 — 35-1-120 (Code 1858, §§ 3648-3664 (deriv. Acts, 1831, ch. 107, §§ 1, 2; 1845-1846, ch. 194, § 2; 1853-1854, ch. 74, § 1; 1855-1856, ch. 113, §§ 11, 15); Acts 1859-1860, ch. 34, § 1; Act Jan. 14, 1868, §§ 1, 2 (published in Acts 1868-1869, p. 80); Acts 1917, ch. 137, §§ 1-3; Shan., §§ 3530a1-3530a3, 5414-5432; Code 1932, §§ 9573-9595; modified; Code Supp. 1950, § 9593; T.C.A. (orig. ed.), §§ 35-101 — 35-122), concerning appointment and removal of trustees, was repealed by Acts 1986, ch. 566, § 1.

35-1-102. [Repealed.]

Compiler's Notes. Former § 35-1-102 (Acts 1986, ch. 566, § 1; 1995, ch. 351, § 1), concerning the venue, was repealed by Acts 2004, ch. 537, § 97, effective July 1, 2004.

35-1-103. [Repealed.]

Compiler's Notes. Former § 35-1-103 (Acts 1986, ch. 566, § 1), concerning trustees and successor trustees, appointment by court, accounting, bonds, was repealed by Acts 2004, ch. 537, § 97, effective July 1, 2004.

35-1-104. [Repealed.]

Compiler's Notes. Former § 35-1-104 (Acts 1986, ch. 566, § 1), concerning the successor trustees, their appointment by petition and multiple trustees, was repealed by Acts 2004, ch. 537, § 97, effective July 1, 2004.

35-1-105. [Repealed.]

Compiler's Notes. Former § 35-1-105 (Acts 1986, ch. 566, § 1), concerning the resignation of trustees, was repealed by Acts 2004, ch. 537, § 97, effective July 1, 2004.

35-1-106. [Repealed.]

Compiler's Notes. Former § 35-1-106 (Acts 1986, ch. 566, § 1; 2002, ch. 735, §§ 10-12), concerning the removal of trustees, was repealed by Acts 2004, ch. 537, § 97, effective July 1, 2004.

35-1-107. [Repealed.]

Compiler's Notes. Former § 35-1-107 (Acts 1986, ch. 566, § 1), concerning the examination of accounts and deficiencies, was repealed by Acts 2004, ch. 537, § 97, effective July 1, 2004.

35-1-108. [Repealed.]

Compiler's Notes. Former § 35-1-108 (Acts 1986, ch. 566, § 1), concerning the acceptance and finality of resignation or removal and divesting and vesting of title, was repealed by Acts 2004, ch. 537, § 97, effective July 1, 2004.

35-1-109. [Repealed.]

Compiler's Notes. Former § 35-1-109 (Acts 1986, ch. 566, § 1), concerning bond instead of removal, was repealed by Acts 2004, ch. 537, § 97, effective July 1, 2004.

35-1-110. [Repealed.]

Compiler's Notes. Former § 35-1-110 (Acts 1986, ch. 566, § 1), concerning the liability of new trustee, was repealed by Acts 2004, ch. 537, § 97, effective July 1, 2004.

35-1-111. Real property — Documents to be recorded — Trust property.

1. When real estate is held as a part of the trust property, the court order accepting the resignation or ordering the removal of a trustee and appointing a successor, or an acknowledged memorandum of the order, shall be recorded in the county where any real estate is located, identifying each parcel of real estate held by the trust.
2. 1. When real estate is held as part of the trust property and a trustee has resigned or been removed without order of a court, the resigning or removed trustee shall execute and record an instrument that:
      1. Recites the resignation or removal of the trustee;
      2. Gives the name and address of the successor trustee, if any; and
      3. Identifies each parcel of real estate held by the trust.
   2. A successor trustee, or a remaining trustee if there is no successor, shall execute and record the instrument described in subdivision (b)(1) if the resigning or removed trustee fails to record the required instrument within thirty (30) days after resigning or being removed.

Acts 1986, ch. 566, § 1; 1992, ch. 951, § 11.

Compiler's Notes. Former chapter 1, §§ 35-1-101 — 35-1-120 (Code 1858, §§ 3648-3664 (deriv. Acts, 1831, ch. 107, §§ 1, 2; 1845-1846, ch. 194, § 2; 1853-1854, ch. 74, § 1; 1855-1856, ch. 113, §§ 11, 15); Acts 1859-1860, ch. 34, § 1; Act Jan. 14, 1868, §§ 1, 2 (published in Acts 1868-1869, p. 80); Acts 1917, ch. 137, §§ 1-3; Shan., §§ 3530a1-3530a3, 5414-5432; Code 1932, §§ 9573-9595; modified; Code Supp. 1950, § 9593; T.C.A. (orig. ed.), §§ 35-101 — 35-122), concerning appointment and removal of trustees, was repealed by Acts 1986, ch. 566, § 1.

Textbooks. Tennessee Jurisprudence, 24 Tenn. Juris., Trusts and Trustees, §§ 43, 45.

35-1-112. [Repealed.]

Compiler's Notes. Former §§ 35-1-101 – 35-1-110 and 35-1-112 — 35-1-114 (Acts 1986, ch. 566, § 1; 1988, ch. 854, § 12; 1995, ch. 351, § 1; 1995, ch. 352, § 1; 2002, ch. 735, §§ 10-12), concerning the appointment and removal of trustees, was repealed by Acts 2004, ch. 537, § 97, effective July 1, 2004

35-1-113. [Repealed.]

Compiler's Notes. Former §§ 35-1-101 – 35-1-110 and 35-1-112 — 35-1-114 (Acts 1986, ch. 566, § 1; 1988, ch. 854, § 12; 1995, ch. 351, § 1; 1995, ch. 352, § 1; 2002, ch. 735, §§ 10-12), concerning the appointment and removal of trustees, was repealed by Acts 2004, ch. 537, § 97, effective July 1, 2004

Acts 2004, ch. 866, § 6, purported to amend § 35-1-113; however, that section was repealed by Acts 2004, ch. 537.

35-1-114. [Repealed.]

Compiler's Notes. Former §§ 35-1-101 – 35-1-110 and 35-1-112 — 35-1-114 (Acts 1986, ch. 566, § 1; 1988, ch. 854, § 12; 1995, ch. 351, § 1; 1995, ch. 352, § 1; 2002, ch. 735, §§ 10-12), concerning the appointment and removal of trustees, was repealed by Acts 2004, ch. 537, § 97, effective July 1, 2004

35-1-115 — 35-1-120. [Repealed.]

Compiler's Notes. Former chapter 1, §§ 35-1-101 — 35-1-120 (Code 1858, §§ 3648-3664 (deriv. Acts, 1831, ch. 107, §§ 1, 2; 1845-1846, ch. 194, § 2; 1853-1854, ch. 74, § 1; 1855-1856, ch. 113, §§ 11, 15); Acts 1859-1860, ch. 34, § 1; Act Jan. 14, 1868, §§ 1, 2 (published in Acts 1868-1869, p. 80); Acts 1917, ch. 137, §§ 1-3; Shan., §§ 3530a1-3530a3, 5414-5432; Code 1932, §§ 9573-9595; modified; Code Supp. 1950, § 9593; T.C.A. (orig. ed.), §§ 35-101 — 35-122), concerning appointment and removal of trustees, was repealed by Acts 1986, ch. 566, § 1.

35-1-121. Appointment of public trustee.

In addition to the other provisions for the appointment of trustees in this chapter, a public trustee may be appointed by the court pursuant to title 30, chapter 1, part 4.

Acts 1987, ch. 322, § 19.

35-1-122. [Repealed.]

Compiler's Notes. Former § 35-1-122 (Acts 1997, ch. 354, § 1), concerning the change of situs of trust and venues, was repealed by Acts 2004, ch. 537, § 97, effective July 1, 2004.

35-2-101. Short title.

This chapter shall be known and may be cited as the “Uniform Fiduciaries Act.”

Acts 1953, ch. 82, § 14 (Williams, § 9596.31); T.C.A. (orig. ed.), § 35-201.

Cross-References. Bonds of fiduciaries, §§ 8-19-307, 35-50-111.

Textbooks. Pritchard on Wills and Administration of Estates (5th ed., Phillips and Robinson), §§ 737, 740.

Law Reviews.

Some Aspects of Estate Planning in Tennessee (Alec Brock Stevenson), 2 Vand. L. Rev. 265 (1949).

Symposium: The Role of Federal Law in Private Wealth Transfer: A Fresh Look at State Asset Protection Trust Statutes, 67 Vand. L. Rev. 1741 (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer: Comment, Federalizing Principles of Donative Intent and Unanticipated Circumstances, 67 Vand. L. Rev. 1931 (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer: Comment, Is Federalization of Charity Law All Bad? What States Can Learn from the Internal Revenue Code, 67 Vand. L. Rev. 1621 (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer: Comment, Pro and Con (Law): Considering the Irrevocable Nongrantor Trust Technique, 67 Vand. L. Rev. 1999 (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer: Comment, The Stored Communications Act and Digital Assets, 67 Vand. L. Rev. 1729 (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer: Destructive Federal Preemption of State Wealth Transfer Law in Beneficiary Designation Cases: Hillman Doubles Down on Egelhoff, 67 Vand. L. Rev. 1665 (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer: Disclaimers and Federalism, 67 Vand. L. Rev. 1871 (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer: Federal Visions of Private Family Support, 67 Vand. L. Rev. 1835 (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer: In Search of the Probate Exception, 67 Vand. L. Rev. 1533 (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer:  Introduction, 67 Vand. L. Rev. 1531 (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer: Probate Law Meets the Digital Age, 67 Vand. L. Rev. 1697 (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer: Strange Bedfellows: The Federal Constitution, Out-of-State Nongrantor Accumulation Trusts, and the Complete Avoidance of State Income Taxation, 67 Vand. L. Rev. 1945 (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer: The Creeping Federalization of Wealth-Transfer Law, 67 Vand. L. Rev. 1635  (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer: Unconstitutional Perpetual Trusts, 67 Vand. L. Rev. 1769 (2014).

Collateral References.

Enforceability of contractual right, in which fiduciary has interest, to purchase property of estate or trust. 6 A.L.R.4th 786.

Payment or distribution under invalid instruction as breach of trustee's duty. 6 A.L.R.4th 1196.

Uniform Fiduciaries Act, construction and application of provisions of, affecting rights and obligations arising from payment of personal obligations with trust funds. 114 A.L.R. 1088.

35-2-102. Chapter definitions.

1. In this chapter, unless the context otherwise requires:
   1. “Bank” includes any person or association of persons, whether incorporated or not, carrying on the business of banking;
   2. “Fiduciary” includes a trustee under any trust, expressed, implied, resulting or constructive, executor, administrator, personal representative, guardian, conservator, curator, receiver, trustee in bankruptcy, assignee for the benefit of creditors, partner, agent, officer of a corporation, public or private, public officer, or any other person acting in a fiduciary capacity for any person, trust or estate;
   3. “Person” includes a corporation, partnership, or other association, or two (2) or more persons having a joint or common interest;
   4. “Principal” includes any person to whom a fiduciary as such owes an obligation; and
   5. “Savings institution” includes a federal or state savings and loan association or savings bank.
2. A thing is done “in good faith,” within the meaning of this chapter, when it is in fact done honestly, whether it is done negligently or not.

Acts 1953, ch. 82, § 1 (Williams, § 9596.18); T.C.A. (orig. ed.), § 35-202; Acts 1985, ch. 167, § 1; 1988, ch. 854, § 13.

Law Reviews.

Ethics — Petty v. Privette: Exclusion of Attorney Liability in the Area of Estate Administration, 23 Mem. St. U.L. Rev. 687 (1993).

35-2-103. Application of payments made to fiduciaries — Validity of right or title acquired.

A person who in good faith pays or transfers to a fiduciary any money or other property, which the fiduciary as such is authorized to receive, is not responsible for the proper application thereof by the fiduciary, and any right or title acquired from the fiduciary in consideration of such payment or transfer is not invalid in consequence of a misapplication by the fiduciary.

Acts 1953, ch. 82, § 2 (Williams, § 9596.19); T.C.A. (orig. ed.), § 35-203.

35-2-104. Transfer of negotiable instrument by fiduciary.

If any negotiable instrument payable or endorsed to a fiduciary as such is endorsed by the fiduciary, or if any negotiable instrument payable or endorsed to the principal is endorsed by a fiduciary empowered to endorse such instrument on behalf of the principal, the endorsee is not bound to inquire whether the fiduciary is committing a breach of the fiduciary's obligation as fiduciary in endorsing or delivering the instrument, and is not chargeable with notice that the fiduciary is committing a breach of the obligation as fiduciary unless the endorsee takes the instrument with actual knowledge of such breach or with knowledge of such facts that the action in taking the instrument amounts to bad faith. If, however, such instrument is transferred by the fiduciary in payment of or as security for a personal debt of the fiduciary to the actual knowledge of the creditor, or is transferred in any transaction known by the transferee to be for the personal benefit of the fiduciary, the creditor or other transferee is liable to the principal if the fiduciary in fact commits a breach of the obligation as fiduciary in transferring the instrument.

Acts 1953, ch. 82, § 4 (Williams, § 9596.21); T.C.A. (orig. ed.), § 35-205.

35-2-105. Check drawn by fiduciary payable to third person.

If a check or other bill of exchange is drawn by a fiduciary as such, or in the name of the principal by a fiduciary empowered to draw such instrument in the name of the principal, the payee is not bound to inquire whether the fiduciary is committing a breach of the fiduciary's obligation as fiduciary in drawing or delivering the instrument, and is not chargeable with notice that the fiduciary is committing a breach of the obligation as fiduciary unless the payee takes the instrument with actual knowledge of such breach or with knowledge of such facts that the action in taking the instrument amounts to bad faith. If, however, such instrument is payable to a personal creditor of the fiduciary and delivered to the creditor in payment of or as security for a personal debt of the fiduciary to the actual knowledge of the creditor, or is drawn and delivered in any transaction known by the payee to be for the personal benefit of the fiduciary, the creditor or other payee is liable to the principal if the fiduciary in fact commits a breach of the obligation as fiduciary in drawing or delivering the instrument.

Acts 1953, ch. 82, § 5 (Williams, § 9596.22); T.C.A. (orig. ed.), § 35-206.

35-2-106. Check drawn by and payable to fiduciary — Uniform Veterans' Guardianship Act unaffected.

1. If a check or other bill of exchange is drawn by a fiduciary as such or in the name of the principal by a fiduciary empowered to draw such instrument in the name of the principal, payable to the fiduciary personally, or payable to a third person and by the third person transferred to the fiduciary, and is thereafter transferred by the fiduciary, whether in payment of a personal debt of the fiduciary or otherwise, the transferee is not bound to inquire whether the fiduciary is committing a breach of the fiduciary's obligation as fiduciary in transferring the instrument, and is not chargeable with notice that the fiduciary is committing a breach of the obligation as fiduciary unless the transferee takes the instrument with actual knowledge of such breach or with knowledge of such facts that the action in taking the instrument amounts to bad faith, except and provided that title 34, chapter 5, being the Uniform Veterans' Guardianship Act, is not by this chapter amended.
2. This chapter shall not apply in any situation governed by the Uniform Veterans' Guardianship Act.

Acts 1953, ch. 82, § 6 (Williams, § 9596.23); T.C.A. (orig. ed.), § 35-207.

35-2-107. Deposit in name of fiduciary as such — Drawing check.

If a deposit is made in a bank or savings institution to the credit of a fiduciary as such, the bank or savings institution is authorized to pay the amount of the deposit or any part thereof upon the check of the fiduciary, signed with the name in which such deposit is entered, without being liable to the principal, unless the bank or savings institution pays the check with actual knowledge that the fiduciary is committing a breach of the fiduciary's obligation as fiduciary in drawing the check or with knowledge of such facts that its action in paying the check amounts to bad faith. If, however, such a check is payable to the drawee bank or savings institution and is delivered to it in payment of or as security for a personal debt of the fiduciary to it, the bank or savings institution is liable to the principal if the fiduciary in fact commits a breach of the obligation as fiduciary in drawing or delivering the check except as provided in § 35-2-106.

Acts 1953, ch. 82, § 7 (Williams, § 9596.24); T.C.A. (orig. ed.), § 35-208; Acts 1985, ch. 167, § 2.

35-2-108. Deposit in name of principal — Drawing checks.

If a check is drawn upon the account of the principal in a bank or savings institution by a fiduciary who is empowered to draw checks upon the principal's account, the bank or savings institution is authorized to pay such check without being liable to the principal, unless the bank or savings institution pays the check with actual knowledge that the fiduciary is committing a breach of the fiduciary's obligation as fiduciary in drawing such check, or with knowledge of such facts that its action in paying the check amounts to bad faith. If, however, such a check is payable to the drawee bank or savings institution and is delivered to it in payment of or as security for a personal debt of the fiduciary to it, the bank or savings institution is liable to the principal if the fiduciary in fact commits a breach of the obligation as fiduciary in drawing or delivering the check.

Acts 1953, ch. 82, § 8 (Williams, § 9596.25); T.C.A. (orig. ed.), § 35-209; Acts 1985, ch. 167, § 2.

35-2-109. Deposit in fiduciary's personal account — Drawing checks.

If a fiduciary makes a deposit in a bank or savings institution to the fiduciary's personal credit of checks drawn by the fiduciary upon an account in the fiduciary's own name as fiduciary, or of checks payable to the fiduciary as fiduciary, or of checks drawn by the fiduciary upon an account in the name of the principal if the fiduciary is empowered to draw checks thereon, or of checks payable to the principal and endorsed by the fiduciary, if the fiduciary is empowered to endorse such checks, or if the fiduciary otherwise makes a deposit of funds held by the fiduciary as fiduciary, the bank or savings institution receiving such deposit is not bound to inquire whether the fiduciary is committing thereby a breach of the obligation as fiduciary. The bank or savings institution is authorized to pay the amount of the deposit or any part thereof upon the personal check of the fiduciary without being liable to the principal unless the bank or savings institution receives the deposit or pays the check with actual knowledge that the fiduciary is committing a breach of the obligation as fiduciary in making such deposit or in drawing such check or with knowledge of such facts that its action in receiving the deposit or paying the check amounts to bad faith.

Acts 1953, ch. 82, § 9 (Williams, § 9596.26); T.C.A. (orig. ed.), § 35-210; Acts 1985, ch. 167, § 2.

35-2-110. Deposit in names of two or more trustees — Drawing checks.

When a deposit is made in a bank or savings institution in the name of two (2) or more persons as fiduciaries and a check is drawn upon the fiduciary account by any fiduciary or fiduciaries authorized by the other fiduciary or fiduciaries to draw checks upon the fiduciary account, neither the payee nor other holder nor the bank or savings institution is bound to inquire whether it is a breach of trust to authorize such fiduciary or fiduciaries to draw checks upon the fiduciary account, and is not liable unless the circumstances be such that the action of the payee or other holder or the bank or savings institution amounts to bad faith.

Acts 1953, ch. 82, § 10 (Williams, § 9596.27); T.C.A. (orig. ed.), § 35-211; Acts 1985, ch. 167, § 2; 1988, ch. 854, § 14.

35-2-111. Applicability of chapter — Cases not provided for.

1. This chapter is applicable to state and federal savings and loan associations and savings banks. In the event of a conflict between this chapter and a law on the same subject relating specifically to state or federal savings and loan associations or savings banks, the specific law shall be controlling.
2. In any case not provided for in this chapter, the rules of law and equity, including the law merchant and those rules of law and equity relating to trusts, agency, negotiable instruments and banking, shall continue to apply.
3. 1. Knowledge on the part of the bank or savings institution of the existence of a fiduciary relationship or the terms of the relationship shall not impose any duty or liability on the bank or savings institution for any action of the fiduciary.
   2. A bank or savings institution has no duty to establish an account for a fiduciary or to limit transactions in an account so established unless, in its discretion, it contracts in writing with the fiduciary to establish or limit transactions with respect to such an account; provided, that this shall not preclude a court from temporarily enjoining or restraining the removal of funds from an existing account by a bank or savings institution over which the court exercises personal jurisdiction.

Acts 1953, ch. 82, § 12 (Williams, § 9596.29); T.C.A. (orig. ed.), § 35-213; Acts 1985, ch. 168, § 1; 1993, ch. 175, § 1.

35-2-112. Uniformity of interpretation.

This chapter shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it.

Acts 1953, ch. 82, § 13 (Williams, § 9596.30); T.C.A. (orig. ed.), § 35-214.

35-3-101. Authority of court.

The court is authorized to have the money and funds in the hands of clerks and receivers, or trustees, in litigation or under the control of the court, invested under such rules and orders in each case as may be legal and just.

Acts 1865, ch. 19, § 1; Shan., § 5433; mod. Code 1932, § 9592; T.C.A. (orig. ed.), § 35-301.

Cross-References. Investment of funds of minors and incompetents, § 18-5-105.

Textbooks. Pritchard on Wills and Administration of Estates (5th ed., Phillips and Robinson), § 737.

Tennessee Jurisprudence, 12 Tenn. Juris., Executors and Administrators, § 21; 14 Tenn. Juris., Guardian and Ward, §§ 8, 9; 24 Tenn. Juris., Trusts and Trustees, § 58.

Law Reviews.

Symposium: The Role of Federal Law in Private Wealth Transfer: A Fresh Look at State Asset Protection Trust Statutes, 67 Vand. L. Rev. 1741 (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer: Unconstitutional Perpetual Trusts, 67 Vand. L. Rev. 1769 (2014).

35-3-102. Authorized investments.

All trustees, guardians and other fiduciaries in this state, unless prohibited, or another mode of investment is prescribed by the will or deed of the testator or other person establishing the trust, may invest all funds in their hands in securities specified in §§ 35-3-103 — 35-3-111, and may also invest funds in income-producing commercial or residential property.

Acts 1931, ch. 100, § 1; C. Supp. 1950, § 9596.1; modified; T.C.A. (orig. ed.), § 35-302; Acts 2016, ch. 640, § 3.

Amendments. The 2016 amendment added “, and may also invest funds in income-producing commercial or residential property.” at the end.

Effective Dates. Acts 2016, ch. 640, § 4. March 23, 2016.

Law Reviews.

Non-Tax Aspects of Estate Planning (Ronald Lee Gilman), 2 Mem. St. U.L. Rev. 41 (1972).

35-3-103. Federal and state securities.

1. Investments may be made in bonds, notes and stock of the United States and any state and territory of the United States.
2. In the absence of an express provision to the contrary, if an indenture or other governing instrument directs, requires, authorizes or permits investment in United States government obligations, a bank, trust company, trust department or other fiduciary may invest in the obligations, either directly or in the form of securities or other interests in any open end or closed end management type investment company or investment trust registered under the federal Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.), if the portfolio of the investment company or investment trust is limited to United States government obligations and to repurchase agreements fully collateralized by the obligations and if the investment company or investment trust actually takes delivery of the collateral, either directly or through an authorized custodian.

