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Senate clarifies rules for beneficiary-funding contracts in probate proceedings
Summary
Senate Bill 233 sets disclosure and judicial-approval requirements for contracts in which a beneficiary sells a portion of a pending inheritance to a funding company; the chamber approved the bill after adopting an amendment limiting who may challenge such contracts.
The Utah Senate on Thursday passed Senate Bill 233, a measure that codifies procedures and court oversight for beneficiary‑funding agreements used by heirs to access portions of expected inheritances during ongoing probate proceedings.
Senator Dan Hemmert (presenting under the name Senator Collamore in floor remarks) explained that beneficiary‑funding firms advance funds to heirs in exchange for an assignment of a portion of a future inheritance on a non‑recourse basis. The bill requires conspicuous disclosure in any such contract and—critically—judicial approval for the agreement to become part of the court record.
Senator Collamore offered and the Senate adopted an amendment that narrows who may challenge a beneficiary‑funding contract, clarifying that the contract review process is limited to specified parties to protect the estate administration process while preserving judicial oversight.
"This bill provides for judicial approval of these contracts. So it becomes a part of the court record," the sponsor said, adding the legislation sets out clearance and conspicuous disclosure requirements for parties entering such agreements.
The Senate recorded 27 yeas, 0 nays and 2 absences on the third‑reading roll call; the bill was approved and will move forward for enrollment and transmittal to the House as required.
Key provisions include mandatory disclosures, court oversight and a challenge mechanism narrowed by amendment so that specified estate parties have standing for review.
