Senate Bill 1106 amends Tennessee Code Annotated, Section 56-7-203, which pertains to the exemption of life insurance and annuity proceeds from creditor claims. The bill replaces the existing language with a new provision that clarifies that the net amount payable under any life insurance policy or annuity contract, when made for the benefit of or assigned to a spouse, children, or dependent relatives, is exempt from all creditor claims. This includes protections against execution, attachment, seizure, and garnishment for obligations created after January 1, 1932. Additionally, the bill specifies that the use of exempt funds does not alter their classification from exempt to nonexempt.

The motivation behind this legislative change stems from concerns raised by members of the Tennessee bar and judiciary regarding the interpretation of terms such as "for the benefit of" and "all." The bill aims to provide clarity and certainty for individuals planning for retirement, thereby encouraging retirees to consider Tennessee as a favorable state for relocation. The act is set to take effect on July 1, 2025.

Statutes affected:
Introduced: 56-7-203