Acts 1931, ch. 100, § 1(a); C. Supp. 1950, § 9596.1(A); modified; T.C.A. (orig. ed.), § 35-303; Acts 1987, ch. 89, § 1; 2008, ch. 672, § 1.

Cross-References. See notes to § 35-3-102.

35-3-104. Securities of foreign governments.

Investments may be made in bonds, notes and stock issued or guaranteed by any foreign government with which the United States is at the time of sale or offer of sale of the bonds, notes or stock maintaining diplomatic relations and which foreign government has not, for at least thirty (30) years prior to the making of the investment, defaulted for more than thirty (30) days in the payment of any part either of principal or interest of any bond, note, stock or other evidence of indebtedness issued by it; provided, that if the foreign government has not been in existence for as much as thirty (30) years, but has been in existence for not less than ten (10) years, then the investment may be made in securities issued or guaranteed by it, if it has not defaulted in the payment of any part either of principal or interest of any bond, note, stock or other evidence of indebtedness issued by it since it has been in existence.

Acts 1931, ch. 100, § 1(b); C. Supp. 1950, § 9596.1(B); modified; T.C.A. (orig. ed.), § 35-304.

Cross-References. See notes to § 35-3-102.

35-3-105. Bonds of counties.

1. Investments may be made in bonds of any county in the state and bonds of any city or town in the state having a population of not less than two thousand (2,000) by the last federal census preceding the investment, regardless of whether the bonds are payable from taxes levied on property in the county, city or town, or are payable solely from revenues of the waterworks system, electric distribution system or both owned and operated by the issuing county, city or town, or are payable from both taxes and revenues; provided, that the county, city or town has not defaulted within fifteen (15) years preceding the investment, for more than ninety (90) days, in the payment of any part of either principal or interest on any bond, note or other evidence of valid indebtedness.
2. Before any funds may be invested in bonds payable solely from waterworks, electric revenue or both, there shall be furnished with the bonds a certified copy of an operating statement issued by the official in charge of the operations of the waterworks or electric distribution systems, showing that the net revenue from the system or systems pledged to and available for the principal of and interest on all outstanding bonds payable from that revenue, covering a period of twelve (12) consecutive months out of the fifteen (15) months preceding the investment, have been at least one and one-third (11/3) times the highest combined principal and interest requirements for any one (1) year on all bonds then outstanding that are payable from the pledged revenues of the system or systems.
3. “Net revenue” means total revenue less operating expenses incurred in connection with the operation of the system or systems.

Acts 1931, ch. 100, § 1(c); 1939, ch. 143, § 1; 1949, ch. 275, § 1; C. Supp. 1950, § 9596.1(C); modified; T.C.A. (orig. ed.), § 35-305.

Compiler's Notes. For table of population of Tennessee municipalities, and for U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Cross-References. See notes to § 35-3-102.

35-3-106. Municipal bonds.

Investments may be made in bonds and notes of any county, city or town in any state or territory of the United States that has a population, as shown by the last federal census next preceding the investment, of not less than forty-five thousand (45,000) and has not defaulted within twenty-five (25) years next preceding the investment, for more than thirty (30) days, in the payment of any part of either principal or interest of any bond, note or other evidence of indebtedness.

Acts 1931, ch. 100, § 1(e); C. Supp. 1950, § 9596.1(D); modified; T.C.A. (orig. ed.), § 35-306.

Compiler's Notes. For table of population of Tennessee municipalities, and for U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Cross-References. See notes to § 35-3-102.

35-3-107. Real estate bonds and notes.

Investments may be made in bonds and notes secured by first mortgage or deed of trust on real estate located in this state; provided, that:

1. The face or principal amount of the bonds or notes does not exceed one half (½) the actual value of the real estate as appraised by one (1) or more licensed real estate dealers acting for unincorporated trustees, guardians or other fiduciaries, and in case of incorporated trustees, guardians or other fiduciaries, the appraisal shall be made by an agent or committee composed of or selected by the board of directors or executive committee of the incorporated trustee, guardian or other fiduciary;
2. The trustee, guardian or other fiduciary or any institution controlled by that entity or person has not received any commission from the borrower or issuer in the making of the mortgage or deed of trust or the underwriting of the securities secured by the mortgage or deed of trust, unless the commission charged the borrower or issuer does not exceed one percent (1%) per annum of the aggregate principal amount of the bonds or notes; and
3. Any probate or chancery court of the county where the fiduciary is located, upon the application of any beneficiary of the trust or of any person connected with any beneficiary, by consanguinity or affinity, within the sixth degree as computed by the civil law, may, at any time, either restrain the making of any such proposed investment, if the investment is not consummated, or if consummated, require the fiduciary promptly to dispose of the bonds or notes at the best price then obtainable and otherwise reinvest the funds, and the court may exercise such power to restrain or compel disposal in all cases in which the court may find that action to be necessary to protect the interest of any beneficiary.

Acts 1931, ch. 100, § 1(f); C. Supp. 1950, § 9596.1(E); modified; T.C.A. (orig. ed.), § 35-307.

Cross-References. See notes to § 35-3-102.

Law Reviews.

Tennessee and the Installment Land Contract: A Viable Alternative to the Deed of Trust, 21 Mem. St. U.L. Rev. 551 (1991).

35-3-108. Railroad obligations.

1. Investments may be made in the following railroad obligations:
   1. Obligations issued, assumed or guaranteed as to principal and interest by endorsement, or so guaranteed, which guaranty has been assumed;
   2. Obligations for the payment of the principal and interest of which a railroad corporation such as is described in this section is obligated under the terms of a lease made or assumed; or
   3. Equipment trust obligations in respect of which liability has been incurred by a railroad corporation incorporated under the laws of the United States, or any state of the United States, and owning and operating within the United States not less than five hundred (500) miles of standard-gauge railroad line, exclusive of sidings, or if the mileage so owned is less than five hundred (500) miles, the railroad operating revenues from the operation of all railroads operated by it, including the revenues from the operation of all railroads controlled through ownership of all, except directors' qualifying shares, of the voting stock of the owning corporation, was not less than ten million dollars ($10,000,000) each year for at least five (5) of the six (6) fiscal years next preceding the investment.
2. Provided, that:
   1. In each year for at least five (5) of the six (6) fiscal years and in the last fiscal year next preceding the investment, the amount of income of such railroad corporation available for its fixed charges, as defined in subsection (c), was not less than one and one-half (1½) times its fixed charges, as defined in subsection (c);
   2. In each year for at least five (5) of the six (6) fiscal years next preceding the investment, the railroad corporation has paid dividends in cash upon its capital stock equivalent to at least one fourth (¼) of its fixed charges, or if the railroad corporation has not paid such dividends, that the amount of income available for its fixed charges was not less than one and one half (1½) times its fixed charges for at least nine (9) of the ten (10) fiscal years and in the last fiscal year next preceding the investment;
   3. At no time within the period of six (6) years has the railroad corporation failed regularly and punctually to pay the matured principal and interest of all its mortgage indebtedness; and
   4. The security, if any, for the obligations shall be property wholly or in part within the United States and the obligations shall be:
      1. Fixed interest-bearing bonds secured by direct mortgage on railroad owned or operated by the railroad corporation;
      2. Bonds secured by first mortgage upon terminal, depot or tunnel property, including lands, buildings and appurtenances, used in the service of transportation by one (1) or more railroad corporations; provided, that the bonds are the direct obligation of, or that payment of principal and interest of the bonds are guaranteed by, endorsement by or guaranteed by endorsement, which guaranty has been assumed by, one (1) or more railroad corporations;
      3. Equipment trust obligations, comprising bonds, notes and certificates, issued in connection with the purchase for use on railroads of new standard-gauge rolling stock through the medium of an equipment trust agreement, and which obligations, so long as any of them are outstanding and unpaid or unprovided for, shall be secured by an instrument:
         1. Vesting title to the equipment in a trustee free of encumbrance; or
         2. Creating a first lien on the equipment, or, pending the vesting of title, by the deposit of cash in trust to an amount equal to the face amount of the obligations issued in respect of the equipment, title to which is not yet so vested; provided, that the maximum amount of the obligations so issuable shall not exceed eighty percent (80%) of the cost of the equipment; and provided further, that the owner, purchaser or lessee, or the owners, purchasers or lessees, of the equipment shall be obligated by the terms of the obligations or of the instrument to:
            1. Maintain the equipment in proper repair;
            2. Replace any of the equipment that may be destroyed or released with other equipment of equal value, or, if released in connection with a sale of the equipment, to deposit the proceeds of the sale in trust for the benefit of the holders of the obligations pending replacement of the equipment;
            3. Pay any and all taxes or other governmental charges that may be required by law to be paid upon the equipment;
            4. Pay, in accordance with the provisions of the obligations or of the instrument, to holders, or to the trustee for the benefit of holders, of the obligations the amount of interest due on the obligations or of the dividends payable in respect of the obligations; and
            5. Pay the amount of the entire issue of the obligations in annual or semiannual installments each year throughout a period of not exceeding fifteen (15) years from the first date of issue of any of the obligations that the amount of the respective unmatured installments at any time outstanding shall be approximately equal; provided, that unless the owner, purchaser or lessee of the equipment, or one (1) or more of the owners, purchasers or lessees shall be a railroad corporation as is described in and meets the requirements of this section preceding subdivision (b)(4)(A), the obligations shall be guaranteed by endorsements as to principal and as to interest or dividends by the railroad corporation;
      4. Bonds of the railroad corporation secured by irrevocable pledge as collateral under a trust agreement of other railroad bonds that are legal investment for fiduciaries under this section, have a maturity not earlier than the bonds that they secure and of a total face amount not less than the total face amount of the bonds that they secure; or
      5. Fixed interest-bearing mortgage bonds other than those described in subdivisions (b)(4)(A) and (B), income mortgage bonds, collateral trust bonds or obligations other than those described in subdivision (b)(4)(D), or unsecured bonds or obligations, issued, assumed or guaranteed as to principal and interest by endorsement by, or so guaranteed, which guaranty has been assumed by, the railroad corporation; provided, that in each year for at least five (5) of the six (6) fiscal years and in the last fiscal year next preceding the investment:
         1. The amount of income of the railroad corporation available for its fixed charges, as defined in subsection (c), was not less than twice the sum of:
            1. Its fixed charges, as defined in subsection (c); and
            2. Full interest on the income mortgage bonds, if any;
         2. The net income of which after deductions was not less than ten thousand dollars ($10,000); and
         3. The railroad corporation has made the dividend and principal and interest payments required  by subdivisions (b)(4)(C)(ii)(d ) and (e ).
3. The amount of income available for fixed charges shall be the amount obtained by deducting from gross income all items deductible in ascertaining net income other than contingent income interest and those constituting fixed charges. Fixed charges shall be rent for leased roads, miscellaneous rents, fixed interest on funded debt, interest on unfunded debt and amortization of discount on funded debt.
4. Accounting terms used in this section shall be deemed to refer to those used in the accounting reports prescribed by the accounting regulations for common carriers subject to the Interstate Commerce Act (U.S.C. Title 49). If the interstate commerce commission prescribes accounting regulations in which are defined the terms “income available for fixed charges” and “fixed charges,” the definitions of those terms as so prescribed shall be taken and used in lieu of the definitions set forth in subsection (c) for all purposes.
5. For purposes of this section, the revenues, earnings, income and fixed charges of, and dividends paid by, any railroad corporation, all or substantially all of the railroad lines of which have been acquired through merger, consolidations, conveyance or lease by another railroad corporation and remain in its possession, shall be deemed to be revenues, earnings, income and fixed charges of, and dividends paid by, the latter corporation.
6. Not more than twenty-five percent (25%) of the assets of any trust shall be loaned or invested in the bonds, notes and certificates in this section defined, and not more than ten percent (10%) of the assets shall be invested in such bonds, notes and certificates for which any one (1) railroad corporation shall be obligated.

Acts 1931, ch. 100, § 1(g); C. Supp. 1950, § 9596.1(F); modified; T.C.A. (orig. ed.), § 35-308.

Cross-References. See notes to § 35-3-102.

35-3-109. Public utility bonds.

1. Investments may be made in the bonds of any corporation that at the time of the investment is incorporated under the laws of the United States or any state of the United States, or the District of Columbia, and transacting the business of supplying electrical energy or artificial gas or both for light, heat, power and other purposes; provided, that at least seventy-five percent (75%) of the gross operating revenues of any such corporation are derived from that business, and not more than fifteen percent (15%) of the gross operating revenues, are derived from any one (1) kind of business other than supplying electricity and gas; and provided further, that corporation is subject to regulation by the Tennessee public utility commission or a public utility commission, or other similar regulatory body duly established by the laws of the United States or the states in which such corporation operates, subject to the following conditions:
   1. The corporation has all franchises necessary to operate in territory in which at least seventy-five percent (75%) of its gross income is earned, which franchises shall either be indeterminate permits or agreements with or subject to the jurisdiction of the Tennessee public utility commission, or other duly constituted regulatory body, or extend at least five (5) years beyond the maturity of the bonds;
   2. The outstanding full paid capital stock of the corporation is equal to at least two thirds (2/3) of the total debt secured by mortgage lien on any part or all of its property; provided, that in case of a corporation having nonpar value shares, the amount of capital that such shares represent is the capital as shown by the books of the corporation;
   3. The corporation has been in existence for a period of not less than eight (8) fiscal years and at no time within the period of eight (8) fiscal years next preceding the date of the investment has the corporation failed to pay promptly and regularly the matured principal and interest of all its indebtedness direct, assumed or guaranteed, but the period of life of the corporation, together with the period of life of any predecessor corporation or corporations from which a major portion of its property was acquired by consolidation, merger or purchase shall be considered together in determining the required period;
   4. For a period of five (5) fiscal years next preceding the investment the net earnings of the corporation have averaged per year not less than twice the average annual interest charges on its total funded debt applicable to that period, and for the last fiscal year preceding the investment its net earnings have been not less than twice the interest charges for a full year on its total funded debt outstanding at the time of the investment, and for that period the gross operating revenues of any such corporation have averaged per year not less than one million dollars ($1,000,000), and the corporation has for each year either earned an amount available for dividends or paid in dividends an amount equal to four percent (4%) upon a sum equivalent to two thirds (2/3) of its funded debt;
   5. The bonds must be part of an issue of not less than one million dollars ($1,000,000) and must be mortgage bonds secured by a first or refunding mortgage secured by property owned and operated by the corporation issuing or assuming them, or must be underlying mortgage bonds secured by property owned and operated by the corporations issuing or assuming them. The bonds are to be refunded by a junior mortgage providing for their retirement; provided, that the bonds under the junior mortgage comply with the requirements of this section and that the underlying mortgage is either a closed mortgage or remains open solely for the issue of additional bonds which are to be pledged under the junior mortgage. The aggregate principal amount of bonds secured by the first or refunding mortgage plus the principal amount of all the underlying outstanding bonds shall not exceed sixty percent (60%) of the value of the physical property owned as shown by the books of the corporation and subject to the lien of the mortgage or mortgages securing the total mortgage debt; and provided further, that, if a refunding mortgage, it must provide for the retirement on or before the date of their maturity of all bonds secured by prior liens on the property; and
   6. Not more than twenty-five percent (25%) of the assets of any trust shall be loaned on or invested in bonds of electric and gas corporations, and not more than ten percent (10%) of the assets of any trust shall be invested in the bonds of any one such corporation, as authorized by this section.
2. In determining the qualifications of any bond under this section where a corporation has acquired its property or any substantial part thereof within five (5) years immediately preceding the date of the investment by consolidation or merger, or by the purchase of all or a substantial portion of the property of any other corporation or corporations, the gross operating revenues, net earnings and interest charges of the several predecessor or constituent corporations shall be consolidated and adjusted so as to ascertain whether there has been compliance with the requirements of subdivision (a)(4).
3. 1. The gross operating revenues and expenses of a corporation, for the purposes of this section, shall be, respectively, the total amount earned from the operation of, and the total expense of maintaining and operating all property owned and operated by or leased and operated by the corporation, as determined by the system of accounts prescribed by the Tennessee public utility commission, public utility commission or other similar regulatory body having jurisdiction in the matter. The gross operating revenues and expenses, as defined in this subdivision (c)(1), of subsidiary companies may be included; provided, that all the mortgage bonds and a controlling interest in stock or stocks of the subsidiary companies are pledged as part security for the mortgage debt of the principal company; and
   2. The net earnings of any corporation, for the purpose of this section, shall be the balance obtained by deducting from its gross operating revenues, its operating and maintenance expenses, taxes other than federal and state income taxes, rentals and provision for renewals and retirements of the physical assets of the corporation, and by adding to the balance its income from securities and miscellaneous sources, but not, however, to exceed fifteen percent (15%) of the balance;

Acts 1931, ch. 100, § 1(h); C. Supp. 1950, § 9596.1(G); modified; T.C.A. (orig. ed.), § 35-309; Acts 1995, ch. 305, § 100; 2017, ch. 94, § 34.

Amendments. The 2017 amendment substituted “Tennessee public utility commission” for “Tennessee regulatory authority” in (a), (a)(1), and (c)(1).

Effective Dates. Acts 2017, ch. 94, § 83. April 4, 2017.

Cross-References. See notes to § 35-3-102.

35-3-110. Telephone corporation bonds.

1. Investments may be made in the bonds of any corporation that at the time of the investment is incorporated under the laws of the United States or any state of the United States, or the District of Columbia, and is authorized to engage and is engaging in the business of furnishing telephone service in the United States, and provided the corporation is subject to regulation by the interstate commerce commission or a regulatory authority, or public utility commission or other similar federal or state regulatory body duly established by the laws of the United States or the states in which the corporation operates, subject to the following conditions:
   1. The corporation has been in existence for a period of not less than eight (8) fiscal years and at no time within that period of eight (8) fiscal years next preceding the date of the investment has the corporation failed to pay promptly and regularly the matured principal and interest of all its indebtedness direct, assumed or guaranteed, but the period of life of the corporation, together with the period of life of any predecessor corporation or corporations from which a major portion of its property was acquired by consolidation, merger or purchase, shall be considered together in determining the required period;
   2. The outstanding full paid capital stock of the corporation is at the time of the investment equal to at least two thirds (2/3) of the total debt secured by all mortgage liens on any part or all of its property;
   3. For a period of five (5) fiscal years next preceding the investment, the net earnings of the corporation have averaged per year not less than twice the average annual interest charges on its total funded debt applicable to that period, and for the last fiscal year preceding the investment, the net earnings have been not less than twice the interest charges for a full year on its total funded debt outstanding at the time of the investment, and for that period, the gross operating revenues of the corporation have averaged per year not less than five million dollars ($5,000,000), and the corporation has for each of those years either earned an amount available for dividends or paid in dividends an amount equal to four percent (4%) upon all of its outstanding capital stock; and
   4. The bonds must be part of an issue of not less than five million dollars ($5,000,000) and must be secured by a first or refunding mortgage, and the aggregate principal amount of bonds secured by the first or refunding mortgage, plus the principal amount of all underlying outstanding bonds, shall not exceed sixty percent (60%) of the value of the property, real and personal, owned absolutely and subject to the lien of the mortgage; provided, that, if a refunding mortgage, it must provide for the retirement of all bonds secured by prior liens on the property. Not more than thirty-three and one third percent (331/3%) of the property constituting the specific security for the bonds may consist of stock or unsecured obligations of affiliated or other telephone companies, or both.
2. In determining the qualification of any bond under this section, where a corporation has acquired its property or any substantial part of its property within five (5) years immediately preceding the date of the investment by consolidation or merger or by the purchase of all or a substantial portion of the property of any other corporation or corporations, the gross operating revenues, net earnings and interest charges of the several predecessor or constituent corporations shall be consolidated and adjusted so as to ascertain whether there has been compliance with the requirements of subdivision (a)(3).
3. The gross operating revenues and expenses of a corporation, for the purpose of this section, shall be respectively the total amount earned from the operation of, and the total expense of maintaining and operating, all property owned and operated by or leased and operated by the corporation, as determined by the system of accounts prescribed by the interstate commerce commission or the Tennessee public utility commission, or public utility commission, or other similar federal or state regulatory body having jurisdiction in the matter.
4. The net earnings of any corporation, for the purpose of this section, shall be the balance obtained by deducting from its gross operating revenues its operating and maintenance expenses, provision for depreciation of the physical assets of the corporation, taxes other than federal and state income taxes, rentals and miscellaneous charges, and by adding to the balance its income from securities and miscellaneous sources, but not, however, to exceed fifteen percent (15%) of the balance. “Funded debt” means all interest bearing debts maturing more than one (1) year from date of issue.
5. Not more than twenty-five percent (25%) of the assets of any trust shall be loaned on or invested in bonds of telephone corporations, and not more than ten percent (10%) of the assets of any trust shall be invested in the bonds of any one (1) telephone corporation, as authorized by this section.

Acts 1931, ch. 100, § 1(i); C. Supp. 1950, § 9596.1(H); modified; T.C.A. (orig. ed.), § 35-310; Acts 1995, ch. 305, § 101; 2017, ch. 94, § 35.

Amendments. The 2017 amendment substituted “Tennessee public utility commission” for “Tennessee regulatory authority” in (c).

Effective Dates. Acts 2017, ch. 94, § 83. April 4, 2017.

Cross-References. See notes to § 35-3-102.

35-3-111. Obligations of certain federal agencies.

Trustees, guardians and other fiduciaries may also invest in or lend on the following obligations issued by the following authorized federal agencies:

1. Bonds and/or debentures issued by a federal home loan bank organized under the “Federal Home Loan Bank Act” (47 Stat. 725, 12 U.S.C. § 1421 et seq.);
2. Stock of federal savings and loan associations organized under the “Home Owner's Loan Act of 1933” (48 Stat. 128, 12 U.S.C. § 1461 et seq.), and amendments to that act, and/or building and loan associations, licensed to do business in Tennessee, where the stock of the associations is insured by the federal savings and loan insurance corporation;
3. Notes, bonds, debentures or other obligations issued under title IV of the act of congress of the United States entitled “National Housing Act,” approved June 27, 1934 (48 Stat. 1246, 12 U.S.C. § 1701 et seq.), and any amendments thereto; and
4. Mortgages guaranteed or insured under title III of the act of congress of the United States, entitled “Servicemen's Readjustment Act of 1944,” approved June 22, 1944 (58 Stat. 284, 38 U.S.C. § 1801 et seq. [repealed]), and any amendments thereto.

Acts 1935 (E.S.), ch. 36, § 1; 1939, ch. 73, § 1; 1949, ch. 175, § 1; C. Supp. 1950, § 9596.1(I); modified; T.C.A. (orig. ed.), § 35-311.

Compiler's Notes. Some of the provisions in (2) may be obsolete. The federal savings and loan insurance corporation no longer exists.

