Colorado Bill on Legacy Giving to Charities

CO Legislature Bill Search

Published January 1st, 2026

Detected March 14th, 2026

Summary

Colorado bill SB26-118 establishes new requirements for financial institutions regarding the payment of designated benefits to charities upon a donor's death. Covered entities must pay benefits within 60 days of receiving an affidavit, with specific provisions for handling creditor claims and preventing certain account or personal information requirements.

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What changed

Colorado bill SB26-118 introduces new regulations for banks, broker-dealers, depository institutions, credit unions, and financial or institutional investors concerning legacy gifts to charities. The bill mandates that these covered entities must pay designated benefits to a charitable organization within 60 calendar days after the charity submits an affidavit attesting to the donor's death. Exceptions exist if federal law requires specific actions, in which case compliance must occur within 120 days of the affidavit submission. The bill also outlines procedures for charitable organizations to return portions of benefits to the donor's estate to satisfy outstanding claims, such as creditor claims or elective shares, within 60 days of notice, and requires them to hold benefits in constructive trust. Furthermore, covered entities are prohibited from requiring charities to open accounts or employees to submit personal information as a condition of receiving designated benefits.

Covered entities, including financial institutions and investors, must update their internal processes to comply with the 60-day payment deadline and the procedures for handling potential outstanding claims. Charitable organizations receiving legacy gifts must establish protocols for verifying donor death, submitting affidavits, and managing potential liabilities related to creditor claims or elective shares, including holding funds in constructive trust and returning portions to the estate within specified timelines. Failure to comply by charitable organizations may result in statutory interest penalties. The bill may be enforced by the division of banking, the financial services board, or the division of securities, indicating potential regulatory oversight and enforcement actions for non-compliance.

What to do next

Review and update internal policies and procedures for processing legacy gifts to charities to ensure compliance with the 60-day payment deadline.
Develop protocols for charitable organizations to handle affidavits, outstanding claims, and constructive trusts as outlined in the bill.
Ensure compliance with prohibitions against requiring new accounts or personal information from charities as a condition of receiving benefits.

Penalties

Charitable organizations failing to return portions of benefits to satisfy outstanding claims may be liable for statutory interest to the donor's estate. The bill may be enforced by state regulatory divisions, implying potential regulatory actions for non-compliance.

Source document (simplified)

SB26-118

Legacy Giving to Charitable Organizations

| Type | Bill |
| --- | --- |
| Session | 2026 Regular Session |
| Subjects | Financial Services & Commerce Probate, Trusts, & Fiduciaries |
Concerning the payment of designated benefits to a charitable organization upon the death of a donor.

Recent Bill (PDF) Recent Fiscal Note (PDF) Bill Summary:

The bill requires a bank, broker-dealer, depository institution, credit union, or financial or institutional investor (covered entity) that holds benefits that are designated by a donor to a charitable organization to pay the designated benefits not later than 60 calendar days after the charitable organization submits an affidavit attesting to the death of the donor and including certain other information, except as described in federal law. If a covered entity that holds designated benefits is unable to pay the designated benefits to a charitable organization because federal law requires the covered entity to take certain actions or satisfy certain criteria in order to pay the designated benefits, the covered entity must take such actions or satisfy the criteria and comply with the bill not less than 120 days after the charitable organization submits the affidavit to the covered entity.

If a charitable organization receives designated benefits that concern a creditor claim, statutory allowance, or elective-share or supplemental elective-share claim (outstanding claim) for which the charitable organization may be liable, the charitable organization must return to the donor's estate a portion or all of the designated benefits in order to satisfy the outstanding claim within 60 days after receiving written notice of the liability, with certain exceptions. If the charitable organization fails to comply, it must pay statutory interest to the donor's estate for each day the unreturned amount remains outstanding. Upon receiving notice of the outstanding claim from the personal representative of the donor's estate, the charitable organization must hold all or a portion of the designated benefits in a constructive trust pending a determination of the outstanding claim. Moreover, the charitable organization may be subject to one or more court actions.

A covered entity that holds benefits that are designated to a charitable organization shall not:

Require the charitable organization to establish an account with the covered entity as a condition of receiving the designated benefits; or
Require an individual employed by, or serving on the board of, the charitable organization to submit personal information as a condition of receiving designated benefits. The bill may be enforced by the division of banking, the financial services board, or the division of securities, as appropriate.

(Note: This summary applies to this bill as introduced.)