An important piece of legislation passed both the House and Senate unanimously this spring. It still awaits the Governor’s signature, but it is exciting nonetheless!

The LIFT (Legacy Impact through Fair Transfers) Act (HB4206 / SB2748) tightens up how financial institutions treat charities. In a nutshell, financial institutions cannot be slow in transferring non-probate gifts to charities nor require charities to open accounts just to receive those gifts. The LIFT Act sets a standard for faster, more efficient transfers, reducing administrative delays, and helping charities put donated dollars to work sooner.

Sounds like a common-sense law or procedure that should have already been in place!

Some details for clarity:

a) This law only applies to non-probate gifts where the nonprofit is listed as the beneficiary, such as retirement accounts, annuities, and other payable/transfer-on-death accounts. This law does not apply to charitable gifts left in wills or trusts;

b) “Charities and nonprofits” applies to houses of worship, community foundations, and direct service providers;

c) Prohibits financial institutions from requiring a charity to establish an account to receive a gift;

d) Creates a right of action for financial institution noncompliance;

e) Requires financial institutions to notify charities about the existence of a decedent’s asset;

f) Creates an affidavit process for charities to obtain information about an asset or request its delivery;

g) Sets required notification and transfer timelines (30 days);

h) Prohibits financial institutions from requiring a charity to establish an account to receive a gift;

i) Bars financial institutions from seeking charitable employees’ or board members’ personal information in order to process the gift/transfer of asset;

j) As of this writing, the Act is awaiting the Governor’s signature;

k) When signed, this law will become effective January 1, 2027.

After reading these details, it’s disheartening to know that some financial institutions throughout Illinois treat charities so shabbily. Aside from the LIFT Act, many individuals and companies treat nonprofits like second-class citizens, so it is refreshing to see legislation aimed toward acknowledging us for the professionals that we are.

Tip for donors: If you own an asset where you can name a beneficiary (insurance, annuity, IRA, etc.), please consider changing the beneficiary to your favorite charity. You will need to get the charity’s EIN and then complete a “change of beneficiary” form – then please notify the charity of this action so they can be watching for it after your lifetime.

Tip for nonprofits: Please have communications with your donors about the non-cash assets that they can gift to you upon their death. If they tell you that your charity is now the beneficiary of an asset (with specifics), you can watch to make sure this new law is followed.

Tip for financial institutions: Please update your policies and procedures to assure that your company complies with this new law starting 1/1/27.

It is becoming more and more popular for donors to name their favorite charity as a beneficiary, so the timing of this new law is excellent!

Big shout-out to the Jewish United Fund and Forefront for taking the lead on advocating for this legislation with the General Assembly. Big “thank you” to all six (6) of our Senators and Representatives who voted “Yes.” I have sent them notes of thanks – I hope you will, too!!

Julianne Buck is the Executive Director of the Community Foundation of Grundy County, located in the historic Coleman Hardware Building at 520 W. Illinois Avenue in Morris. You can contact her via phone at 815-941-0852 and julie@cfgrundycounty.com