Title III of the Servicemen's Readjustment Act of 1944, referred to in subdivision (4), was repealed by Act Sept. 2, 1958, P.L. 85-857, § 14(87), 72 Stat. 1273. For present law, see 38 U.S.C. § 3701 et seq.

Cross-References. See notes to § 35-3-102.

35-3-112. State and federal bond issues — Reports.

Guardians, executors, administrators and trustees shall also be authorized and empowered to invest money and funds in their hands in the bonds of the state, of the United States, or obligations issued separately or collectively by or for federal land banks, federal intermediate credit banks and banks for cooperatives under the act of congress known as the Farm Credit Act of 1971 (85 Stat. 583, 12 U.S.C. § 2001 et seq.) and amendments to that act, or in obligations issued under the Home Owner's Loan Act of congress (12 U.S.C. § 1461 et seq.), or notes or bonds secured by mortgage or trust deed insured by the federal housing administrator, or bonds and/or debentures issued by national mortgage associations; also to lend on the security of any such bonds to the extent of eighty-five percent (85%) of their face value; and, in either case, make report thereof to the court where the guardian, executor, administrator or trustee is qualified, unless another mode of investment is required by will or deed of the testator or another person who has established the funds.

Acts 1865, ch. 19, § 2; Shan., § 4281; Acts 1925, ch. 9, § 1; Shan. Supp., § 4281a4; mod. Code 1932, § 8497; Acts 1935, ch. 136, § 1; 1935, ch. 187, § 1; 1937, ch. 75, § 1; C. Supp. 1950, § 8497; Acts 1976, ch. 585, § 2; T.C.A. (orig. ed.), § 35-312.

35-3-113. Life, endowment or annuity contracts of life insurance companies.

1. Executors, trustees and guardians are authorized, with the approval of a probate court or other court of competent jurisdiction, to invest out of income or principal of funds in their custody, in single or annual premium life, endowment or annuity contracts of legal reserve life insurance companies duly licensed and qualified to transact business within the state.
2. Such contracts may be issued on the life or lives of any beneficiary, cestui que trust or ward, who may have a vested or contingent interest in the estate, or on the life or lives of any parent, trustor or other person in whom any beneficiary, cestui que trust or ward may have an insurable interest, and shall such be so drawn that the legal title of the policy or contract shall be in and the proceeds or avails of the proceeds payable to and in the control of the fiduciary making the investment, and may be retained and shall be subject to transfer, assignment and conveyance by the fiduciary as other personal property held in the account.

Acts 1939, ch. 133, §§ 1-3; 1945, ch. 150, § 1; mod. C. Supp. 1950, § 9596.2; T.C.A. (orig. ed.), § 35-313; Acts 2010, ch. 725, § 22.

Law Reviews.

Some Aspects of Estate Planning in Tennessee (Alec Brock Stevenson), 2 Vand. L. Rev. 265 (1949).

35-3-114. Certificates of deposit and savings accounts.

All trustees and guardians in this state, unless prohibited, or another mode of investment is prescribed, by the will or deed of the testator or other person establishing the trust, may invest trust funds in their hands, in addition to the investments heretofore authorized, in certificates of deposit of, and savings accounts in, any national or state bank in the United States, including itself if such trustee or guardian is a national or state bank in the United States otherwise qualified, whose deposits are insured by the federal deposit insurance corporation, at the prevailing rate of interest of such certificates or savings accounts. No trustee or guardian shall invest in such certificates of deposit of, or savings accounts in any one (1) bank, an amount from any one (1) fund in the trustee's or guardian's care in excess of such amount as is fully insured as a deposit in the bank by the federal deposit insurance corporation, unless the investment is first approved by a court of competent jurisdiction.

Acts 1939, ch. 170, § 1; C. Supp. 1950, § 9596.3 (Williams, § 9596.7); Acts 1975, ch. 331, § 1; T.C.A. (orig. ed.), § 35-314; Acts 1989, ch. 288, § 1.

35-3-115. Public housing authority obligations.

Notwithstanding any restrictions on investments contained in any laws of this state, the state and all public officers, municipal corporations, political subdivisions, and public bodies, all banks, bankers, trust companies, savings banks and institutions, building and loan associations, savings and loan associations, investment companies, and other persons carrying on a banking business, all insurance companies, insurance associations and other persons carrying on an insurance business, and all executors, administrators, guardians, trustees and other fiduciaries may legally invest any sinking funds, moneys or other funds belonging to them or within their control in any bonds or other obligations issued by a housing authority pursuant to the Housing Authorities Law, compiled in title 13, chapter 20, and any amendments to that law, or issued pursuant to the Memphis Housing Authority Law, chapter 615 of the Private Acts of 1935, as amended by chapter 900 of the Private Acts of 1937, and any amendments to that law, or issued by any public housing authority or agency in the United States, when the bonds or other obligations are secured by a pledge of annual contributions to be paid by the United States government or any agency of the United States government. The bonds and other obligations shall be authorized security for all public deposits, it being the purpose of this section to authorize any persons, firms, corporations, associations, political subdivisions, bodies and officers, public or private, to use any funds owned or controlled by them, including, but not limited to, sinking, insurance, investment, retirement, compensation, pension and trust funds, and funds held on deposit, for the purchase of any such bonds or other obligations; provided, that nothing contained in this section shall be construed as relieving any person, firm or corporation from any duty of exercising reasonable care in selecting securities.

Acts 1939, ch. 155, § 1; C. Supp. 1950, § 9596.4 (Williams, § 9596.8); T.C.A. (orig. ed.), § 35-315.

35-3-116. Courts empowered to authorize retention of original investments.

1. Any guardian, personal representative, trustee or other fiduciary may make, in the county in which appointed, application to the chancery court, or to any other court therein having concurrent jurisdiction, for permission to retain and hold in unchanged form any security or investment originally forming a part of the estate, and the court shall have the authority and power to authorize the guardian, personal representative, trustee or other fiduciary, to retain and hold in unchanged form any security or investment originally forming a part of the estate, upon it being made to appear to the court that retention of the security or investment is to the manifest interest of the estate. The authority to retain securities or investments, when granted to the fiduciary by the instrument under which the fiduciary is acting, is not affected by the foregoing provisions.
2. The application in every such case shall be made by bill or petition, and the beneficiaries be made the defendants and served with process, and the cause shall be conducted and heard in the same manner as other suits in chancery.
3. A guardian ad litem shall be appointed for all defendants under disability, and the decree of the court authorizing the retention of the securities or investments shall set out fully the reasons and object moving the court in granting to the fiduciary the authority so to do.
4. It is not intended to impose upon a fiduciary any duty or obligation in addition to those arising under previously existing law, nor is it intended to change, modify or alter any investment statute of the state, except insofar as variations from those statutes may be made through proceedings authorized by this section.

Acts 1945, ch. 53, §§ 1-4; mod. C. Supp. 1950, §§ 9596.5-9596.7 (Williams, §§ 9596.9-9596.11); T.C.A. (orig. ed.), §§ 35-316 — 35-318.

Textbooks. Pritchard on Wills and Administration of Estates (5th ed., Phillips and Robinson), § 740.

Law Reviews.

Wills and Fiduciary Powers (Robert L. McMurray), 31 Tenn. L. Rev. 191 (1964).

Collateral References.

Absences of market therefor as justifying trustee's retention of unauthorized or nonlegal securities received from creator of trust. 88 A.L.R.3d 894.

35-3-117. Investment in securities of management investment company or investment trust by bank or trust company — Fiduciary liability — Abuse of fiduciary discretion.

1. Notwithstanding any other law, a bank or trust company, to the extent it acts at the direction of another person authorized to direct investment of funds held by the bank or trust company, or to the extent that it exercises investment discretion as a fiduciary, custodian, managing agent, or otherwise with respect to the investment and reinvestment of assets that it maintains in its trust department, may invest and reinvest the assets, subject to the standard contained in this section, in the securities of any open-end or closed-end management investment company or investment trust registered under the Investment Company Act of 1940 (15 U.S.C. §§ 80a-1 — 80a-64). The fact that the bank or trust company, or any affiliate of the bank or trust company, is providing services to the investment company or trust as investment advisor, sponsor, distributor, custodian, transfer agent, registrar or otherwise, and receiving reasonable remuneration for the services, does not preclude the bank or trust company from investing in the securities of the investment company or trust.
2. In the absence of express provisions to the contrary in the governing instrument, a fiduciary will not be liable to the beneficiaries or to the trust with respect to a decision regarding the allocation and nature of investments of trust assets unless the court determines that the decision was an abuse of the fiduciary's discretion. A court shall not determine that a fiduciary abused its discretion merely because the court would not have exercised the discretion in the same manner.
3. If a court determines that a fiduciary has abused its discretion regarding the allocation and nature of investments of trust assets, the remedy is to restore the income and remainder beneficiaries to the positions they would have occupied if the fiduciary had not abused its discretion, according to the following rules:
   1. To the extent that the abuse of discretion has resulted in no distribution to a beneficiary or a distribution that is too small, the court shall require a distribution from the trust to the beneficiary in an amount that the court determines will restore the beneficiary, in whole or in part, to the beneficiary's appropriate position, taking into account all prior distributions to the beneficiary.
   2. To the extent that the abuse of discretion has resulted in a distribution to a beneficiary that is too large, the court shall restore the beneficiaries, the trust, or both, in whole or in part, to their appropriate positions, taking into account all prior distributions, by requiring the fiduciary to withhold an amount from one (1) or more future distributions to the beneficiary who received the distribution that was too large or requiring that beneficiary to return some or all of the distribution to the trust.
   3. To the extent that the court is unable, after applying subdivisions (c)(1) and (c)(2), to restore the beneficiaries, the trust, or both, to the position they would have occupied if the fiduciary had not abused its discretion, the court may require the fiduciary to pay an appropriate amount from its own funds to one (1) or more of the beneficiaries or the trust or both.
4. Upon a petition by the fiduciary, the court having jurisdiction over the trust or agency account shall determine whether a proposed plan of investment by the fiduciary will result in an abuse of the fiduciary's discretion. If the position describes the proposed plan of investment and contains sufficient information to inform the beneficiaries of the reasons for the proposal, the facts upon which the fiduciary relies, and an explanation of how the income and remainder beneficiaries will be affected by the proposed plan of investment, a beneficiary who challenges the proposed plan of investment has the burden of establishing that it will result in an abuse of discretion.

Acts 1951, ch. 125, §§ 1-6 (Williams, §§ 9596.12-9596.17); Acts 1968, ch. 518, § 1; 1971, ch. 61, § 1; 1974, ch. 634, § 1; T.C.A. (orig. ed.), §§ 35-319 — 35-324; Acts 1989, ch. 288, § 2; 1991, ch. 386, § 1; 2001, ch. 57, §§ 1, 2; 2002, ch. 696, § 15.

Textbooks. Pritchard on Wills and Administration of Estates (5th ed., Phillips and Robinson), § 1018.

Law Reviews.

Selection and Removal of Fiduciaries (Robert L. McMurray), 26 No. 3 Tenn. B.J. 22 (1990).

Where There's a Will: “Total return trusts” come to Tennessee (Dan W. Holbrook), 37 No. 12 Tenn. B.J. 33 (2001).

35-3-118. Stocks or bonds held by fiduciary in nominee's name.

1. Trustees, guardians and other fiduciaries owning stocks or registered bonds may hold them in the name of a nominee without mention of the fiduciary relationship in the stock certificates, stock registration books, or registered bond or bond registry; provided, that:
   1. The records and all reports and accounts rendered by the fiduciary clearly show the ownership of the stock or bond by the fiduciary, and the facts regarding its holding; and
   2. The nominee deposits with the fiduciary a signed statement showing the fiduciary ownership, either endorses the stock certificate or registered bond in blank, or signs a transfer power in blank, and attach it to the certificate or bond, and does not have possession of or access to the stock certificate or bond, except under the immediate supervision of the fiduciary.
2. The fiduciary shall be personally liable for any loss resulting from any act of the nominee in connection with the securities so held.
3. This section shall apply to all such fiduciary relationships.

Acts 1953, ch. 165, §§ 1, 3 (Williams, § 9596.8b); 1957, ch. 49, § 1; T.C.A. (orig. ed.), § 35-325.

Textbooks. Pritchard on Wills and Administration of Estates (5th ed., Phillips and Robinson), § 1018.

Law Reviews.

Wills, Estates and Trusts (William J. Bowe), 6 Vand. L. Rev. 1126 (1953).

35-3-119. Tennessee valley authority obligations.

Notwithstanding any restrictions on investments contained in any laws of this state, the state and all public officers, municipal corporations, political subdivisions, and public bodies, all banks, bankers, trust companies, savings banks and institutions, building and loan associations, savings and loan associations, investment companies, and other persons carrying on a banking business, all insurance companies, insurance associations and other persons carrying on an insurance business, and all executors, administrators, guardians, trustees and other fiduciaries may legally invest any sinking funds, moneys or other funds belonging to them or within their control in any bonds or other obligations issued by the Tennessee valley authority pursuant to the Tennessee Valley Authority Act of 1933 (16 U.S.C. § 831), and any amendment to that act, and the bonds and other obligations shall be authorized security for all public deposits, it being the purpose of this section to authorize any persons, firms, corporations, associations, political subdivisions, bodies and officers, public or private, to use any funds owned or controlled by them, including, but not limited to, sinking, insurance, investment, retirement, compensation, pension and trust funds, and funds held on deposit, for the purchase of any such bonds or other obligations. Nothing contained in this section shall be construed as relieving any person, firm or corporation from any duty of exercising reasonable care in selecting securities.

Acts 1961, ch. 128, § 1; T.C.A., § 35-326.

Law Reviews.

The Right to Counsel for the Indigent Defendant in Tennessee (Charles H. Miller), 31 Tenn. L. Rev. 300 (1964).

35-3-120. Federally guaranteed loans and investments.

1. Banks, trust companies, insurance companies, building and loan associations, credit unions, trustees and others acting in a fiduciary capacity, trust funds, pension and profit-sharing funds, real estate investment trusts, and other financial institutions, originating mortgagee institutions, and other institutions approved as mortgagees and otherwise meeting the requirements of the federal housing administration or veterans administration to act as mortgagees under the programs of these agencies may:
   1. Make loans and advances of credit and purchases of obligations representing loans and advances of credit that are eligible for credit insurance by the federal housing commissioner, and may obtain that insurance;
   2. Make loans secured by real property or leasehold, that the federal housing commissioner insures or makes a commitment to insure, and may obtain that insurance;
   3. Invest their funds, eligible for investment, in notes or bonds secured by mortgage or trust deed insured by the federal housing commissioner, and in debentures issued by the federal housing commissioner, and also in securities issued by the Federal National Mortgage Association; and
   4. Make any loans and advances of credit and purchases of obligations representing loans and advances of credit that are eligible to be guaranteed or insured in whole or in part by the veterans administration or administrator of veterans affairs, or secured by real property or leasehold as the administrator of veterans affairs makes a commitment to guarantee or insure.
2. No law of this state, requiring security upon which loans or investments may be made, or prescribing the nature, amount or form of the security, or prescribing or limiting interest rates upon loans or investments, or limiting investments of capital or deposits, or prescribing or limiting the period for which loans or investments may be made, shall apply to loans or investments made pursuant to this section.

Acts 1961, ch. 43, §§ 1, 2; T.C.A., §§ 35-327, 35-328.

35-3-121. Investments in securities by banks or trust companies.

Unless the governing instrument, court order, or a statute specifically directs otherwise, a bank or trust company serving as trustee, guardian, agent, or in any other fiduciary capacity may invest in any security authorized by this chapter even if that fiduciary or an affiliate of that fiduciary, as defined in former § 35-3-117(d) [repealed], participates or has participated as a member of a syndicate underwriting the security, if:

1. The fiduciary does not purchase the security from itself or its affiliate; and
2. The fiduciary does not purchase the security from another syndicate member or an affiliate, pursuant to an implied or express agreement between the fiduciary or its affiliate and a selling member or its affiliate, to purchase all or part of each other's underwriting commitments.

Acts 1983, ch. 60, § 1; T.C.A., § 35-329.

Compiler's Notes. Former § 35-3-117(d), referred to in this section, was repealed by Acts 2002, ch. 696, § 15, effective July 1, 2002.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

35-3-122. Liability of fiduciaries for losses.

Whenever an instrument under which a fiduciary is acting reserves to the settlor or vests an advisory or investment committee or in any other person or persons including one (1) or more other fiduciaries, to the exclusion of the fiduciary or to the exclusion of one (1) or more of several fiduciaries, authority to direct the making or retention of any investment, or to perform any other act in the management or administration of the fiduciary account, the excluded fiduciary or fiduciaries shall not be liable, either individually or as a fiduciary, for any loss resulting from the making or retention of any investment or other act pursuant to that direction.

Acts 1987, ch. 89, § 2.

35-3-123. Trustee liability — Action upon written directions.

1. A trustee of a revocable, irrevocable or testamentary trust is not liable to any beneficiary for any act performed or omitted pursuant to written directions from the person holding the power to revoke, terminate or amend the trust.
2. A trustee of a revocable, irrevocable or testamentary trust is not liable for any investment action performed or omitted pursuant to written directions from the person to whom the power to direct the investment or management of the account is delegated by the trustor.

Acts 1989, ch. 288, § 3.

35-3-124. Investment in tuition units.

Notwithstanding any other law to the contrary, trustees and others acting in a fiduciary capacity, including governmental agencies such as court clerks, may invest funds held in trust for a minor through the purchase of tuition units on behalf of the minor under the Tennessee College Savings Trust Act, compiled in title 49, chapter 7, part 8.

Acts 1997, ch. 64, § 1; 2017, ch. 400, § 2.

Amendments. The 2017 amendment substituted “Tennessee College Savings Trust Act” for “Tennessee Baccalaureate Education System Trust Act” .

Effective Dates. Acts 2017, ch. 400, § 20. July 1, 2017.

35-4-101. Short title.

This chapter shall be known and may be cited as the “Uniform Common Trust Fund Act.”

Acts 1953, ch. 148, § 4 (Williams, § 9596.35); T.C.A. (orig. ed.), § 35-401.

Law Reviews.

Wills and Fiduciary Powers (Robert L. McMurray), 31 Tenn. L. Rev. 191 (1964).

Collateral References.

Construction of the Uniform Common Trust Fund Act. 64 A.L.R.2d 268.

35-4-102. Bank or trust company establishing common trust funds — Investing in trust funds.

Any bank or trust company qualified to act as fiduciary in this state may establish common trust funds for the purpose of furnishing investments to itself as fiduciary, or to itself and others as cofiduciaries, or to another bank or trust company which may, as such fiduciary or cofiduciary, invest funds that it lawfully holds for investment in interests in the common trust funds, if this investment is not prohibited by the instrument, judgment, decree or order creating the fiduciary relationship, and if, in the case of cofiduciaries, the bank or trust company procures the consent of its cofiduciaries to the investment.

Acts 1953, ch. 148, § 1 (Williams, § 9596.32); 1973, ch. 378, § 1; T.C.A. (orig. ed.), § 35-402.

35-4-103. Accounting for trust funds — Chancery court approval.

1. Unless ordered by a court of competent jurisdiction, the bank or trust company operating the common trust funds is not required to render a court accounting with regard to the funds, but it may, by application to the chancery court, secure approval of such an accounting on such conditions as the court may establish.
2. When an accounting of a common trust fund is presented to a court for approval, the court shall assign a date and place for hearing and order notice thereof by:
   1. Publication once a week for three (3) weeks, the first publication to be not less than twenty (20) days prior to the date of hearing, of a notice in a newspaper having a circulation in the county in which the bank or trust company or branch thereof operating the common trust fund is located;
   2. Mailing not less than fourteen (14) days prior to the date of the hearing a copy of the notice to all beneficiaries of the trusts participating in the common trust fund whose names are known to the bank or trust company from the records kept by it in the regular course of business in the administration of the trusts, directed to them at the addresses shown by those records; and
   3. Such further notice if any as the court may order.

Acts 1953, ch. 148, § 2 (Williams, § 9596.33); T.C.A. (orig. ed.), § 35-403.

Law Reviews.

The Tennessee Court System — Chancery Court (Frederic S. Le Clercq), 8 Mem. St. U.L. Rev. 281 (1978).

35-4-104. Uniformity of construction and interpretation.

This chapter shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states that enact it.

Acts 1953, ch. 148, § 3 (Williams § 9596.34); T.C.A. (orig. ed.), § 35-404.

35-4-105. Fiduciary relationships to which chapter applicable.

This chapter applies to fiduciary relationships in existence on April 8, 1953, or established after that date.

Acts 1953, ch. 148, § 7; T.C.A. (orig. ed.), § 35-405.

35-5-101. Twenty days' notice by publication.

1. In any sale of land to foreclose a deed of trust, mortgage or other lien securing the payment of money or other thing of value or under judicial orders or process, advertisement of the sale shall be made at least three (3) different times in some newspaper published in the county where the sale is to be made.
2. The first publication shall be at least twenty (20) days previous to the sale.
3. This section shall not apply where the amount of indebtedness for the payment of which the property being sold does not amount to more than two hundred dollars ($200), in which event the owner of the property may order that advertisement be made by written notices posted as provided in § 35-5-103, instead of by notices published in a newspaper.
4. Nothing in this section shall be construed as applying to any notice published in accordance with any contract entered into heretofore, and expressed in a mortgage, deed of trust or other legal instruments.
5. In any sale of land to foreclose a deed of trust, mortgage, or other lien securing the payment of money or other thing of value or under judicial orders of process, the trustee or other party that sells the property shall send to the debtor and any co-debtor a copy of the notice required in § 35-5-104. The notice shall be sent on or before the first date of publication provided in subsection (b) by registered or certified mail, return receipt requested. The notice shall be sent to the following:
   1. If to the debtor, addressed to the debtor at:
      1. The mailing address of the property, if any; and
      2. The last known mailing address of the debtor or any other mailing address of the debtor specifically designated for purposes of receiving notices provided at least thirty (30) days prior to the first publication date in written correspondence or written notice in accordance with the loan agreement from the debtor to the creditor, but only if the last known mailing address of the debtor or other mailing address designated by the debtor is different from the mailing address of the property; and
   2. If to a co-debtor, addressed to the co-debtor at the last known mailing address of the co-debtor or any other mailing address of the co-debtor specifically designated for purposes of receiving notices provided at least thirty (30) days prior to the first publication date in written correspondence or written notice in accordance with the loan agreement from the co-debtor to the creditor, but only if the last known mailing address of the co-debtor or other mailing address designated by the co-debtor is both different from the mailing address of the property and different from the mailing address of the debtor determined as provided in subdivision (e)(1)(B).
6. Unless postponement or adjournment is contractually prohibited, any sale hereunder may be adjourned and rescheduled one (1) or more times without additional newspaper publication, upon compliance with the following provisions:
   1. The sale must be held within one (1) year of the originally scheduled date;
   2. Each postponement or adjournment must be to a specified date and time, and must be announced at the date, time and location of each scheduled sale date;
   3. If the postponement or adjournment is for more than thirty (30) days, notice of the new date, time, and location must be mailed no less than (10) calendar days prior to the sale date via regular mail to the debtor and co-debtor; and
   4. Notice of the right to postpone or adjourn without additional newspaper publication shall not be required to be published in any newspaper publication.

Code 1858, § 2145 (deriv. Acts 1855-1856, ch. 83, § 1); Acts 1859-1860, ch. 60; Shan., § 3838; mod. Code 1932, § 7793; Acts 1943, ch. 123, § 1; mod. C. Supp. 1950, § 7793; Acts 1957, ch. 41, § 1; T.C.A. (orig. ed.), § 35-501; Acts 2006, ch. 801, § 10; 2008, ch. 743, § 1; 2011, ch. 505, § 2.

Compiler's Notes. Acts 2006, ch. 801,  § 1 provided that the act shall be known and may be cited as the “Tennessee Home Loan Protection Act of 2006.”

Cross-References. Advertising sales of land by execution, § 26-5-101.

Application to enjoin sale, title 29, ch. 23, part 2.

Certified mail in lieu of registered mail, § 1-3-111.

Court officer purchasing property sold through court, § 39-16-405.

Officer purchasing at own sale, misdemeanor, § 39-16-405.

Power of court to sell land, § 16-1-107.

Registration of decree, § 16-1-109.

Sales on execution, §§ 26-5-101 — 26-5-114.

Sheriff's duty to advertise, § 8-8-201.

Vesting of title by decree, § 16-1-108.

Warranty of title and covenant of seizin, § 16-1-110.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 282.

Pritchard on Wills and Administration of Estates (5th ed., Phillips and Robinson), § 895.

Tennessee Jurisprudence, 16 Tenn. Juris., Judicial Sales, §§ 8, 13; 19 Tenn. Juris., Mortgages and Deeds of Trust, § 52.

Law Reviews.

Simple Real Estate Foreclosures Made Complex: The Byzantine Tennessee Process (John A. Walker, Jr.), 62 Tenn. L. Rev. 231 (1995).

Tennessee and the Installment Land Contract: A Viable Alternative to the Deed of Trust, 21 Mem. St. U.L. Rev. 551 (1991).

Attorney General Opinions. Minimum requirements for publication and notice to be given to the owner of real property during a foreclosure, OAG 05-095 (6/14/05), 2005 Tenn. AG LEXIS 97.

The provisions of T.C.A. § 35-5-501 do not apply to delinquent tax sales, OAG 07-135 (9/12/07), 2007 Tenn. AG LEXIS 135.

35-5-102. Notice in newspaper not required.

If no newspaper is published in the county in which the land is to be sold, the advertisement in a newspaper is dispensed with, unless ordered by court.

Code 1858, § 2147 (deriv. Acts 1855-1856, ch. 83, § 2); Shan., § 3840; Code 1932, § 7795; T.C.A. (orig. ed.), § 35-502.

Law Reviews.

Power of Sale Foreclosure in Tennessee, 8 Mem. St. U.L. Rev. 871 (1978).

35-5-103. Posting written notices.

Whenever the advertisement cannot be made in a newspaper, the officer shall make publication of the sale for thirty (30) days by written notices posted in at least five (5) of the most public places in the county, one (1) of which shall be the courthouse door, and another in the neighborhood of the defendant; if of realty, in the civil district where the land lies.

Code 1858, § 2148 (deriv. Acts 1855-1856, ch. 83, § 3); Shan., § 3841; Code 1932, § 7796; Acts 1943, ch. 123, § 2; C. Supp. 1950, § 7796; T.C.A. (orig. ed.), § 35-503.

Cross-References. Notice of execution sale, §§ 26-5-101 — 26-5-103.

Textbooks. Pritchard on Wills and Administration of Estates (5th ed., Phillips and Robinson), § 895.

Tennessee Jurisprudence,  12 Tenn. Juris., Executions, § 36; 16 Tenn. Juris., Judicial Sales, §§ 8, 13; 19 Tenn. Juris., Mortgages and Deeds of Trust, § 52.

Law Reviews.

Power of Sale Foreclosure in Tennessee, 8 Mem. St. U.L. Rev. 871 (1978).

35-5-104. Contents of advertisement or notice — Contents of deed memorializing sale.

1. The advertisement or notice shall:
   1. Give the names of the plaintiff and defendant, or parties interested;
   2. Give a concise description of the land; such description shall include a legal description, which means a reference to the deed book and page that contains the complete legal description of the property, and common description, which means, if available, the street address and map and parcel number of the property. In the event no street address exists, a subdivision, lot or tract number may be used. A metes and bounds description may be, but is not required to be, included in the description of the land;
   3. Mention the time and place of sale;
   4. 1. Identify each and every lien or claimed lien of the United States with respect to which 26 U.S.C. § 7425(b) requires notice to be given to the United States in order for the sale of the land thus advertised not to be subject to the lien or claim of lien of the United States;
      2. For every lien or claim of lien of the United States so identified, affirmatively state that the notice required by 26 U.S.C. § 7425(b) to be given to the United States has been timely given;
      3. For every lien or claim of lien of the United States so identified, state that the sale of the land thus advertised will be subject to the right of the United States to redeem the land as provided for in 26 U.S.C. § 7425(d)(1);
   5. 1. Identify each and every lien or claimed lien of the state with respect to which § 67-1-1433(b)(1) requires notice to be given to the state in order for the sale of the land thus advertised not to be subject to the lien or claim of lien of the state;
      2. For every lien or claim of lien of the state so identified, affirmatively state that the notice required by § 67-1-1433(b)(1) to be given to the state has been timely given; and
      3. For every lien or claim of lien of the state so identified, state that the sale of the land thus advertised will be subject to the right of the state to redeem the land as provided for in § 67-1-1433(c)(1); and
   6. For each concise description of land, provide the corresponding names of the parties interested.
2. The deed memorializing the sale shall, in addition to any other requirements as may now or hereafter exist under the laws of the state with respect to the proper form of deeds, in order that they might qualify for recording in the various offices of registers of counties in this state, whenever subsection (a) has required notice to be given to the United States and/or to this state, state that the land described therein is conveyed subject to the rights of the United States to redeem the land as provided for in 26 U.S.C. § 7425(d)(1) and/or is subject to the right of this state to redeem the land as provided for in § 67-1-1433(c)(1), as appropriate, shall have attached to it, as exhibits, a copy of the notice thus provided to the United States, a copy of the written response of the United States to the notice thus provided, if any, a copy of the notice thus provided to the state, and a copy of the written response of the state to the notice thus provided, if any, as appropriate.
3. Nothing in this section shall be construed to require inclusion of a street address if it does not exist or is not in common use. Also, utilization of the street address, if any, which appears in the records of the assessor of property with respect to the property involved shall be conclusively presumed to be in compliance with this section.
4. For the purposes of this section, “parties interested” includes, without limitation, the record holders of any mortgage, deed of trust, or other lien that will be extinguished or adversely affected by the sale and which mortgage, deed of trust, or lien, or notice or evidence thereof, was recorded more than ten (10) days prior to the first advertisement or notice in the register's office of the county in which the real property is located. “Parties interested” also includes a person or entity named as nominee or agent of the owner of the obligation that is secured by the deed of trust and that is identifiable from information provided in the deed of trust, which shall include a mailing address or post office box of the nominee or agent.

Code 1858, § 2149 (deriv. Acts 1855-1856, ch. 83, § 1); Shan., § 3842; Code 1932, § 7797; Acts 1982, ch. 801, § 1; T.C.A. (orig. ed.), § 35-504; Acts 1992, ch. 621, § 1; 1994, ch. 618, § 1; 1999, ch. 66, § 1; 2011, ch. 505, § 1; 2015, ch. 213, §§ 1, 2.

Amendments. The 2015 amendment added (a)(6) and added the second sentence of (d).

Effective Dates. Acts 2015, ch. 213, § 4. July 1, 2015.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), §§ 277, 282.

Law Reviews.

Power of Sale Foreclosure in Tennessee, 8 Mem. St. U.L. Rev. 871 (1978).

35-5-105. Notice in writing if printer refuses.

If the printer will not make the publication for the rates provided in § 8-21-1301, the officer or person conducting the sale shall make publication by written notices as provided in §§ 35-5-103 and 35-5-104.

Code 1858, § 2151 (deriv. Acts 1855-1856, ch. 83, § 3); Shan., § 3844; Code 1932, § 7799; T.C.A. (orig. ed.), § 35-506.

Textbooks. Tennessee Jurisprudence, 16 Tenn. Judicial Sales, § 8.

Law Reviews.

Power of Sale Foreclosure in Tennessee, 8 Mem. St. U.L. Rev. 871 (1978).

35-5-106. Sale without advertisement is not void.

Should the officer, or other person making the sale, proceed to sell without pursuing the provisions of this chapter, the sale shall not, on that account, be either void or voidable.

Code 1858, § 2152 (deriv. Acts 1855-1856, ch. 83, § 4); Shan., § 3845; Code 1932, § 7800; T.C.A. (orig. ed.), § 35-507.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 282.

Pritchard on Wills and Administration of Estates (5th ed., Phillips and Robinson), §§ 741, 895.

Tennessee Jurisprudence, 16 Tenn. Juris., Judicial Sales, §§ 8, 13.

Law Reviews.

Power of Sale Foreclosure in Tennessee, 8 Mem. St. U.L. Rev. 871 (1978).

35-5-107. Effect of noncompliance with chapter.

Any officer, or other person, referenced in § 35-5-106 who fails to comply with this chapter commits a Class C misdemeanor and is, moreover, liable to the party injured by the noncompliance, for all damages resulting from the failure.

Code 1858, § 2153 (deriv. Acts 1855-1856, ch. 83, § 5); Shan., § 3846; Code 1932, § 7801; T.C.A. (orig. ed.), § 35-508; Acts 1989, ch. 591, § 113.

Cross-References. Penalty for Class C misdemeanor, § 40-35-111.

Textbooks. Tennessee Jurisprudence, 19 Tenn. Juris., Mortgages and Deeds of Trust, § 59.

Law Reviews.

Power of Sale Foreclosure in Tennessee, 8 Mem. St. U.L. Rev. 871 (1978).

35-5-108. Plan of division of land — Sale of portion of land.

At any time before ten o'clock a.m. (10:00 a.m.) on the day of sale, the defendant or other person whose property is to be sold may deliver to the officer or person making the sale, a plan of division of the lands to be sold, subscribed by the defendant or other person, bearing a date subsequent to the date of advertisement, in which case so much of the land as may be necessary to satisfy the debt and costs, and no more, shall be sold according to the plan furnished. If no such plan is furnished, the land may be sold without division.

Code 1858, § 2154 (deriv. Acts 1799, ch. 14, § 3); Shan., § 3847; Code 1932, § 7802; T.C.A. (orig. ed.), § 35-509.

Cross-References. Defendant dividing lands in execution sales, § 26-5-105.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 463.

Tennessee Jurisprudence, 19 Tenn. Juris., Mortgages and Deeds of Trust, § 59.

Law Reviews.

Power of Sale Foreclosure in Tennessee, 8 Mem. St. U.L. Rev. 871 (1978).

35-5-109. Published ending time and published start time for auctions.

The published ending time for auctions conducted under this chapter on an internet-based bidding platform and the published start time for an in-person auction must be between the hours of nine o'clock a.m. (9:00 a.m.) and seven o'clock p.m. (7:00 p.m.) of the day fixed in the notice or advertisement. The day fixed may be any day Monday through Saturday, but must not be fixed on a state or federal legal holiday. However, this section does not apply to sales of parcels pursuant to title 67, chapter 5.

Code 1858, § 2155 (deriv. Acts 1807, ch. 99, § 1); Shan., § 3848; Code 1932, § 7803; T.C.A. (orig. ed.), § 35-510; Acts 2014, ch. 912, § 3; 2015, ch. 414, § 1; 2017, ch. 187, § 2; 2019, ch. 471, § 1.

Amendments. The 2015 amendment added the third sentence.

The 2017 amendment substituted “between the hours of nine o'clock a.m. (9:00 a.m.) and seven o'clock p.m. (7:00 p.m.)” for “between the hours of ten o'clock a.m. (10:00 a.m.) and four o'clock p.m. (4:00 p.m.)” in the first sentence.

The 2019 amendment rewrote the section which read: “The sale in all these cases shall be made between the hours of nine o'clock a.m. (9:00 a.m.) and seven o'clock p.m. (7:00 p.m.) of the day fixed in the notice or advertisement. The day fixed may be any day Monday through Saturday, but shall not be fixed on a state or federal legal holiday. However, this requirement shall not be applicable to sales of parcels pursuant to title 67, chapter 5.”

Effective Dates. Acts 2015, ch. 414, § 29. May 8, 2015.

Acts 2017, ch. 187, § 3. April 19, 2017.

Acts 2019, ch. 471, § 21. July 1, 2019.

Cross-References. Hours of sale, § 26-5-104.

Textbooks. Pritchard on Wills and Administration of Estates (5th ed., Phillips and Robinson), § 895.

35-5-110. Bidding on land sales may be reopened by clerks — Court's power not abridged.

In all sales of land made under orders, and decrees of the circuit, probate, chancery, appeals and supreme courts where an advance bid of as much as ten percent (10%) of the original bid is made, the clerk, or clerk and master, of the court is empowered, at no additional fee, commission or cost, to accept the advance bid and reopen the biddings on the sale, and to receive additional bids, and to hold the sale open for advance bids to some day by the officer designated, and give the purchaser and the parties, or their attorneys of record, notice of the reopening of the biddings, and to report this action to the court for confirmation without any order or decree of the court authorizing the reopening first being had, unless the court's order or decree for the sale of the land specifically prohibits the acceptance of an advance bid; provided, that nothing in this section shall be construed as abridging the rights and jurisdiction of the court to reopen the biddings on such terms as the court may deem right.

Acts 1899, ch. 37, § 1; Shan., § 3848a1; mod. Code 1932, § 7804; T.C.A. (orig. ed.), § 35-511; Acts 2014, ch. 930, § 1.

Textbooks. Tennessee Jurisprudence, 16 Tenn. Juris., Judicial Sales, § 29.

Law Reviews.

Power of Sale Foreclosure in Tennessee, 8 Mem. St. U.L. Rev. 871 (1978).

35-5-111. State may bid at execution or judicial sales.

Whenever the state is interested in the proceeds of any execution sale or any judicial sale, to any extent whatsoever, the state, acting through its attorney general and reporter, may bid on and buy in property either real or personal, at that sale, to the same extent as any natural person might do. Any sums due and payable on behalf of the state, as costs of sale or as a part of the purchase price of the property so bid in and paid by the state, shall be paid out of the general fund of the state treasury upon the warrant of the governor.

Acts 1943, ch. 11, § 1; C. Supp. 1950, § 7804.1; T.C.A. (orig. ed.), § 35-512.

35-5-112. Auctioneer services and fee — Manner and method of sale of real property at discretion of court.

1. Whenever real or personal property is to be sold at public sale under any order or decree of any court in this state, the court, judge or chancellor under whose jurisdiction the sale is to be made has the discretionary authority to secure the services of an auctioneer licensed in this state to conduct the public sale and to fix the auctioneer's fee, the fee to be not more than eight percent (8%) of the sale price on sales of real property and not more than ten percent (10%) of the sale price on sales of personal property, these fees not to include the expenses of sales, and to order the fee to be paid out of the proceeds of the sale.
2. Whenever real property is sold at a public sale conducted by an auctioneer, the manner and method of sale is at the discretion of the court. As used in this section, “public sale” includes auctions on internet-based bidding platforms, in-person, on-site, or off-site auctions, and other accepted auction methods, so long as the auctions are open for participation by the public at large. The court, in its discretion, may impose additional conditions or procedures upon the sale of property as are reasonably necessary.
3. If the clerk of the court or clerk and master is also a licensed auctioneer, then the clerk or clerk and master shall receive fees in that person's capacity as clerk, or clerk and master, or special commissioner, and shall not receive any extra fee as a licensed auctioneer.

Acts 1975, ch. 334, §§ 1, 2; 1976, ch. 772, § 1; 1978, ch. 769, § 1; T.C.A., §§ 35-513, 35-514; Acts 2011, ch. 320, § 1; 2015, ch. 414, § 2; 2019, ch. 471, § 2.

Amendments. The 2015 amendment added the second sentence of (b).

The 2019 amendment rewrote (b) which read: “Whenever real property is sold at a public sale conducted by an auctioneer, the sale shall be conducted on the real property to be sold. This subsection (b) shall not be applicable to sales of parcels pursuant to title 67, chapter 5.”

Effective Dates. Acts 2015, ch. 414, § 29. May 8, 2015.

Acts 2019, ch. 471, § 21. July 1, 2019.

35-5-113. Auction sales in divorce proceedings.

The provisions and procedures of this chapter apply to all auction sales of property ordered by a court pursuant to § 36-4-121, to accomplish the equitable division of property in divorce cases. The court, in its discretion, may impose any additional conditions or procedures upon the sale of property in divorce cases as are reasonably designed to ensure that the property is sold for its fair market value.

Acts 1986, ch. 722, § 1.

35-5-114. Trustee's attendance at foreclosure — Successor trustee.

1. In any sale of land to foreclose a deed of trust, mortgage, or other lien securing the payment of money or other thing of value, the trustee or person or entity holding a similar position may attend the foreclosure either in person or by an agent. If the trustee attends by an agent, the agent may receive bids and conduct the sale on behalf of the trustee. The trustee shall execute any applicable trustee's deed or similar conveyance instrument. The appointment of an agent by a trustee need not be by written instrument, nor is there any recording required relative to the appointment.
2. 1. The beneficiary may, unless the deed of trust contains specific language to the contrary, appoint a successor trustee at any time by filing a substitution of trustee for record with the register of deeds of the county in which the property is situated.
   2. The substitute trustee or its delegate shall succeed to all the power, duties, authority and title of the original trustee and any previous successor trustee or delegatee.
   3. 1. In the event the substitution of trustee is not recorded prior to the first date of publication by the substitute trustee, the beneficiary shall include in the substitution of trustee instrument, which shall be recorded prior to the deed evidencing sale, the following statement:

         Beneficiary has appointed the substitute trustee prior to the first notice of publication as required by T.C.A. § 35-5-101 and ratifies and confirms all actions taken by the substitute trustee subsequent to the date of substitution and prior to the recording of this substitution.

      2. Once a substitution of trustee instrument containing the statement set forth in subdivision (b)(3)(A) is timely recorded, it shall act as conclusive proof as a matter of law that the substitute trustee has been timely appointed and has acted with authority of the beneficiary.
3. A substitution of trustee shall be recorded prior to any sale, and no action may be instituted against any person who, acting in good faith without knowledge to the contrary, relies upon the validity of the substitution of trustee or written statements by the beneficiary or substitute trustee as to the authority of the substitute trustee.
4. If the name of the substitute trustee is not included in the first publication, then, not less than ten (10) business days prior to the sale date, the substitute trustee shall send notice by registered or certified mail to the debtor or any co-debtor, as provided in § 35-5-101, and to any interested parties, giving the name and address of the substitute trustee. If the trustee is not a resident of this state, the notice shall include the name and address of a registered agent of the substitute trustee who is located in the state. Record notice of the mailing provided in this subsection (d) shall be evidenced by the substitute trustee's recordation of an affidavit recorded prior to the deed evidencing the sale or by recitation on the substitute trustee's deed.

Acts 1993, ch. 415, § 1; 2006, ch. 951, § 1.

Compiler's Notes. This section was originally designated as § 35-5-124, but has been redesignated as § 35-5-114.

Cross-References. Certified mail in lieu of registered mail, § 1-3-111.

35-5-115. Discovery proceedings for nonresidents.

1. 1. IF a nonresident creditor holds indebtedness secured by residential real property that is located in this state and owned by a state resident, OR
   2. IF a nonresident trustee or agent is involved in foreclosure proceedings relative to residential real property that is located in this state and owned by a resident,
   3. THEN all discovery proceedings, including, but not limited to, the production of requested documents and the deposition of witnesses, shall be conducted in the county in which the residential real estate is located or in which the litigation is pending.
2. The court in which such litigation is pending may make orders consistent with the purposes of this section to prevent undue burden on any party.

Acts 2003, ch. 174, § 1.

35-5-116. Trustee as necessary party.

1. Any trustee named in a suit or proceeding, as related to a sale of real property under a trust deed or mortgage, may plead in the answer that the trustee is not a necessary party by a verified denial, stating the basis for the trustee's reasonable belief that the trustee was named as a party solely in the capacity as a trustee under a deed of trust, contract lien, or security instrument.
2. Within thirty (30) days after the filing of the trustee's verified denial, a verified response is due from all parties to the suit or proceeding setting forth all matters, whether in law or fact, that rebut the trustee's verified denial.
3. If a party has no objection or fails to file a timely verified response to the trustee's verified denial, the trustee shall be dismissed from the suit or proceeding without prejudice.
4. If a respondent files a timely verified response to the trustee's verified denial, the matter shall be set for hearing. The court shall dismiss the trustee from the suit or proceeding without prejudice, if the court determines that the trustee is not a necessary party.
5. A dismissal of the trustee pursuant to subsections (c) and (d) shall not prejudice a party's right to seek injunctive relief to prevent the trustee from proceeding with a foreclosure sale.
6. A trustee shall not be liable for any good faith error resulting from reliance on any information in law or fact provided by the borrower or secured party or their respective attorney, agent, or representative or other third party.

Acts 2006, ch. 811, § 1.

35-5-117. [Repealed.]

Acts 2010, ch. 834, § 1; 2011, ch. 122, §§ 1-4; repealed by Acts 2011, ch. 122, § 4, effective January 1, 2013.

Compiler's Notes. Former section 35-5-117, concerned legal notices of foreclosure.

35-5-118. Deficiency judgment sufficient to fully satisfy indebtedness on real property after trustee's or foreclosure sale.

1. In an action brought by a creditor to recover a balance still owing on an indebtedness after a trustee's or foreclosure sale of real property secured by a deed of trust or mortgage, the creditor shall be entitled to a deficiency judgment in an amount sufficient to satisfy fully the indebtedness.
2. In all such actions, absent a showing of fraud, collusion, misconduct, or irregularity in the sale process, the deficiency judgment shall be for the total amount of indebtedness prior to the sale plus the costs of the foreclosure and sale, less the fair market value of the property at the time of the sale. The creditor shall be entitled to a rebuttable prima facie presumption that the sale price of the property is equal to the fair market value of the property at the time of the sale.
3. To overcome the presumption set forth in subsection (b), the debtor must prove by a preponderance of the evidence that the property sold for an amount materially less than the fair market value of property at the time of the foreclosure sale. If the debtor overcomes the presumption, the deficiency shall be the total amount of the indebtedness prior to the sale plus the costs of the foreclosure and sale, less the fair market value of the property at the time of the sale as determined by the court.
4. 1. Any action for a deficiency judgment under this section shall be brought not later than the earlier of:
      1. Two (2) years after the date of the trustee's or foreclosure sale, exclusive of any period of time in which a petition for bankruptcy is pending; or
      2. The time for enforcing the indebtedness as provided for under §§ 28-1-102 and 28-2-111.
   2. Nothing contained in this section shall be construed as limiting a person entitled to bring such action from electing to sue on an indebtedness in lieu of, prior to, or contemporaneously with enforcement of a deed of trust or mortgage.

Acts 2010, ch. 1001, § 1.

Code Commission Notes.

Acts 2010, ch. 1001, § 1 purported to enact new § 35-5-117; however, § 35-5-117 was previously enacted by Acts 2010, ch. 834, and the section was redesignated as § 35-5-118 by the code commission.

Compiler's Notes. Acts 2010, ch. 1001, § 2 provided that the act, which enacted § 35-5-118, shall apply to all trustee or foreclosure sales of real property secured by a deed of trust for which the first foreclosure publication is given on or after September 1, 2010.

35-5-119. Applicability of §§ 35-5-101(e), 35-5-104(a)(4) and (5), and 35-5-104(b).

The requirements of §§ 35-5-101(e), 35-5-104(a)(4) and (5), and 35-5-104(b) shall not be applicable to sales of parcels pursuant to title 67, chapter 5.

Acts 2015, ch. 414, § 3.

Effective Dates. Acts 2015, ch. 414, § 29. May 8, 2015.

Part 1
Definitions and Fiduciary Duties

35-7-101. Short title.

This chapter shall be known and may be cited as the “Tennessee Uniform Transfers to Minors Act.”

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-201.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

Cross-References. Gift tax, title 67, ch. 8, part 1.

Persons 18 years of age or older have the same rights, duties and responsibilities as a person of 21 years of age or older, § 1-3-113.

Textbooks. Pritchard on Wills and Administration of Estates (5th ed., Phillips and Robinson), § 1026.

Tennessee Forms (Robinson, Ramsey and Harwell), No. 4-614.

Tennessee Jurisprudence.  18 Tenn. Juris., Minors, § 2.

Law Reviews.

Confused by tax reforms? Follow these 10 key rules for better estate planning in Tennessee (Dan W. Holbrook), 37 No. 8 Tenn. B.J. 12 (2001).

The Uniform Gifts to Minors Act: A Patent Ambiguity (Margaret M. Mahoney), 34 Vand. L. Rev. 495 (1981).

Where There's a Will: The 95% family-owned test for family limited partnerships (Dan Holbrook), 37 No. 1 Tenn. B.J. 31 (2001).

Collateral References.

Construction and Effect of Uniform Gifts to Minors Act. 50 A.L.R.3d 528.

35-7-102. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

1. “Adult” means an individual who has attained twenty-one (21) years of age;
2. “Benefit plan” means an employer's plan for the benefit of an employee or partner;
3. “Broker” means a person lawfully engaged in the business of effecting transactions in securities or commodities for the person's own account or for the account of others;
4. “Court” means the chancery, probate and juvenile courts and other courts having probate jurisdiction, which shall have concurrent jurisdiction under this chapter;
5. “Custodial property” means:
   1. Any interest in property transferred to a custodian under this chapter; and
   2. The income from and proceeds of that interest in property;
6. “Custodian” means a person so designated, including a person designated as a joint custodian pursuant to § 35-7-111, or a successor or substitute custodian designated according to this chapter;
7. “Financial institution” means a bank, trust company, savings institution, or credit union, chartered and supervised under state or federal law;
8. “Guardian” means a person appointed by or qualified in a court to act as a general, limited, or temporary guardian or conservator of a minor's property or person or a person legally authorized to perform substantially the same functions;
9. “Legal representative” means an individual's personal representative, guardian or conservator;
10. “Member of the minor's family” means the minor's parent, stepparent, spouse, grandparent, brother, sister, uncle, or aunt, whether of the whole or half blood or by adoption;
11. “Minor” means an individual who has not attained twenty-one (21) years of age, although the minor may already be of legal age;
12. “Person” means an individual, corporation, organization, or other legal entity;
13. “Personal representative” means an executor, administrator, successor personal representative, or special administrator of a decedent's estate or a person legally authorized to perform substantially the same functions;
14. “Qualified minor’s trust” means any trust, including a trust created by the custodian, that satisfies the requirements of federal Internal Revenue Code § 2503(c) (26 U.S.C. § 2503(c)), and the regulations implementing that section;
15. “State” includes any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession subject to the legislative authority of the United States;
16. “Transfer” means a transaction that creates custodial property under this chapter;
17. “Transferor” means a person who makes a transfer under this chapter; and
18. “Trust company” means a financial institution, corporation, or other legal entity, authorized to exercise general trust powers.

Acts 1992, ch. 664, § 1; 1996, ch. 593, § 1; T.C.A. § 35-7-202; Acts 2007, ch. 8, § 11.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-103. Scope and jurisdiction.

1. This chapter applies to a transfer made on or after October 1, 1992, that refers to this chapter in the designation by which the transfer is made, if at the time of the transfer, the transferor, the minor, or the custodian is a resident of this state or the custodial property is located in this state. The custodianship so created remains subject to this chapter despite a subsequent change in residence of a transferor, the minor, or the custodian, or the removal of custodial property from this state.
2. A person designated as custodian under this chapter is subject to personal jurisdiction in this state with respect to any matter relating to the custodianship.
3. A transfer that purports to be made and that is valid under the Uniform Transfers to Minors Act, the Uniform Gifts to Minors Act, or substantially similar act, of another state is governed by the law of the designated state and may be executed and is enforceable in this state, if at the time of the transfer, the transferor, the minor, or the custodian is a resident of the designated state or the custodial property is located in the designated state.
4. This chapter shall not be construed as an exclusive method for making gifts or other transfers to minors.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-203.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-104. Nomination of custodian.

1. A person having the right to designate the recipient of property transferable upon the occurrence of a future event may revocably nominate a custodian to receive the property for a minor beneficiary upon the occurrence of the event by naming the custodian followed in substance by the words “as custodian for  (name of minor) under the Tennessee Uniform Transfers to Minors Act.” The nomination may name one (1) or more persons as substitute custodians to whom the property must be transferred, in the order named, if the first nominated custodian dies before the transfer or is unable, declines, or is ineligible to serve. The nomination may be made in a will, a trust, a deed, an instrument exercising a power of appointment, or in a writing designating a beneficiary of contractual rights which is registered with or delivered to the payor, issuer, or other obligor of the contractual rights.
2. A custodian nominated under this section must be a person to whom a transfer of property of that kind may be made under § 35-7-110(a).
3. The nomination of a custodian under this section does not create custodial property until the nominating instrument becomes irrevocable or a transfer to the nominated custodian is completed. Unless the nomination of a custodian has been revoked, upon the occurrence of the future event, the custodianship becomes effective and the custodian shall enforce a transfer of the custodial property pursuant to § 35-7-110.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-204.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-105. Transfer by gift or exercise of power of appointment.

A person may make a transfer by irrevocable gift to, or the irrevocable exercise of a power of appointment in favor of, a custodian for the benefit of a minor pursuant to § 35-7-110.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-205.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-106. Transfer authorized by will or trust.

1. A personal representative or trustee may make an irrevocable transfer pursuant to § 35-7-110, to a custodian for the benefit of a minor as authorized in the governing will or trust or by a judicial order.
2. If the testator or settlor has nominated a custodian under § 35-7-104, to receive the custodial property, the transfer must be made to that person.
3. If the testator or settlor has not nominated a custodian or all persons so nominated as custodian die before the transfer or are unable, decline, or are ineligible to serve, the personal representative or the trustee, as the case may be, shall designate the custodian from among those eligible to serve as custodian for property of that kind under § 35-7-110(a).

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-206.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-107. Other transfer by fiduciary.

1. Subject to subsection (c), a personal representative or trustee may make an irrevocable transfer to another adult or trust company as custodian for the benefit of a minor pursuant to § 35-7-110, in the absence of a will or under a will or trust that does not contain an authorization to do so.
2. Subject to subsection (c), a guardian may make an irrevocable transfer to another adult or trust company as custodian for the benefit of the minor pursuant to § 35-7-110.
3. A transfer under subsection (a) or (b) may be made only if:
   1. The personal representative, trustee, or guardian considers the transfer to be in the best interest of the minor;
   2. The transfer is not prohibited by or inconsistent with provisions of the applicable will, trust agreement, or other governing instrument; and
   3. The transfer is authorized by the court if it exceeds twenty-five thousand dollars ($25,000) in value.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-207.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-108. Transfer by obligor.

1. Subject to subsections (b) and (c), a person not subject to § 35-7-106 or § 35-7-107, who holds property of, or owes a liquidated debt or judgment to, a minor not having a guardian may make an irrevocable transfer to a custodian for the benefit of the minor pursuant to § 35-7-110.
2. If a person having the right to do so under § 35-7-104 has nominated a custodian under this chapter to receive the custodial property, the transfer must be made to that person.
3. If no custodian has been nominated, or all persons so nominated as custodian die before the transfer or are unable, decline, or are ineligible to serve, a transfer under this section may be made to an adult member of the minor's family or to a trust company unless the property exceeds twenty-five thousand dollars ($25,000) in value. If the transfer exceeds twenty-five thousand dollars ($25,000) in value, it may be made only if it is authorized by the court.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-208.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-109. Receipt for custodial property.

A written acknowledgment of delivery by a custodian constitutes a sufficient receipt and discharge for custodial property transferred to the custodian pursuant to this chapter.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-209.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-110. Manner of creating custodial property and effecting transfer — Designation of initial custodian — Control.

1. Custodial property is created and a transfer is made whenever:
   1. An uncertificated security or a certificated security in registered form is either:
      1. Registered in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words “as custodian for  (name of minor) under the Tennessee Uniform Transfers to Minors Act”; or
      2. Delivered if in certificated form, or any document necessary for the transfer of an uncertificated security is delivered, together with any necessary endorsement to an adult other than the transferor or to a trust company as custodian, accompanied by an instrument in substantially the form set forth in subsection (b);
   2. Money is paid or delivered, or a security held in the name of a broker, financial institution, or its nominee is transferred, to a broker or financial institution for credit to an account in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: “as custodian for  (name of minor) under the Tennessee Uniform Transfers to Minors Act”;
   3. The ownership of a life or endowment insurance policy or annuity contract is either:
      1. Registered with the issuer in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: “as custodian for  (name of minor) under the Tennessee Uniform Transfers to Minors Act”; or
      2. Assigned in a writing delivered to an adult other than the transferor or to a trust company whose name in the assignment is followed in substance by the words: “as custodian for  (name of minor) under the Tennessee Uniform Transfers to Minors Act”;
   4. An irrevocable exercise of a power of appointment or an irrevocable present right to future payment under a contract is the subject of a written notification delivered to the payor, issuer, or other obligor that the right is transferred to the transferor, an adult other than the transferor, or a trust company, whose name in the notification is followed in substance by the words: “as custodian for  (name of minor) under the Tennessee Uniform Transfers to Minors Act”;
   5. A deed for an interest in real property is recorded in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: “as custodian for  (name of minor) under the Tennessee Uniform Transfers to Minors Act”;
   6. A certificate of title issued by a department or agency of a state or of the United States which evidences title to tangible personal property is either:
      1. Issued in the name of the transferor, an adult other than the transferor, or a trust company followed in substance by the words “as custodian for  (name of minor) under the Tennessee Uniform Transfers to Minors Act”; or
      2. Delivered to an adult other than the transferor or to a trust company, endorsed to that person followed in substance by the words “as custodian for  (name of minor) under the Tennessee Uniform Transfers to Minors Act”; or
   7. An interest in any property not described in subdivisions (a)(1)-(6) is transferred to an adult other than the transferor or to a trust company by a written instrument in substantially the form set forth in subsection (b).
2. An instrument in the following form satisfies the requirements of subdivisions (a)(1)(B) and (7):

   TRANSFER UNDER THE TENNESSEE UNIFORM TRANSFERS TO MINORS ACT I,   (name of transferor or name and representative capacity if a fiduciary) hereby transfer to  (name of custodian) , as custodian for  (name of minor) , under the Tennessee Uniform Transfers to Minors Act, the following:  (insert a description of the custodial property sufficient to identify it). Dated  (Signature) (name of custodian)  acknowledges receipt of the property described above as custodian for the minor named above under the Tennessee Uniform Transfers to Minors Act. Dated  (Signature of Custodian)

   Click to view form.

3. As an alternative to the form of transfer set out in subdivisions (a)(1)-(6), custodial property may be registered, held, recorded or otherwise created in the name of the minor, followed in substance by the words “minor, by  (name of custodian or custodians) under the Tennessee Uniform Transfers to Minors Act”.
4. A transferor shall place the custodian in control of the custodial property as soon as practicable.

Acts 1992, ch. 664, § 1; 1996, ch. 593, § 2; T.C.A. § 35-7-210.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-111. Transfers — Single and joint custodians.

A transfer may be made only for one (1) minor, and up to two (2) persons may be the custodians. All custodial property held under this chapter by the same custodian or custodians for the benefit of the same minor constitutes a single custodianship. If more than one (1) person is appointed a custodian, such persons shall act as joint custodians under this chapter and, unless specified in any document creating the custodial property, each joint custodian shall have full power and authority to act alone with respect to the custodial property. If either joint custodian resigns, dies, becomes incapacitated or is removed, then the remaining one (1) of them may serve as sole custodian without the necessity of appointing a successor joint custodian.

Acts 1992, ch. 664, § 1; 1996, ch. 593, § 3; T.C.A. § 35-7-211.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-112. Validity and effect of transfer.

1. The validity of a transfer made in a manner prescribed in this chapter is not affected by:
   1. Failure of the transferor to comply with sections hereof concerning possession and control;
   2. Designation of an ineligible custodian, except designation of the transferor in the case of property for which the transferor is ineligible to serve as custodian under this chapter; or
   3. Death or incapacity of a person nominated or designated as custodian or the written disclaimer of the office by that person.
2. A transfer made pursuant to this chapter is irrevocable, and the custodial property is indefeasibly vested in the minor, but the custodian has all the rights, powers, duties, and authority provided in this chapter, and neither the minor nor the minor's legal representative has any right, power, duty, or authority with respect to the custodial property except as provided in this chapter.
3. By making a transfer, the transferor incorporates in the disposition all the provisions of this chapter and grants to the custodian, and to any third person dealing with a person designated as custodian, the respective powers, rights, and immunities provided in this chapter.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-212.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-113. Care of custodial property.

1. A custodian shall:
   1. Take control of custodial property;
   2. Register or record title to custodial property, except tangible personal property of a type for which registration or recording of title is not required under Tennessee law; and
   3. Collect, hold, manage, invest, and reinvest custodial property.
2. In dealing with custodial property, a custodian shall observe the standard of care that would be observed by a prudent person dealing with property of another and is not limited by any other statute restricting investments by fiduciaries. If a custodian has a special skill or expertise or is named custodian on the basis of representations of a special skill or expertise, the custodian shall use that skill or expertise. However, a custodian, in the custodian's discretion and without liability to the minor or the minor's estate, may retain any custodial property received from a transferor.
3. A custodian may invest in or pay premiums on life insurance or endowment policies on:
   1. The life of the minor only if the minor or the minor's estate is the sole beneficiary; or
   2. The life of another person in whom the minor has an insurable interest;

      only to the extent that the minor, the minor's estate, or the custodian in the capacity of custodian, is the irrevocable beneficiary.

4. A custodian at all times shall keep custodial property separate and distinct from all other property in a manner sufficient to identify it clearly as custodial property of the minor. Custodial property consisting of an undivided interest is so identified if the minor's interest is held as a tenant in common and is fixed. Custodial property subject to recordation is so identified if it is recorded, and custodial property subject to registration is so identified if it is either registered or held in an account designated in the name of the custodian, followed in substance by the words “as a custodian for (name of minor) under the Tennessee Uniform Transfers to Minors Act.”
5. A custodian shall keep records of all transactions with respect to custodial property, including information necessary for the preparation of the minor's tax returns, and shall make them available for inspection at reasonable intervals by a parent or legal representative of the minor or by the minor if the minor has attained fourteen (14) years of age.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-213.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-114. Powers of custodian.

1. A custodian, acting in a custodial capacity, has all the rights, powers, and authority over custodial property that unmarried adult owners have over their own property, but a custodian may exercise those rights, powers, and authority in that capacity only.
2. This section does not relieve a custodian from liability for breach of duties of care under § 35-7-113.
3. The custodian is authorized to invest some or all of the custodial property in the Internal Revenue Code Section 529 plan, if the custodian determines the investment to be in the best interest of the minor.

Acts 1992, ch. 664, § 1; 2005, ch. 99, § 7; T.C.A. § 35-7-214.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

The full citation for Internal Revenue Code Section 529, referred to in this section, is 26 U.S.C. § 529.

35-7-115. Use of custodial property.

1. A custodian may deliver or pay to the minor or expend for the minor's benefit so much of the custodial property as the custodian considers advisable for the use and benefit of the minor, without court order and without regard to:
   1. The duty or ability of the custodian personally or of any other person to support the minor; or
   2. Any other income or property of the minor which may be applicable or available for that purpose.
2. On petition of an interested person or the minor, if the minor has attained fourteen (14) years of age, the court may order the custodian to deliver or pay to the minor or expend for the minor's benefit so much of the custodial property as the court considers advisable for the use and benefit of the minor.
3. A delivery, payment, or expenditure under this section is in addition to, not in substitution for, and does not affect any obligation of a person to support the minor.

Acts 1992, ch. 664, § 1;; T.C.A. § 35-7-215.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-116. Custodian's expenses, compensation, and bond.

1. A custodian is entitled to reimbursement from custodial property for reasonable expenses incurred in the performance of the custodian's duties.
2. Except for one who is a transferor under § 35-7-105, a custodian has a non-cumulative election during each calendar year to charge reasonable compensation for services performed during that year.
3. Except as provided in § 35-7-119(f), a custodian need not give a bond.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-216.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-117. Exemption of third person from liability.

A third person in good faith and without court order may act on the instructions of or otherwise deal with any person purporting to make a transfer or purporting to act in the capacity of a custodian and, in the absence of knowledge, is not responsible for determining:

1. The validity of the purported custodian's designation;
2. The propriety of, or the authority under this chapter for, any act of the purported custodian;
3. The validity or propriety under this chapter of any instrument or instructions executed or given either by the person purporting to make a transfer or by the purported custodian; or
4. The propriety of the application of any property of the minor delivered to the purported custodian.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-217.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-118. Liability to third persons.

1. A claim based on:
   1. A contract entered into by a custodian acting in a custodial capacity;
   2. An obligation arising from the ownership or control of custodial property; or
   3. A tort committed during the custodianship;

      may be asserted against the custodial property by proceeding against the custodian in the custodial capacity, whether or not the custodian or the minor is personally liable therefor.

2. A custodian is not personally liable:
   1. On a contract properly entered into in the custodial capacity unless the custodian fails to reveal that capacity and to identify the custodianship in the contract; or
   2. For an obligation arising from control of custodial property or for a tort committed during the custodianship unless the custodian is personally at fault.
3. A minor is not personally liable for an obligation arising from ownership of custodial property or for a tort committed during the custodianship unless the minor is personally at fault.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-218.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-119. Renunciation, resignation, death, or removal of custodian — Designation of successor custodian.

1. A person nominated under § 35-7-104, or designated under § 35-7-110, as custodian may decline to serve by delivering a written disclaimer to the person who made the nomination or to the transferor or the transferor's legal representative. If the event giving rise to a transfer has not occurred and no substitute custodian able, willing and eligible to serve was nominated, the person who made the nomination may nominate a substitute custodian; otherwise, the transferor or the transferor's legal representative shall designate a substitute custodian at the time of the transfer, in either case from among the persons eligible to serve as custodian for that kind of property. The custodian so designated has the rights of a successor custodian.
2. A custodian at any time may designate a trust company or an adult other than a transferor under this chapter as successor custodian by executing and dating an instrument of designation before a subscribing witness other than the successor. If the instrument of designation does not contain or is not accompanied by the resignation of the custodian, the designation of the successor does not take effect until the custodian resigns, dies, becomes incapacitated, or is removed.
3. A custodian may resign at any time by delivering written notice to the minor if the minor has attained fourteen (14) years of age and to the successor custodian and by delivering the custodial property to the successor custodian.
4. If a custodian is ineligible, dies, or becomes incapacitated without having effectively designated a successor and the minor has attained fourteen (14) years of age, the minor may designate as a successor custodian, in the manner prescribed in subsection (b), an adult member of the minor's family, a guardian or conservator of the minor, or a trust company. If the minor has not attained fourteen (14) years of age or fails to act within sixty (60) days after the ineligibility, death, or incapacity, the guardian of the minor becomes successor custodian. If the minor has no guardian or the guardian declines to act, the transferor, the legal representative of the transferor or of the custodian, an adult member of the minor's family, or any other interested person may petition the court to designate a successor custodian.
5. A custodian who declines to serve under subsection (a) or resigns under subsection (c), or the legal representative of a deceased or incapacitated custodian, as soon as practicable, shall put the custodial property and records in the possession and control of the successor custodian. The successor custodian by action may enforce the obligation to deliver custodial property and records and becomes responsible for each item as received.
6. A transferor, the legal representative of a transferor, an adult member of the minor's family, a guardian or conservator of the person or property of the minor, or the minor if the minor has attained fourteen (14) years of age may petition the court to remove the custodian for cause and to designate a successor custodian other than a transferor under § 35-7-105, or to require the custodian to give appropriate bond.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-219.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-120. Accounting by and determination of liability of custodian.

1. A minor who has attained fourteen (14) years of age, the minor's guardian or conservator of the person or legal representative, an adult member of the minor's family, a transferor, or a transferor's legal representative may petition the court:
   1. For an accounting by the custodian or the custodian's legal representative; or
   2. For a determination of responsibility, as between the custodial property and the custodian personally, for claims against the custodial property unless the responsibility has been adjudicated in an action under § 35-7-118, to which the minor or the minor's legal representative was a party.
2. A successor custodian may petition the court for an accounting by the predecessor custodian.
3. The court, in a proceeding under this chapter or in any other proceeding, may require or permit the custodian or the custodian's legal representative to account.
4. If a custodian is removed under § 35-7-119(f), the court shall require an accounting and order delivery of the custodial property and records to the successor custodian and the execution of all instruments required for transfer of the custodial property.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-220.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-121. Termination of custodianship.

1. The custodian shall transfer in an appropriate manner the custodial property to the minor or to the minor's estate upon the earlier of:
   1. The minor's attainment of twenty-one (21) years of age; provided, that this transfer can be withheld until the minor's attainment of up to twenty-five (25) years of age if the instrument so provides, and if the gift is an inter vivos gift, the instrument further expressly states that deferring termination of custodianship beyond the minor's attainment of twenty-one (21) years of age will cause the transfer to be a gift of a future interest which may have adverse federal and state gift tax consequences; or
   2. The minor's death.
2. At any time a custodian may transfer part or all of the custodial property to a qualified minor’s trust without court order. The transfer terminates the custodianship to the extent of the transfer.

Acts 1992, ch. 664, § 1; 1995, ch. 513, § 1; 1999, ch. 491, § 8; T.C.A. § 35-7-221; Acts 2007, ch. 8, § 12.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-122. Applicability.

This chapter also applies to a transfer made on or after October 1, 1992, if:

1. The transfer purports to have been made under the Tennessee Uniform Gifts to Minors Act; or
2. The instrument by which the transfer purports to have been made uses in substance the designation “as custodian under the Uniform Gifts to Minors Act” or “as custodian under the Uniform Transfers to Minors Act” of any other state, and the application of this chapter is necessary to validate the transfer.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-222.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-123. Effect on existing custodianships.

1. Any transfer of custodial property as now defined in this chapter, including transfers of real property, made before October 1, 1992, is validated, notwithstanding that there was no specific authority in the Tennessee Uniform Gifts to Minors Act for the coverage of custodial property of that kind or for a transfer from that source at the time the transfer was made.
2. This chapter applies to all transfers made before October 1, 1992, in a manner and form prescribed in the Tennessee Uniform Gifts to Minors Act, except insofar as the application impairs constitutionally vested rights or extends the duration of custodianships beyond eighteen (18) years of age of the minor which were in existence on October 1, 1992.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-223.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-124. Uniformity of application and construction.

This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-224.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-125. Repeals prior act.

The Tennessee Uniform Gifts to Minors Act, formerly compiled in this chapter, is repealed. To the extent that this chapter, by virtue of § 35-7-123, does not apply to transfers made in a manner prescribed in the Tennessee Uniform Gifts to Minors Act or to the powers, duties and immunities conferred by transfers in that manner upon custodians and persons dealing with custodians, the repeal of the Tennessee Uniform Gifts to Minors Act does not affect those transfers or those powers, duties and immunities.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-225.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-7-126. Severability.

If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

Acts 1992, ch. 664, § 1; T.C.A. § 35-7-226.

Compiler's Notes. Former part 1, §§ 35-7-101 — 35-7-110 (Acts 1957, ch. 112, §§ 1-10; 1961, ch. 232, § 1; 1963, ch. 65, §§ 1-9; 1968, ch. 600, §§ 1-10; 1972, ch. 612, § 6; 1973, ch. 190, § 1; 1975, ch. 294, § 1; 1976, ch. 393, § 1; 1983, ch. 336, § 1; T.C.A., §§ 35-801 — 35-810), concerning the Uniform Gifts to Minors Act, was repealed by Acts 1992, ch. 664, § 1 effective October 1, 1992. See present § 35-7-125. For present law see this chapter.

35-8-101. Short title.

This chapter shall be known and may be cited as the “Revised Uniform Fiduciary Access to Digital Assets Act.”

Acts 2016, ch. 570, § 2.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Compiler's Notes. Former chapter 8, §§ 35-8-101 — 35-8-111 (Acts 1959, ch. 246, §§ 1-11; T.C.A., §§ 35-901 — 35-911), the Uniform Act for Simplification of Fiduciary Security Transfers, was repealed by Acts 1997, ch. 79, § 20, effective January 1, 1998.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-102. Chapter definitions.

In this chapter:

1. “Account” means an arrangement under a terms-of-service agreement in which a custodian carries, maintains, processes, receives, or stores a digital asset of the user or provides goods or services to the user;
2. “Agent” means an attorney-in-fact granted authority under a durable or nondurable power of attorney;
3. “Carries” means engages in the transmission of an electronic communication;
4. “Catalogue of electronic communications” means information that identifies each person with which a user has had an electronic communication, the time and date of the communication, and the electronic address of the person;
5. “Conservator” means a person appointed by a court to manage the estate of a person with a disability. “Conservator” includes a limited conservator;
6. “Content of an electronic communication” means information concerning the substance or meaning of the communication which:
   1. Has been sent or received by a user;
   2. Is in electronic storage by a custodian providing an electronic communication service to the public or is carried or maintained by a custodian providing a remote-computing service to the public; and
   3. Is not readily accessible to the public;
7. “Court” means any court of record that has jurisdiction to hear matters concerning personal representatives, conservators, guardians, agents acting pursuant to a power of attorney, or trustees;
8. “Custodian” means a person who carries, maintains, processes, receives, or stores a digital asset of a user;
9. “Designated recipient” means a person chosen by a user using an online tool to administer digital assets of the user;
10. “Digital asset” means an electronic record in which an individual has a right or interest. “Digital asset” does not include an underlying asset or liability unless the asset or liability is itself an electronic record;
11. “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities;
12. “Electronic communication” has the same meaning as defined in 18 U.S.C. § 2510(12);
13. “Electronic communication service” means a custodian that provides to a user the ability to send or receive an electronic communication;
14. “Fiduciary” means an original, additional, or successor personal representative, conservator, guardian, agent, or trustee;
15. “Guardian” means a person appointed by a court to manage the estate of a minor. “Guardian” includes a limited guardian;
16. “Information” means data, text, images, videos, sounds, codes, computer programs, software, databases, or the like;
17. “Limited conservator” means a conservator with partial, restricted, or temporary powers;
18. “Limited guardian” means a guardian with partial, restricted, or temporary powers;
19. “Minor” means an unemancipated individual who has not attained eighteen (18) years of age and who has not otherwise been emancipated, and for whom a guardian has been appointed. “Minor” includes an individual for whom an application for the appointment of a guardian is pending;
20. “Online tool” means an electronic service provided by a custodian that allows the user, in an agreement distinct from the terms-of-service agreement between the custodian and user, to provide directions for disclosure or nondisclosure of digital assets to a third person;
21. “Person” means an individual, estate, business or nonprofit entity; public corporation; government or governmental subdivision, agency, or instrumentality; or other legal entity;
22. “Person with a disability” means an individual eighteen (18) years of age or older determined by a court to be in need of partial or full supervision, protection, and assistance by reason of mental illness, physical illness or injury, developmental disability, or other mental or physical incapacity, and for whom a conservator has been appointed. “Person with a disability” includes an individual for whom an application for the appointment of a conservator is pending;
23. “Personal representative” means an executor, administrator, special administrator, or person that performs substantially the same function under law of this state other than this chapter;
24. “Power of attorney” means an instrument that grants an agent authority to act in the place of a principal;
25. “Principal” means an individual who grants authority to an agent in a power of attorney;
26. “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form;
27. “Remote-computing service” means a custodian that provides to a user computer-processing services or the storage of digital assets by means of an electronic communications system, as defined in 18 U.S.C. § 2510(14);
28. “Terms-of-service agreement” means an agreement that controls the relationship between a user and a custodian;
29. “Trustee” means a fiduciary with legal title to property under an agreement or declaration that creates a beneficial interest in another. “Trustee” includes a successor trustee;
30. “User” means a person who has an account with a custodian; and
31. “Will” includes a codicil, testamentary instrument that only appoints an executor, and instrument that revokes or revises a testamentary instrument.

Acts 2016, ch. 570, § 3.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-103. Applicability of chapter.

1. This chapter applies to:
   1. A fiduciary or agent acting under a will or power of attorney executed before, on, or after July 1, 2016;
   2. A personal representative acting for a decedent who died before, on, or after July 1, 2016;
   3. A conservatorship or guardianship proceeding, whether pending in a court or commenced before, on, or after July 1, 2016; and
   4. A trustee acting under a trust created before, on, or after July 1, 2016.
2. This chapter applies to a custodian if the user resides in this state or resided in this state at the time of the user's death.
3. This chapter does not apply to a digital asset of an employer used by an employee in the ordinary course of the employer's business.

Acts 2016, ch. 570, § 4.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-104. User direction for disclosure of digital assets.

1. A user may use an online tool to direct the custodian to disclose to a designated recipient or not to disclose some or all of the user's digital assets, including the content of electronic communications. If the online tool allows the user to modify or delete a direction at all times, a direction regarding disclosure using an online tool overrides a contrary direction by the user in a will, trust, power of attorney, or other dispositive or nominative instrument.
2. If a user has not used an online tool to give direction under subsection (a) or if the custodian has not provided an online tool, the user may allow or prohibit in a will, trust, power of attorney, or other dispositive or nominative instrument, disclosure to a fiduciary of some or all of the user's digital assets, including the content of electronic communications sent or received by the user.
3. A user's direction under subsection (a) or (b) overrides a contrary provision in a terms-of-service agreement that does not require the user to act affirmatively and distinctly from the user's assent to the terms of service.

Acts 2016, ch. 570, § 5.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-105. Rights of custodian or user.

1. This chapter does not change or impair a right of a custodian or a user under a terms-of-service agreement to access and use digital assets of the user.
2. This chapter does not give a fiduciary or designated recipient any new or expanded rights other than those held by the user for whom, or for whose estate, the fiduciary or designated recipient acts or represents.
3. A fiduciary's or designated recipient's access to digital assets may be modified or eliminated by a user, by federal law, or by a terms-of-service agreement if the user has not provided direction under § 35-8-104.

Acts 2016, ch. 570, § 6.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-106. Disclosure of digital assets — Powers of custodian — Administrative fee.

1. When disclosing digital assets of a user under this chapter, the custodian may at its sole discretion:
   1. Grant a fiduciary or designated recipient full access to the user's account;
   2. Grant a fiduciary or designated recipient partial access to the user's account sufficient to perform the tasks with which the fiduciary or designated recipient is charged; or
   3. Provide a fiduciary or designated recipient a copy in a record of any digital asset that, on the date the custodian received the request for disclosure, the user could have accessed if the user were alive and had full capacity and access to the account.
2. A custodian may assess a reasonable administrative charge for the cost of disclosing digital assets under this chapter.
3. A custodian need not disclose under this chapter a digital asset deleted by a user.
4. If a user directs or a fiduciary requests a custodian to disclose under this chapter some, but not all, of the user's digital assets, the custodian need not disclose the assets if segregation of the assets would impose an undue burden on the custodian. If the custodian believes the direction or request imposes an undue burden, the custodian or fiduciary may seek an order from the court to disclose:
   1. A subset limited by date of the user's digital assets;
   2. All of the user's digital assets to the fiduciary or designated recipient;
   3. None of the user's digital assets; or
   4. All of the user's digital assets to the court for review in camera.

Acts 2016, ch. 570, § 7.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-107. Disclosure of content of electronic communications of deceased user.

If a deceased user consented or a court directs disclosure of the contents of electronic communications of the user, the custodian shall disclose to the personal representative of the estate of the user the content of an electronic communication sent or received by the user if the representative gives the custodian:

1. A written request for disclosure in physical or electronic form;
2. A certified copy of the death certificate of the user;
3. A certified copy of any of the following: the letters of administration or letters testamentary appointing the personal representative; a small-estate affidavit under title 30, chapter 4; or a court order;
4. Unless the user provided direction using an online tool, a copy of the user's will, trust, power of attorney, or other dispositive or nominative instrument evidencing the user's consent to disclosure of the content of electronic communications; and
5. If requested by the custodian:
   1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the user's account;
   2. Evidence linking the account to the user; or
   3. A finding by the court that:
      1. The user had a specific account with the custodian, identifiable by the information specified in subdivision (5)(A);
      2. Disclosure of the content of electronic communications of the user would not violate 18 U.S.C. §§ 2701 et seq., 47 U.S.C. § 222, or other applicable law;
      3. Unless the user provided direction using an online tool, the user consented to disclosure of the content of electronic communications; or
      4. Disclosure of the content of electronic communications of the user is reasonably necessary for administration of the estate.

Acts 2016, ch. 570, § 8.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-108. Disclosure of other digital assets of deceased user.

Unless the user prohibited disclosure of digital assets or the court directs otherwise, a custodian shall disclose to the personal representative of the estate of a deceased user a catalogue of electronic communications sent or received by the user and digital assets, other than the content of electronic communications, of the user, if the representative gives the custodian:

1. A written request for disclosure in physical or electronic form;
2. A certified copy of the death certificate of the user;
3. A certified copy of any of the following: the letters of administration or letters testamentary appointing the personal representative; a small-estate affidavit under title 30, chapter 4; or a court order; and
4. If requested by the custodian:
   1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the user's account;
   2. Evidence linking the account to the user;
   3. An affidavit stating that disclosure of the user's digital assets is reasonably necessary for administration of the estate; or
   4. A finding by the court that:
      1. The user had a specific account with the custodian, identifiable by the information specified in subdivision (4)(A); or
      2. Disclosure of the user's digital assets is reasonably necessary for administration of the estate.

Acts 2016, ch. 570, § 9.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-109. Disclosure of content of electronic communications to principal.

To the extent a power of attorney expressly grants an agent authority over the content of electronic communications sent or received by the principal and unless directed otherwise by the principal or the court, a custodian shall disclose to the agent the content if the agent gives the custodian:

1. A written request for disclosure in physical or electronic form;
2. An original or a copy of the power of attorney expressly granting the agent authority over the content of electronic communications of the principal;
3. A certification by the agent, under penalty of perjury, that the power of attorney is in effect; and
4. If requested by the custodian:
   1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the principal's account; or
   2. Evidence linking the account to the principal.

Acts 2016, ch. 570, § 10.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-110. Disclosure of other digital assets of principal.

Unless otherwise ordered by the court, directed by the principal, or provided by a power of attorney, a custodian shall disclose to an agent with specific authority over digital assets or general authority to act on behalf of a principal a catalogue of electronic communications sent or received by the principal and digital assets, other than the content of electronic communications, of the principal if the agent gives the custodian:

1. A written request for disclosure in physical or electronic form;
2. An original or a copy of the power of attorney that gives the agent specific authority over digital assets or general authority to act on behalf of the principal;
3. A certification by the agent, under penalty of perjury, that the power of attorney is in effect; and
4. If requested by the custodian:
   1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the principal's account; or
   2. Evidence linking the account to the principal.

Acts 2016, ch. 570, § 11.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-111. Disclosure of digital assets held in trust when trustee is original user.

Unless otherwise ordered by the court or provided in a trust, a custodian shall disclose to a trustee that is an original user of an account any digital asset of the account held in trust, including a catalogue of electronic communications of the trustee and the content of electronic communications.

Acts 2016, ch. 570, § 12.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-112. Disclosure of digital assets held in trust when trustee is not original user.

Unless otherwise ordered by the court, directed by the user, or provided in a trust, a custodian shall disclose to a trustee that is not an original user of an account the content of an electronic communication sent or received by an original or successor user and carried, maintained, processed, received, or stored by the custodian in the account of the trust if the trustee gives the custodian:

1. A written request for disclosure in physical or electronic form;
2. A certified copy of the trust instrument or a certification of the trust under § 35-15-1013, that includes consent to disclosure of the content of electronic communications to the trustee;
3. A certification by the trustee, under penalty of perjury, that the trust exists and the trustee is a currently acting trustee of the trust; and
4. If requested by the custodian:
   1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the trust's account; or
   2. Evidence linking the account to the trust.

Acts 2016, ch. 570, § 13.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-113. Disclosure of other digital assets held in trust when trustee is original user.

Unless otherwise ordered by the court, directed by the user, or provided in a trust, a custodian shall disclose, to a trustee that is not an original user of an account, a catalogue of electronic communications sent or received by an original or successor user and stored, carried, or maintained by the custodian in an account of the trust and any digital assets, other than the content of electronic communications, in which the trust has a right or interest if the trustee gives the custodian:

1. A written request for disclosure in physical or electronic form;
2. A certified copy of the trust instrument or a certification of the trust under § 35-15-1013;
3. A certification by the trustee, under penalty of perjury, that the trust exists and the trustee is a currently acting trustee of the trust; and
4. If requested by the custodian:
   1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the trust's account; or
   2. Evidence linking the account to the trust.

Acts 2016, ch. 570, § 14.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-114. Disclosure of other digital assets held in trust when trustee is not original user.

1. After an opportunity for a hearing under title 34, chapter 1, the court may grant a guardian or conservator access to the digital assets of a minor or person with a disability.
2. Unless otherwise ordered by the court or directed by the user, a custodian shall disclose to a guardian or conservator the catalogue of electronic communications sent or received by a minor or person with a disability and any digital assets, other than the content of electronic communications, in which the minor or person with a disability has a right or interest if the guardian or conservator gives the custodian:
   1. A written request for disclosure in physical or electronic form;
   2. A certified copy of the court order that gives the guardian or conservator authority over the digital assets of the minor or person with a disability; and
   3. If requested by the custodian:
      1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the account of the minor or person with a disability; or
      2. Evidence linking the account to the minor or person with a disability.
3. A guardian or conservator with general authority to manage the assets of a minor or person with a disability may request a custodian of the digital assets of the minor or person with a disability to suspend or terminate an account of the minor or person with a disability for good cause. A request made under this section must be accompanied by a certified copy of the court order giving the guardian or conservator authority over the property of the minor or person with a disability.

Acts 2016, ch. 570, § 15.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-115. Disclosure of digital assets to guardian or conservator.

1. The legal duties imposed on a fiduciary charged with managing tangible property apply to the management of digital assets, including:
   1. The duty of care;
   2. The duty of loyalty; and
   3. The duty of confidentiality.
2. A fiduciary's or designated recipient's authority with respect to a digital asset of a user:
   1. Except as otherwise provided in § 35-8-104, is subject to the applicable terms of service;
   2. Is subject to other applicable law, including copyright law;
   3. In the case of a fiduciary, is limited by the scope of the fiduciary's duties; and
   4. May not be used to impersonate the user.
3. A fiduciary with authority over the property of a decedent, minor, person with a disability, principal, or settlor has the right to access any digital asset in which the decedent, minor, person with a disability, principal, or settlor had a right or interest and that is not held by a custodian or subject to a terms-of-service agreement.
4. A fiduciary acting within the scope of the fiduciary's duties is an authorized user of the property of the decedent, minor, person with a disability, principal, or settlor for the purpose of applicable computer-fraud and unauthorized-computer-access laws, including the Tennessee Personal and Commercial Computer Act of 2003, compiled in title 39, chapter 14, part 6.
5. A fiduciary with authority over the tangible personal property of a decedent, minor, person with a disability, principal, or settlor:
   1. Has the right to access the property and any digital asset stored in it; and
   2. Is an authorized user for the purpose of applicable computer-fraud and unauthorized-computer-access laws, including title 39, chapter 14, part 6.
6. A custodian may disclose information in an account to a fiduciary of the user when the information is required to terminate an account used to access digital assets licensed to the user.
7. A fiduciary of a user may request a custodian to terminate the user's account. A request for termination must be in writing, in either physical or electronic form, and accompanied by:
   1. If the user is deceased, a certified copy of the death certificate of the user;
   2. A certified copy of the letters of administration or letters testamentary appointing the personal representative; a certified copy of the small-estate affidavit under title 30, chapter 4; a certified copy of a court order; an original or a copy of a power of attorney; or a certified copy of the trust instrument or a certification of the trust under § 35-15-1013, giving the fiduciary authority over the account; and
   3. If requested by the custodian:
      1. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the user's account;
      2. Evidence linking the account to the user; or
      3. A finding by the court that the user had a specific account with the custodian, identifiable by the information specified in subdivision (g)(3)(A).

Acts 2016, ch. 570, § 16.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-116. Fiduciary duty.

1. Not later than sixty (60) days after receipt of the information required under §§ 35-8-107 — 35-8-115, a custodian shall comply with a request under this chapter from a fiduciary or designated recipient to disclose digital assets or terminate an account. If the custodian fails to comply, the fiduciary or designated recipient may apply to the court for an order directing compliance.
2. An order under subsection (a) directing compliance must contain a finding that compliance is not in violation of 18 U.S.C. § 2702.
3. A custodian may notify the user that a request for disclosure or to terminate an account was made under this chapter.
4. A custodian may deny a request under this chapter from a fiduciary or designated recipient for disclosure of digital assets or to terminate an account if the custodian is aware of any lawful access to the account following the receipt of the fiduciary's request.
5. This chapter does not limit a custodian's ability to obtain or require a fiduciary or designated recipient requesting disclosure or termination under this chapter to obtain a court order which:
   1. Specifies that an account belongs to the minor, person with a disability, principal, or settlor;
   2. Specifies that there is sufficient consent from the minor, person with a disability, principal, or settlor to support the requested disclosure; and
   3. Contains a finding required by law other than this chapter.
6. A custodian and the custodian's officers, employees, and agents are immune from liability for an act or omission done in good faith in compliance with this chapter.

Acts 2016, ch. 570, § 17.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-117. Uniformity of application and construction.

In applying and construing this chapter, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

Acts 2016, ch. 570, § 18.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-8-118. Electronic signatures — Global and National Commerce Act.

This chapter modifies, limits, or supersedes the Electronic Signatures in Global and National Commerce Act (15 U.S.C. §§ 7001 et seq.), but does not modify, limit, or supersede Section 101(c), Electronic Signatures in Global and National Commerce Act (15 U.S.C. § 7001(c)), or authorize electronic delivery of any of the notices described in Section 103(b), Electronic Signatures in Global and National Commerce Act (15 U.S.C. § 7003(b)).

Acts 2016, ch. 570, § 19.

Code Commission Notes.

Acts 2016, ch. 570, § 1 enacted this chapter as chapter 51 of Title 35, but the chapter has been redesignated as chapter 8 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 570, § 24. July 1, 2016.

35-9-101. Prohibited acts.

In the administration of any trust that is a “private foundation,” as defined in § 509 of the Internal Revenue Code of 1954 (26 U.S.C. §  509), a “charitable trust,” as defined in § 4947(a)(1) of the Internal Revenue Code of 1954 (26 U.S.C. §  4947(a)(1)), or a “split-interest trust,” as defined in § 4947(a)(2) of the Internal Revenue Code of 1954  (26 U.S.C. §  4947(a)(2)), the following acts are prohibited:

1. Engaging in any act of self-dealing, as defined in § 4941(d) of the Internal Revenue Code of 1954  (26 U.S.C. §  4941(d)), that would give rise to any liability for the tax imposed by § 4941(a) of the Internal Revenue Code of 1954 (26 U.S.C. §  4941(a));
2. Retaining any excess business holdings (as defined in § 4943(c) of the Internal Revenue Code of 1954 26 U.S.C. §  4943(c)),  that would give rise to any liability for the tax imposed by § 4943(a) of the Internal Revenue Code of 1954 (26 U.S.C. §  4943(a));
3. Making any investments that would jeopardize the carrying out of any of the exempt purposes of the trust, within the meaning of § 4944 of the Internal Revenue Code of 1954 (26 U.S.C. §  4944), so as to give rise to any liability for the tax imposed by § 4944(a) of the Internal Revenue Code of 1954 (26 U.S.C. §  4944(a)); or
4. Making any taxable expenditures (as defined in § 4945(d) of the Internal Revenue Code of 1954 (26 U.S.C. §  4945(d)), that would give rise to any liability for the tax imposed by § 4945(a) of the Internal Revenue Code of 1954 (26 U.S.C. §  4945(a)); provided, that this section does not apply either to those split-interest trusts or to amounts of those split-interest trusts that are not subject to the prohibitions applicable to private foundations by reason of § 4947 of the Internal Revenue Code of 1954 (26 U.S.C. §  4947).

Acts 1971, ch. 3, § 1; T.C.A., § 35-1001.

Collateral References.

Validity, construction, and effect of provisions of charitable trust providing for accumulation of income. 6 A.L.R.4th 903.

35-9-102. Distribution of amounts to avoid tax liability.

In the administration of any trust that is a private foundation or that is a charitable trust, there shall be distributed, for the purposes specified in the trust instrument, for each taxable year, amounts at least sufficient to avoid liability for the tax imposed by § 4942(a) of the Internal Revenue Code of 1954 (26 U.S.C. §  4942(a)).

Acts 1971, ch. 3, § 2; T.C.A., § 35-1002.

35-9-103. Applicability of §§ 35-9-101 and 35-9-102.

Sections 35-9-101 and 35-9-102 do not apply to any trust to the extent that a court of competent jurisdiction determines that the application would be contrary to the terms of the instrument governing the trust and that the same may not properly be changed to conform to those sections.

Acts 1971, ch. 3, § 3; T.C.A., § 35-1003.

35-9-104. Powers of courts and attorney general and reporter unimpaired.

Nothing in this chapter shall impair the rights and powers of the courts or the attorney general and reporter of this state with respect to any trust.

Acts 1971, ch. 3, § 4; T.C.A., § 35-1004.

35-9-105. References to Internal Revenue Code.

All references to sections of the Internal Revenue Code of 1954 (U.S.C. title 26), include future amendments to those sections and corresponding provisions of future internal revenue laws.

Acts 1971, ch. 3, § 5; T.C.A., § 35-1005.

35-9-106. Authority to amend trust for tax benefits.

1. It is the purpose of this section to preserve the intent of testators and grantors of testamentary and inter vivos charitable remainder trusts created prior to and after August 31, 1972, by minimizing the imposition of federal income and excise taxes, imposed upon the assets of such trusts, and thereby preserving the maximum amount of the trust assets for the charitable, educational, religious and benevolent purposes for which their remainders were intended. The attorney general and reporter shall perform such acts as, in the attorney general and reporter's opinion, will result in the effectuation of this declaration of purpose.
2. 1. Notwithstanding any provisions to the contrary in the governing instrument or in any other law of this state, the trustee of any split-interest trust as defined in § 4947(a)(2) of the Internal Revenue Code of 1954 (26 U.S.C. §  4947(a)(2)), with the consent of all the beneficiaries under the governing instrument, may, without application to any court and either before or after the funding of the trust, amend the governing instrument to conform to §§ 170(f), 642(c)(5), 664, 2055(e), and 2522(c) of the Internal Revenue Code of 1954  (26 U.S.C. §§  170(f), 642(c)(5), 664, 2055(e), and 2522(c)), to the extent applicable, by executing a written amendment to the trust for that purpose. Consent shall not be required as to individual beneficiaries not living at the time of amendment or as to charitable beneficiaries not named or not in existence at the time of amendment. The possibility of beneficial interests arising after the amendment of the governing instruments shall not defeat the ability to amend. In the case of an individual beneficiary not competent to give consent, the consent of the beneficiary's guardian or conservator, if any, or the consent of a guardian ad litem appointed by a court of competent jurisdiction, shall be treated as the consent of the beneficiary. A copy of the proposed amendment, executed by the trustee and consented to by all beneficiaries whose consent is required under this subdivision (b)(1), shall be delivered in person or by registered mail to the attorney general and reporter. The attorney general and reporter may, within sixty (60) days after receipt of the proposed amendment, indicate by registered mail to the trustee any specific objections to the proposed amendment, in which event subdivision (b)(2) shall apply if the attorney general and reporter does not withdraw the objections. In the case of any amendment to a trust created by will or to a trust created by inter vivos instrument, unless otherwise provided, the amendment shall be deemed to apply as of the date of death of the decedent or as of the date of gift.
   2. In the event that all of the trustees and beneficiaries under the governing instrument do not consent to the amendment, or in the event there are no named beneficiaries, any court of competent jurisdiction shall have the power to amend the governing instrument in accordance with subdivision (b)(1) upon petition of the trustee or any beneficiary and upon a subsequent finding by the court that the testator's or the grantor's intention would not be defeated by the amendment. A copy of the petition shall be delivered in person or by registered mail to the attorney general and reporter.
   3. Unless otherwise expressly provided in the governing instrument, any devise, bequest or transfer in a testamentary or inter vivos trust for religious, educational, charitable or benevolent uses to be determined by the trustee or any other person shall be made only to organizations and for purposes within the meaning of §§ 170(c), 2055(a), and 2522(a) of the Internal Revenue Code of 1954  (26 U.S.C. §§  170(c), 2055(a), and 2522(a)).
   4. This section also applies to executors and administrators of estates of decedents whose wills create trusts described in subdivision (b)(1).
3. All references to sections of the Internal Revenue Code of 1954 refer to the Internal Revenue Code of 1954 as it exists on August 31, 1972. All references to the Internal Revenue Code of 1954 in subdivisions (b)(1) and (3) refer to the Internal Revenue Code of 1954 as it exists on June 4, 1975.
4. This section applies in the case of all decedents dying after December 31, 1969, and in the case of all irrevocable inter vivos trusts created after July 31, 1969.

Acts 1975, ch. 329, § 1; T.C.A., § 35-1006.

Cross-References. Certified mail instead of registered mail, § 1-3-111.

Law Reviews.

Charitable Bequests: Delegating Discretion to Choose the Objects of the Testator's Beneficence (Denise Caffrey), 44 Tenn. L. Rev.  307 (1977).

35-9-107. Reformation of trusts to comply with tax regulations.

1. It is the purpose of this section to permit and authorize the reformation of certain inter vivos and testamentary charitable remainder trusts created prior to and after December 10, 1998, to comply with applicable federal tax regulations regarding qualifying payments to noncharitable beneficiaries. Such reformations shall be permitted and authorized upon the unanimous written consent of all living individual grantors, living individual beneficiaries, charitable remainder beneficiaries named or otherwise provided for in the trust agreement, and the trustee, with the concurrence of the attorney general and reporter. The attorney general and reporter shall perform such acts as, in the attorney general and reporter's opinion, will effectuate this declaration of purpose.
2. 1. Notwithstanding any provision to the contrary in the governing instrument or in any other law of this state, the trustee of any charitable remainder trust described in § 1.664-3(a)(1)(i)(b) of the Internal Revenue Code Regulations, (26 CFR 1.664-3(a)(1)(i)(b)), as currently adopted, or as may be subsequently amended, may, without application to any court and either before or after the funding of such trust, reform the trust to meet the definition of a charitable remainder unitrust described in § 1.664-3(a)(1)(i)(c) of the Internal Revenue Code Regulations, (26 CFR 1.664-3(a)(1)(i)(c)), as currently adopted, or as may be subsequently amended. In order to effectuate this reformation, the trustee shall obtain the written consent of all living grantors, living beneficiaries, charitable beneficiaries named or otherwise provided for in the trust agreement, and the trustee, together with the written concurrence of the attorney general and reporter. If the charitable beneficiary is to be determined by a person having discretion to select or name the charitable beneficiary at the time the trust terminates, the consent of that person shall be required. Consent shall not be required as to individual beneficiaries or grantors not living at the time of reformation or as to charitable remainder beneficiaries not named or not in existence at the time of reformation.
   2. The possibility of beneficial interests arising after the reformation of the trust instrument shall not defeat the ability to reform the trust pursuant to this section. In the case of an individual beneficiary or grantor not competent to give consent, the consent of that beneficiary's or grantor's guardian or conservator, if any, or the consent of a guardian ad litem appointed by a court of competent jurisdiction, shall be treated as the consent of the beneficiary or grantor. A copy of the proposed reformation, executed by the trustee and consented to by all living grantors, living beneficiaries, and charitable beneficiaries named or otherwise provided for in the trust agreement, shall be delivered to the attorney general and reporter. The attorney general and reporter shall, within thirty (30) days after receipt, either concur with the proposed reformation or state any specific objections to the proposed reformation in writing and delivered to the trustee by registered mail. If the attorney general and reporter state objections and those objections are not resolved to the attorney general's and reporter's satisfaction or the attorney general and reporter does not withdraw the objections, subdivision (b)(3) shall apply.
   3. In the event that all of the living grantors, living beneficiaries, and charitable remainder beneficiaries do not consent to the reformation, any court of competent jurisdiction shall have the power to reform the governing instrument in accordance with subdivision (b)(1) upon petition by the trustee or any beneficiary. A copy of the petition shall be delivered in person or by registered mail to the attorney general and reporter.

Acts 2000, ch. 600, § 1.

Cross-References. Certified mail instead of registered mail, § 1-3-111.

35-9-108. Information or actions that cannot be required.

1. For the purposes of this section, “private foundation” has the same meaning ascribed to “private foundation” in § 509(a) of the Internal Revenue Code of 1986 (26 U.S.C. §  509(a)), as amended.
2. No private foundation shall be required by a department, agency, board, or other entity of state or local government to:
   1. Disclose the race, religion, gender, national origin, socioeconomic status, age, ethnicity, disability, marital status, or sexual orientation of:
      1. The foundation's employees, officers, directors, trustees, or contributors, without the prior written consent of the individual or individuals in question; or
      2. Any individual, or of the employees, officers, directors, trustees, members, or owners of any entity, that has received monetary or in-kind contributions or grants from, or contracted with, the foundation, without the prior written consent of the individual or individuals in question;
   2. Hire, appoint, or elect an individual of any particular race, religion, gender, national origin, socioeconomic status, age, ethnicity, disability, marital status, or sexual orientation as an employee, officer, director, or trustee of the foundation;
   3. Disqualify, remove, or prohibit service of an individual as an officer, director, or trustee of the foundation based upon such individual's familial relationship to other officers, directors, or trustees of the foundation or a contributor to the foundation;
   4. Hire, appoint, or elect an individual as an officer, director, or trustee of the foundation who does not share a familial relationship with the other officers, directors, or trustees of the foundation or with a contributor to the foundation; or
   5. Except as a lawful condition or requirement on the expenditure of particular funds imposed by the contributor or grantor of such funds, distribute the foundation's funds to, or contract with, any individual or entity based upon the:
      1. Race, religion, gender, national origin, socioeconomic status, age, ethnicity, disability, marital status, or sexual orientation of the individual or of the employees, officers, directors, trustees, members, or owners of the entity; or
      2. Populations, locales, or communities served by the individual or entity.

Acts 2013, ch. 193, § 1.

Part 1
Uniform Management of Institutional Funds Act of 1973 [Repealed]

35-11-101. Funds placed in trust — Trustee.

1. All funds raised to meet the medical or related expenses of a named individual suffering from a catastrophic illness shall be placed in trust with a bank or trust company organized and doing business under the laws of any state or territory of the United States, including the District of Columbia, and authorized to do business in this state. The trustee of this trust shall be either an individual, or a bank or trust company. The funds placed with a bank or trust company shall be considered to be held in trust, and the bank or trust company considered a trustee, as those terms are used in this chapter, if the bank or trust company maintains the funds in its name as custodian for the benefit of the injured individual, and limits disbursements to those for which the funds are raised or that are permitted by §§ 35-11-103 and 35-11-105.
2. As used in this chapter, “catastrophic illness” includes organ transplants.

Acts 1989, ch. 386, § 1; 2007, ch. 430, § 2.

Cross-References. Certain fundraising deemed unlawful, § 35-11-111.

Charitable trusts, title 35, ch. 9.

35-11-102. Trust relationship prerequisite to accepting contributions — Beneficiaries.

1. Before accepting any contributions for such fundraising activities, the organizer or promoter shall enter into a trust relationship with a bank or trust company or shall establish a trust in the name of an individual, “  [name of beneficiary] trust,  trustee”, or words to the same effect; provided, that if in violation of this chapter contributions are accepted prior to entering into the trust relationship, then those contributions shall be placed in trust immediately upon establishment of the required trust relationship.
2. The beneficiary of the trust shall be the named individual for whom the funds are being raised.
3. Contingent beneficiaries shall be selected as provided in § 35-11-103.
4. On the establishment of a trust for purposes regulated by this chapter, the trustee shall file written notice of the establishment of the trust on forms prescribed by the secretary of state with the division of charitable solicitation in the office of the secretary of state. No person or entity may solicit funds on behalf of an individual with a catastrophic illness that is subject to this chapter prior to the filing of this notice with the division. For any trust regulated under this chapter on July 1, 2007, the notice shall be filed on or before August 1, 2007.
5. A trustee, other than a bank or trust company acting as trustee, shall file an accounting of the trust with the division of charitable solicitations each year on the anniversary of the establishment of the trust.

Acts 1989, ch. 386, § 1; 2007, ch. 430, §§ 3, 6.

Cross-References. Certain fundraising deemed unlawful, § 35-11-111.

35-11-103. Transfer of remaining funds — Contingent beneficiaries.

1. If the expenses of the illness of the beneficiary are less than the funds held in trust or the beneficiary dies before the funds held in trust are depleted, any remaining balance shall be transferred to the contingent beneficiary.
2. When the trust is established, the named beneficiary shall select the manner in which a contingent beneficiary shall be named. If the named beneficiary is a minor or is incompetent, the parent or guardian shall select the manner in which a contingent beneficiary shall be named. The selection of the contingent beneficiary shall be made as follows:
   1. An institution involved in research to find a cure for a catastrophic illness shall be named;
   2. An individual, if known, who suffers from a catastrophic illness and is in need of financial help for valid reimbursable medical expenses, as defined in § 35-11-105, shall be named; or
   3. The trustee shall be authorized to select:
      1. An institution involved in research to find a cure for a catastrophic illness; or
      2. An individual who suffers from a catastrophic illness whether the name of such individual is known at the death of the named beneficiary or comes to the attention of the trustee within one (1) year after the death of the named beneficiary. The selection of this individual by the trustee is not limited to an individual for whom a trust has been established at the bank or trust company. If an individual beneficiary cannot be named within one (1) year, the option in subdivision (b)(3)(A) shall automatically occur.
3. Modification of the selection of the contingent beneficiary may be made before the death of the named beneficiary or before the disbursement of funds to the selected contingent beneficiary.
4. The transfer to a contingent beneficiary shall occur as quickly as is reasonably feasible.

Acts 1989, ch. 386, § 2.

35-11-104. Payment and deposit of contributions.

1. All contributions for funds raised in accordance with this chapter made by check shall be made payable to the bank or trust company or the trust established by this chapter.
2. All cash contributions shall be deposited as quickly as is reasonably feasible to the trust.

Acts 1989, ch. 386, § 3; 2007, ch. 430, § 4.

35-11-105. Disbursement of funds — Valid reimbursable medical expenses.

1. Funds shall be disbursed by the trustee upon the presentation of a statement for valid reimbursable medical expenses incurred by the named individual for the treatment of the catastrophic illness and for the payment of reasonable solicitation costs and expenses, when appropriate, incurred by the organizer, promoter or solicitor.
2. “Valid reimbursable medical expenses” are those deductible medical expenses described in the Internal Revenue Code (U.S.C. title 26).

Acts 1989, ch. 386, § 3; 2007, ch. 430, § 5.

35-11-106. Powers of institutions apply to trusts.

All powers and authority that are conferred on banks and trust companies in the administration and maintenance of trust funds in those institutions shall also apply to trusts created by this chapter.

Acts 1989, ch. 386, § 3.

35-11-107. Civil penalties — Appeal.

In addition to any other penalty or remedy available under law, the secretary of state or the designee of the secretary may assess a civil penalty, pursuant to § 48-101-514, against any person or entity that violates a provision of this chapter. The person or entity against whom the penalty is assessed shall have appeal rights pursuant to § 48-101-514.

Acts 2007, ch. 430, § 7.

35-11-108. Right to inspect records for trusts.

The secretary of state or the secretary's designee shall have the right to inspect the records for trusts established under this part, subject to title 45, chapter 10 and the Federal Right to Financial Privacy Act (12 U.S.C. § 3401 et seq.)

Acts 2007, ch. 430, § 8.

35-11-109. Subpoena power.

The secretary of state or the secretary's designee shall have the right to issue subpoenas to obtain records relevant to a solicitation or a trust established under this part, subject to title 45, chapter 10 and the Federal Right to Financial Privacy Act (12 U.S.C. § 3401 et seq.)

Acts 2007, ch. 430, § 9.

35-11-110. Rules and regulations.

The secretary of state may adopt rules and regulations to carry out this chapter in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

Acts 2007, ch. 430, § 10.

35-11-111. Unlawful fundraising.

1. It is an offense for any fundraising to occur for the purposes described in §§ 35-11-101 and 35-11-102 in violation of this chapter.
2. It is an offense for trust funds raised for the purposes described in §§ 35-11-101 and 35-11-102 to be distributed in violation of this chapter.
3. A violation of subsection (a) or (b) is a Class B misdemeanor.

Acts 1989, ch. 386, § 4; 2007, ch. 430, § 1.

Cross-References. Penalty for Class B misdemeanor, § 40-35-111.

35-11-112. Exemptions.

1. 1. This chapter shall not apply to any nonprofit corporation that is:
      1. Incorporated under the laws of Tennessee;
      2. Exempt from federal income taxation under 26 U.S.C. § 501(c)(3); and
      3. Requested by a patient or a patient's family to raise funds for an organ transplant for a specific individual.
   2. Any funds remaining in a particular account shall revert to the general fund of the corporation to be used to assist other similarly situated persons.
2. 1. This chapter shall not apply to any nonprofit corporation that:
      1. Is incorporated under the laws of Tennessee and is exempt from federal income taxation under 26 U.S.C. § 501(c)(3); and
      2. Solicits and accepts contributions of funds for the purpose of providing minors suffering from a catastrophic illness with nonmedical gifts or benefits to fulfill a desire or wish of the minor.
   2. A portion of such funds may be used to provide appropriate adult supervision if required by the gift.
   3. Any such funds raised for a particular minor and unexpended shall revert to the general fund of the corporation to be used to provide gifts or benefits for a similar minor.

Acts 1989, ch. 386, §§ 5, 6.

35-12-101. Short title.

This chapter shall be known and may be cited as the “Uniform Transfer on Death Security Registration Act.”

Acts 1995, ch. 471, § 1.

35-12-102. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

1. “Beneficiary form” means a registration of a security which indicates the present owner of the security and the intention of the owner regarding the person who will become the owner of the security upon the death of the owner;
2. “Devisee” means any person designated in a will to receive a disposition of real or personal property;
3. “Heirs” means those persons, including the surviving spouse, who are entitled under the statutes of intestate succession to the property of a decedent;
4. “Person” means an individual, a corporation, an organization, or other legal entity;
5. “Personal representative” includes executor, administrator, successor personal representative, special administrator, and persons who perform substantially the same function under the law governing their status;
6. “Property” includes both real and personal property or any interest therein and means anything that may be the subject of ownership;
7. “Register,” including its derivatives, means to issue a certificate showing the ownership of a certificated security or, in the case of an uncertificated security, to initiate or transfer an account showing ownership of securities;
8. “Registering entity” means a person who originates or transfers a security title by registration, and includes a broker maintaining security accounts for customers and a transfer agent or other person acting for or as an issuer of securities;
9. “Security” means a share, participation, or other interest in property, in a business, or in an obligation of an enterprise or other issuer, and includes a certificated security, an uncertificated security, and a security account;
10. “Security account” means a:
    1. Reinvestment account associated with a security, a securities account with a broker, a cash balance in a brokerage account, cash, interest, earnings, or dividends earned or declared on a security in an account, a reinvestment account, or a brokerage account, whether or not credited to the account before the owner's death;
    2. Custody account or an investment management account with a trust company or a trust division of a bank with trust powers, including the securities in the account, a cash balance in the account, cash, cash equivalents, interest, earnings, or dividends earned or declared on a security in the account, whether or not credited to the account before the owner's death; or
    3. Cash balance or other property held for or due to the owner of a security as a replacement for or product of an account security, whether or not credited to the account before the owner's death; and
11. “State” includes any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession subject to the legislative authority of the United States.

Acts 1995, ch. 471, § 1; 2012, ch. 562, § 1.

35-12-103. Who may obtain beneficiary form — Owners hold as joint tenants.

Only individuals whose registration of a security shows sole ownership by one (1) individual or multiple ownership by two (2) or more with right of survivorship, rather than as tenants in common, may obtain registration in beneficiary form. Multiple owners of a security registered in beneficiary form hold as joint tenants with right of survivorship, as tenants by the entireties, or as owners of community property held in survivorship form, and not as tenants in common.

Acts 1995, ch. 471, § 1.

35-12-104. Authorization.

A security may be registered in beneficiary form if the form is authorized by this or a similar statute of the state of organization of the issuer or registering entity, the location of the registering entity's principal office, the office of its transfer agent or its office making the registration, or by this or a similar statute of the law of the state listed as the owner's address at the time of registration. A registration governed by the law of a jurisdiction in which this or similar legislation is not in force or was not in force when a registration in beneficiary form was made is nevertheless presumed to be valid and authorized as a matter of contract law.

Acts 1995, ch. 471, § 1.

35-12-105. Designation.

A security, whether evidenced by certificate or account, is registered in beneficiary form when the registration includes a designation of a beneficiary to take the ownership at the death of the owner or the deaths of all multiple owners.

Acts 1995, ch. 471, § 1.

35-12-106. Evidence of beneficiary form.

Registration in beneficiary form may be shown by the words “transfer on death” or the abbreviation “TOD,” or by the words “pay on death” or the abbreviation “POD,” after the name of the registered owner and before the name of a beneficiary.

Acts 1995, ch. 471, § 1.

35-12-107. No effect until death.

The designation of a TOD beneficiary on a registration in beneficiary form has no effect on ownership until the owner's death. A registration of a security in beneficiary form may be cancelled or changed at any time by the sole owner or all then surviving owners without the consent of the beneficiary.

Acts 1995, ch. 471, § 1.

35-12-108. Effect upon death.

On death of a sole owner or the last to die of all multiple owners, ownership of securities registered in beneficiary form passes to the beneficiary or beneficiaries who survive all owners. On proof of death of all owners, compliance with any applicable requirements of the registering entity, and procurement of any inheritance tax waiver as required by § 67-8-417, a security registered in beneficiary form may be reregistered in the name of the beneficiary or beneficiaries who survived the death of all owners. Until division of the security after the death of all owners, multiple beneficiaries surviving the death of all owners hold their interests as tenants in common. If no beneficiary survives the death of all owners, the security belongs to the estate of the deceased sole owner or the estate of the last to die of all multiple owners.

Acts 1995, ch. 471, § 1.

35-12-109. Registration.

1. A registering entity is not required to offer or to accept a request for security registration in beneficiary form. If a registration in beneficiary form is offered by a registering entity, the owner requesting registration in beneficiary form assents to the protections given to the registering entity by this chapter.
2. By accepting a request for registration of a security in beneficiary form, the registering entity agrees that the registration will be implemented on death of the deceased owner as provided in this chapter.
3. A registering entity is discharged from all claims to a security by the estate, creditors, heirs, or devisees of a deceased owner if it registers a transfer of the security in accordance with § 35-12-108 and does so in good faith reliance on the registration, on this chapter, and on information provided to it by affidavit of the personal representative of the deceased owner, or by the surviving beneficiary or by the surviving beneficiary's representatives, or other information available to the registering entity. The protections of this chapter do not extend to a reregistration or payment made after a registering entity has received written notice from any claimant to any interest in the security objecting to implementation of a registration in beneficiary form. No other notice or other information available to the registering entity affects its right to protection under this chapter.
4. The protection provided by this chapter to the registering entity of a security does not affect the rights of beneficiaries in disputes between themselves and other claimants to ownership of the security transferred or its value or proceeds.

Acts 1995, ch. 471, § 1.

35-12-110. Transfer.

1. A transfer on death resulting from a registration in beneficiary form is effective by reason of the contract regarding the registration between the owner and the registering entity and this chapter and is not testamentary.
2. This chapter does not limit the rights of creditors of security owners against beneficiaries and other transferees under other laws of this state.

Acts 1995, ch. 471, § 1.

35-12-111. Establishment of terms and conditions.

1. A registering entity offering to accept registrations in beneficiary form may establish the terms and conditions under which it will receive requests for registrations in beneficiary form, and for implementation of registrations in beneficiary form, including requests for cancellation of previously registered TOD beneficiary designations and requests for reregistration to effect a change of beneficiary. The terms and conditions so established may provide for proving death, avoiding or resolving any problems concerning fractional shares, designating primary and contingent beneficiaries, and substituting a named beneficiary's descendants to take in the place of the named beneficiary in the event of the beneficiary's death. Substitution may be indicated by appending to the name of the primary beneficiary the letters LDPS, standing for “lineal descendants per stirpes.” This designation substitutes a deceased beneficiary's descendants who survive the owner for a beneficiary who fails to so survive, the descendants to be identified and to share in accordance with the law of the beneficiary's domicile at the owner's death governing inheritance by descendants of an intestate. Other forms of identifying beneficiaries who are to take on one (1) or more contingencies, and rules for providing proofs and assurances needed to satisfy reasonable concerns by registering entities regarding conditions and identities relevant to accurate implementation of registrations in beneficiary form, may be contained in a registering entity's terms and conditions.
2. The following are illustrations of registrations in beneficiary form which a registering entity may authorize:
   1. Sole owner-sole beneficiary: John S. Brown TOD (or POD) John S. Brown Jr.
   2. Multiple owners-sole beneficiary: John S. Brown, Mary B Brown JT TEN TOD John S. Brown Jr.
   3. Multiple owners-primary and secondary (substituted) beneficiaries: John S. Brown, Mary B. Brown JT TEN TOD, John S. Brown Jr. SUB BENE, Peter Q. Brown or John S. Brown, Mary B. Brown JT TEN TOD, John S. Brown Jr. LDPS.

Acts 1995, ch. 471, § 1.

35-12-112. Construction.

1. This chapter shall be liberally construed and applied to promote its underlying purposes and policy and to make uniform the laws with respect to the subject of this chapter among states enacting it.
2. Unless displaced by the particular provisions of this chapter, the principles of law and equity supplement its provisions.

Acts 1995, ch. 471, § 1.

35-12-113. Application.

This chapter applies to registrations of securities in beneficiary form made before or after July 1, 1995, by decedents dying on or after July 1, 1995.

Acts 1995, ch. 471, § 1.

35-13-101. Short title.

This chapter shall be known and may be cited as the “Tennessee Charitable Beneficiaries Act of 1997.”

Acts 1997, ch. 300, § 1.

Compiler's Notes. Acts 1997, ch. 300, § 2, provides that this chapter shall take effect upon becoming law as to all estates or trusts under administration or other entities administering a charitable gift or discretionary charitable gift, regardless of the date of the gift instrument or when administration began, the public welfare requiring it.

Cross-References. Charitable Gift Annuity Act, title 56, ch. 52.

Law Reviews.

Conversions of Nonprofit Hospitals to For-Profit Status: The Tennessee Experience, 28 U. Mem. L. Rev. 1077 (1998).

Symposium: The Role of Federal Law in Private Wealth Transfer: Comment, Is Federalization of Charity Law All Bad? What States Can Learn from the Internal Revenue Code, 67 Vand. L. Rev. 1621 (2014).

Symposium: The Role of Federal Law in Private Wealth Transfer: In Search of the Probate Exception, 67 Vand. L. Rev. 1533 (2014).

35-13-102. Purpose — Chapter definitions.

1. This chapter declares that the public policy of this state, as declared in its cases and statutes, favors gifts to charity that improve the general welfare through acts of philanthropy.
2. As used in this chapter, unless the context otherwise requires:
   1. “Attorney general and reporter” means the attorney general and reporter of Tennessee or the attorney general and reporter's designee;
   2. “Charitable beneficiary” means the United States, any state that is part of the United States, or any political subdivision of a state, the District of Columbia, any corporation, trust, fraternal society or other organization described in §§ 170(b)(1)(A), 170(c), 2055(a) and 2522(a) of the Internal Revenue Code (26 U.S.C. §§ 170(b)(1)(A), 170(c), 2055(a) and 2522(a)), that is exempt from taxation under § 501(c)(3) of the Internal Revenue Code (26 U.S.C. §§ 170(b)(1)(A), 170(c), 2055(a) and 2522(a)), or any church, synagogue, other religious organization, or any other organization, entity or association to which a gift would be deductible under §§ 170(b)(1)(A), 170(c), 2055(a) and 2522(a) of the Internal Revenue Code;
   3. “Charitable gift” means any gift clearly intended for charitable purposes;
   4. “Charitable purpose” means any purpose generally considered charitable at common law, or for any charitable purpose under any section of Tennessee Code Annotated, or for any purpose described in §§ 170(b)(1)(A), 170(c), 2055(a) and 2522(a) of the Internal Revenue Code. A reference to the applicable section or sections of Tennessee Code Annotated or the Internal Revenue Code sufficiently describes the charitable purposes of the gift;
   5. “Court” means the chancery court or other court exercising equity jurisdiction or a probate court of record;
   6. “Discretionary charitable gift” means a charitable gift that has indefinite beneficiaries, objects, purposes or subjects;
   7. “Donor” means the person making the lifetime or testamentary charitable gift;
   8. “Gift instrument” means a will, deed, grant, conveyance, trust agreement, memorandum, writing or other governing document that creates the charitable gift;
   9. “Internal Revenue Code” means the Internal Revenue Code of 1986 (U.S.C. title 26); and
   10. “Tax-exempt” means that the organization, trust or beneficiary referred to is one that is described in § 501(c)(3) of the Internal Revenue Code.
3. The words “humane,” “beneficial,” “beneficent,” “worthy,” “philanthropic,” “humanitarian” or their derivatives or similar language in the gift instrument shall be presumed to be synonyms for “charitable” as used in this chapter, unless expressly indicated not to be charitable by the context in which they are used.

Acts 1997, ch. 300, § 1.

35-13-103. Gift instrument to control disposition of gift.

A gift instrument that specifies the charitable beneficiaries, objects, purposes or subjects of the charitable gift controls the disposition or administration of the charitable gift, except as provided in §§ 35-13-114 and 35-13-107.

Acts 1997, ch. 300, § 1.

35-13-104. [Repealed.]

Compiler's Notes. Former § 35-13-104 (Acts 1997, ch. 300, § 1), concerning the definiteness of gift a instrument, was repealed by Acts 2004, ch. 537, § 98, effective July 1, 2004.

35-13-105. Discretionary charitable gifts.

When the donor makes a discretionary charitable gift the following provisions apply:

1. The person to whom discretion is given shall choose the charitable beneficiaries and charitable purposes within a reasonable time after having accepted the duty to select the beneficiaries or purposes of the discretionary charitable gift.
2. If a donor makes a testamentary discretionary charitable gift not in trust and does not expressly designate the person to select the charitable beneficiaries or the charitable purposes, the personal representative of the donor's estate shall select the beneficiaries or the charitable purposes, or both, of the gift.
3. If a donor makes a testamentary discretionary charitable gift in trust and does not expressly designate the person to select the charitable beneficiaries or the charitable purposes, the trustee shall select the charitable beneficiaries or the charitable purposes, or both, of the gift and, if appropriate, shall establish a trust or charitable corporation or other legal entity to implement the discretionary charitable gift.
4. If the court receives notice that the person having the discretion is not ready, willing or able to perform the selection duties within a reasonable time or to establish the trust or other organization, the court shall select the person to exercise the discretion. If the discretionary gift is in trust, the court may exercise the power granted under the Uniform Trust Code, compiled in chapter 15 of this title.

Acts 1997, ch. 300, § 1.

35-13-106. [Repealed.]

Compiler's Notes. Former § 35-13-106 (Acts 1997, ch. 300, § 1), concerning the illegality, impossibility, or impracticability of gifts, was repealed by Acts 2004, ch. 537, § 99, effective July 1, 2004.

35-13-107. Change in tax-exempt status of beneficiary.

IF:

1. a gift made to a trust is to take effect at a date later than the date of the gift instrument; and
2. when the gift instrument is executed, the gift to the trust would qualify for a charitable deduction under the Internal Revenue Code (26 U.S.C.), if the gift were then effective; and
3. the trust, or beneficiary of the trust, loses its tax-exempt status before the gift takes effect; THEN

   the donor shall be presumed to have intended that the trust should be tax-exempt when the gift was to take effect, unless the donor clearly indicated in the gift instrument that the designated beneficiary should receive the gift even if the gift is not eligible for the charitable deduction. The court has jurisdiction to reform the trust by selecting another tax-exempt beneficiary, or to select another tax-exempt trust, and to select one (1) or more charitable purposes of the gift.

Acts 1997, ch. 300, § 1.

35-13-108. Validity under rules of remoteness or rule against perpetuities.

No charitable gift shall fail for remoteness of vesting or for any violation of the rule against perpetuities.

Acts 1997, ch. 300, § 1.

Law Reviews.

Symposium: The Role of Federal Law in Private Wealth Transfer: Comment, Perpetuities and the Genius of a Free State, 67 Vand. L. Rev. 1823 (2014).

35-13-109. Validity where no trustee.

No trust to which a charitable gift or a discretionary charitable gift is or has been made shall fail for lack of a trustee. If there is no trustee, the title to any trust property intended for a charitable purpose shall vest in the clerk of the court that has jurisdiction and venue of the trust as determined under § 35-13-110 until the court either appoints a trustee or orders distribution of the gift.

Acts 1997, ch. 300, § 1.

35-13-110. Attorney general and reporter to be party to court actions affecting gifts — Court approval of disposition.

1. In all court actions directly affecting the amount, administration or disposition of a charitable gift or a discretionary charitable gift, the court may require that the attorney general and reporter be made a party to represent the charitable beneficiaries, potential charitable beneficiaries and all citizens of the state in all legal matters pertaining to the amount, administration and disposition of a charitable gift or discretionary charitable gift. The attorney general and reporter may sue and be sued, and, insofar as the suit against the attorney general and reporter is against the state, the state expressly consents to be sued. The attorney general and reporter may designate a district attorney general to prosecute or defend any court action.
2. It is unlawful to settle any litigation concerning the validity of a charitable gift or discretionary charitable gift without first obtaining the approval of the court. The court shall approve a settlement only after determining that the interest of the people of the state, as true beneficiaries of any charitable gift, has been served.

Acts 1997, ch. 300, § 1.

35-13-111. Venue of court action.

1. If the gift instrument is a will and the estate is in administration, or if the gift under a will is not in trust, the venue of any court action is in the county in which the donor's will was or is being administered.
2. If the gift instrument is an inter-vivos trust or a testamentary trust under a fully administered will, venue of any court action shall be in any county in which a trustee resides, or is located if not an individual, or in which a majority of the beneficiaries, or potential beneficiaries, reside or are located.
3. If neither subsection (a) nor (b) applies, venue is in Davidson County, in a court of competent jurisdiction; provided, that the court may transfer the court action to a more convenient forum.
4. With the consent of the court in which an action is pending, the parties may waive the venue provisions of subsections (a), (b) and (c).

Acts 1997, ch. 300, § 1.

35-13-112. Trust in violation of state or federal law.

If the department of revenue makes a written determination that the operation of a charitable trust violates § 35-9-101 or if the Internal Revenue Service makes such a written determination with respect to the corresponding provisions of the Internal Revenue Code (26 U.S.C.), and provides the written determination to the trustee, the trustee shall furnish a copy of the determination to the attorney general and reporter, and any other person may notify the attorney general and reporter of the determination. The attorney general and reporter may take any action that is deemed necessary to protect the interest of the people of the state.

Acts 1997, ch. 300, § 1.

35-13-113. Construction with other laws.

This chapter is deemed cumulative to any equitable doctrine or remedy or statute having for its object the same or similar purposes of this chapter.

Acts 1997, ch. 300, § 1.

35-13-114. Cy pres.

Section 35-15-413 shall also apply to charitable gifts, as defined in § 35-13-102, whether given before or after April 12, 2007, on the same basis as charitable trusts.

Acts 2007, ch. 24, § 34.

35-14-101. Short title.

This chapter shall be known and may be cited as the “Tennessee Uniform Prudent Investor Act of 2002.”

Acts 2002, ch. 696, § 1.

Compiler's Notes. Acts 2002, ch. 696, § 17 provided that the Tennessee code commission is requested to include the official comments of the National Commissioners on Uniform State Laws in any publication containing the Tennessee Uniform Prudent Investor Act.

Law Reviews.

Symposium: The Role of Federal Law in Private Wealth Transfer: Comment, Pro and Con (Law): Considering the Irrevocable Nongrantor Trust Technique, 67 Vand. L. Rev. 1999 (2014).

35-14-102. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

1. “Governing instrument” means:
   1. A will, deed, trust instrument or agency agreement;
   2. For purposes of subdivision (1)(A), an agency agreement includes but is not limited to, any agreement under which any delegation is made, either pursuant to § 35-15-807 or by anyone holding a power or duty pursuant to chapter 15, part 12;
2. “Trust” means any fiduciary relationship created by a governing instrument; and
3. “Trustee” means any fiduciary as defined in § 35-15-103.

Acts 2002, ch. 696, § 2; 2013, ch. 390, § 2.

Compiler's Notes. Acts 2013, ch. 390, § 55 provided that: (b) Except as otherwise provided in the act, on July 1, 2013:

1. The act applies to all trusts created before, on, or after July 1, 2013;
2. The act applies to all judicial proceedings concerning trusts commenced on or after July 1, 2013;
3. The act applies to judicial proceedings concerning trusts commenced before July 1, 2013, unless the court finds that application of a particular provision of the act would substantially interfere with the effective conduct of the judicial proceedings or prejudice the rights of the parties, in which case the particular provision of the act does not apply and the superseded law applies;
4. Any rule of construction or presumption provided in the act applies to trust instruments executed before July 1, 2013, unless there is a clear and express indication of a contrary intent in the terms of the trust; and
5. An act done before July 1, 2013, is not affected by the act.

If a right is acquired, extinguished, or barred upon the expiration of a prescribed period that has commenced to run under any other statute before July 1, 2013, that statute continues to apply to the right even if it has been repealed or superseded.

35-14-103. Prudent investor rule.

1. Except as otherwise provided in subsection (b), a trustee who invests and manages trust assets owes a duty to the beneficiaries of the trust to comply with the prudent investor rule set forth in this chapter.
2. The prudent investor rule, a default rule, may be expanded, restricted, eliminated, or otherwise altered by the provisions of a trust. A trustee is not liable to a beneficiary to the extent that the trustee acted in reliance on the provisions of the trust.

Acts 2002, ch. 696, § 3.

35-14-104. Standard of care — Portfolio strategy — Risk and return objectives.

1. A trustee shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.
2. A trustee's investment and management decisions respecting individual assets must be evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.
3. Among circumstances that a trustee may consider in investing and managing trust assets the following are relevant to the trust or its beneficiaries:
   1. General economic conditions;
   2. The possible effect of inflation or deflation;
   3. The expected tax consequences of investment decisions or strategies;
   4. The role that each investment or course of action plays within the overall trust portfolio, which may include financial assets, interests in closely held enterprises, tangible and intangible personal property, and real property;
   5. The expected total return from income and the appreciation of capital;
   6. Other resources of the beneficiaries;
   7. Needs for liquidity, regularity of income, and preservation or appreciation of capital; and
   8. An asset's special relationship or special value, if any, to the purposes of the trust or to one (1) or more of the beneficiaries.
4. A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust assets.
5. In addition to the permissible investments listed in §§ 35-3-102 — 35-3-111, a trustee may invest in any kind of property or type of investment consistent with the standards of this chapter.
6. A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee's representation that the trustee has special skills or expertise, has a duty to use those special skills or expertise.
7. The powers granted by this section to trustees, guardians and other fiduciaries shall be in addition to the powers existing under other provisions of this code authorizing investments by fiduciaries.

Acts 2002, ch. 696, § 4.

35-14-105. Diversification.

1. A trustee shall diversify the investments of the trust:
   1. Unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying, or
   2. Except as otherwise provided in subsection (b).
2. 1. In the absence of express provisions to the contrary in the governing instrument, a fiduciary may without liability continue to hold property received into a trust at its inception or subsequently added to it or acquired pursuant to proper authority if and as long as the fiduciary, in the exercise of good faith and reasonable prudence, discretion and intelligence, may consider that retention is in the best interest of the trust and its beneficiaries or in furtherance of the goals of the trustor as determined from that instrument. Such property may include capital stock in the corporate fiduciary and stock in any corporation controlling, controlled by or under common control with such fiduciary; and the fiduciary may acquire additional shares of such stock by stock dividends, stock splits, exchanges and conversions for other stock or debentures and exercise of rights to acquire stock of the corporation or another corporation acquiring the stock of the corporation by merger, consolidation or reorganization.
   2. In the absence of express provisions to the contrary in the governing instrument, a deposit of trust funds at interest in any bank, savings and loan association or other financial institution (including the fiduciary and an affiliated depository institution) shall be a qualified investment to the extent that such deposit is insured under any present or future law of the United States. The fiduciary may also hold deposits in such institutions without interest in reasonable amounts and for reasonable times for operating expenses, anticipated distributions and pending investments.
3. 1. Notwithstanding any other provision of this chapter to the contrary, and except as otherwise provided in the governing instrument, the duties of a trustee regarding the acquisition, retention or ownership of a contract of insurance on the life of the grantor of the trust, or on the lives of the grantor and the grantor's spouse, children, grandchildren, or parents, do not include a duty to:
      1. Determine whether any contract of life insurance in the trust, or to be acquired by the trust, is or remains a proper investment;
         1. As to the type of insurance contract;
         2. As to the quality of the insurance company;
         3. Or otherwise.
      2. Diversify the investment; or
      3. Exercise any policy options, rights, or privileges available under any contract of life insurance in the trust, including any right to borrow the cash value or reserve of the policy, acquire a paid-up policy, or convert to a different policy.
   2. The trustee is not liable to the beneficiaries of the contract of insurance or to any other party for loss arising from the absence of these duties regarding insurance contracts under this subsection (c).

Acts 2002, ch. 696, § 5.

35-14-106. Duties at inception of trusteeship.

Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee shall review the trust assets and make and implement decisions concerning the retention and disposition of assets, in order to bring the trust portfolio into compliance with the purposes, terms, distribution requirements, and other circumstances of the trust, and with the requirements of this chapter.

Acts 2002, ch. 696, § 6.

35-14-107. Loyalty.

A trustee shall invest and manage the trust assets solely in the interest of the beneficiaries.

Acts 2002, ch. 696, § 7.

35-14-108. Impartiality.

If a trust has two (2) or more beneficiaries, the trustee shall act impartially in investing and managing the trust assets, taking into account any differing interests of the beneficiaries.

Acts 2002, ch. 696, § 8.

35-14-109. Investment costs.

In investing and managing trust assets, a trustee may only incur costs that are appropriate and reasonable in relation to the assets, the purposes of the trust, and the skills of the trustee.

Acts 2002, ch. 696, § 9.

35-14-110. Reviewing compliance.

Compliance with the prudent investor rule is determined in light of the facts and circumstances existing at the time of a trustee's decision or action and not by hindsight.

Acts 2002, ch. 696, § 10.

35-14-111. Delegation of investment and management functions.

1. A trustee may delegate investment and management functions that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill, and caution in:
   1. Selecting an agent;
   2. Establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and
   3. Periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation.
2. In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.
3. A trustee who complies with the requirements of subsection (a) is not liable to the beneficiaries or to the trust for the decisions or actions of the agent to whom the function was delegated.
4. By accepting the delegation of a trust function from the trustee of a trust that is subject to the law of this state, an agent submits to the jurisdiction of the courts of this state.

Acts 2002, ch. 696, § 11.

35-14-112. Language invoking standard of act.

The following terms or comparable language in the provisions of a trust, unless otherwise limited or modified, authorizes any investment or strategy permitted under this chapter: “investments permissible by law for investment of trust funds,” “legal investments,” “authorized investments,” “using the judgment and care under the circumstances then prevailing that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital,” “prudent man rule,” “prudent trustee rule,” “prudent person rule,” and “prudent investor rule.”

Acts 2002, ch. 696, § 12.

35-14-113. Application to existing trusts.

1. This chapter applies to trusts existing on and created after July 1, 2002. As applied to trusts existing on July 1, 2002, this chapter governs only decisions or actions occurring after that date.
2. This section shall not apply in any situation governed by the Uniform Veterans Guardianship Act, compiled in title 34, chapter 5.

Acts 2002, ch. 696, § 13.

35-14-114. Court authority.

Nothing in this chapter abrogates or restricts the power of an appropriate court in proper cases to direct or permit the fiduciary to deviate from the terms of the governing instrument or restrains a fiduciary from taking any action regarding the making or retention of investments.

Acts 2002, ch. 696, § 14.

Part 1
General Provisions and Definitions