2023 Tennessee Code › Title 45 - BANKS AND FINANCIAL INSTITUTIONS (§§ 45-1-101 — 45-20-111) › Chapter 2 - BANKING INSTITUTIONS (§§ 45-2-101 — 45-2-2204) › Part 10 - FIDUCIARY POWERS (§§ 45-2-1001 — 45-2-1021) › Section 45-2-1008 - Transfer of fiduciary accounts - Substitute fiduciaries

(a)
Absent written objection from the commissioner, a bank, trust company or trust department, referred to in this section as the "transferor," may transfer one (1) or more fiduciary accounts administered by the bank, trust company or trust department to another bank, trust company or trust department, referred to in this section as the "transferee"; provided that the transferee bank has trust powers.
(b)
Approval of the commissioner shall be deemed granted in the absence of written objection from the commissioner within ten (10) business days after receipt by the commissioner of written notice from the transferor bank of the proposed transfer.
(c)
(1)
Within thirty (30) days after the date of the transfer of the fiduciary accounts, the transferor shall send written notice by first class mail to the last known address (as then set forth on the records of transferor, or if not set forth, as may be determined by the transferor in the exercise of reasonable diligence) of the following persons or entities:
(A)
For employee benefit plans, to the plan sponsors;
(B)
For individual retirement accounts and retirement accounts for the self-employed, to the account owners;
(C)
For agency and escrow accounts, to the principals;
(D)
For securities for which a transferor bank serves as trustee, registrar, transfer agent or paying agent, to the issuers;
(E)
For revocable trusts under agreement, to the settlors;
(F)
For irrevocable trusts under agreement, to any co-fiduciary, to the settlor, to each current income beneficiary who is an adult, and if a current income beneficiary is a minor, to a parent of the minor with whom the minor resides or to the conservator or guardian of the minor. For purposes of this subsection (c), "current income beneficiary" means a person currently entitled to income from a trust or a person to whom the trustee, in the trustee's discretion, may currently pay principal or income;
(G)
For testamentary trusts, to the persons notified under subdivision (c)(1)(F);
(H)
For conservatorships, to any co-fiduciary, to the protected person for whom the conservatorship was created, or if the conservatorship was created for a minor, to a parent of the minor with whom the minor resides or to the guardian of the minor;
(I)
For guardianships, to any co-fiduciary, to the minor or legally incapacitated person for whom the guardian was appointed if the ward is at least fourteen (14) years of age;
(J)
For probate estates, to any co-fiduciary, to the surviving spouse, if any, and to those persons notified pursuant to subdivision (c)(1)(G); and
(K)
For corporate trust indentures to the issuer of the securities subject to each indenture; provided, that notwithstanding the foregoing, the transferor may, if it deems it appropriate, comply with any notice procedures contained in the trust indenture instrument with respect to succession of trustees.
(2)
For purposes of this section, notice shall be deemed effective when mailed by the transferor. Should the transferor learn after the expiration of thirty (30) days from the transfer that through inadvertence, error, neglect or otherwise, notice was not mailed as herein provided, delayed notice may be given in the manner set forth herein. The recipient of the notice shall then have thirty (30) days to object to the transfer as provided in subsection (d).
(d)
(1)
Any person given notice pursuant to subsection (c) may file a written objection to the fiduciary transfer with the commissioner, stating grounds for objection, within thirty (30) days of receipt of notice of the transfer by the person notified pursuant to subsection (c). The transferor shall then have thirty (30) days to either:
(A)
Abandon the transfer of fiduciary accounts to which objection was given and hold the transfer for nought; or
(B)
Submit a written response to the commissioner addressing the objections to the transfer. The commissioner shall either approve or deny the transfer.
(2)
Nothing shall preclude the transferor from appointing a related bank, trust company or trust department as its agent for the performance of any and all fiduciary obligations as provided in subsection (h).
(e)
(1)
Within a reasonable time after the date of a transfer of the fiduciary accounts in accordance with the procedures set forth in subsections (c) and (d), the transferor shall file an affidavit in the office of the chancery court of the county in which the main office of the transferor is located; and from time to time, the transferor may file a copy of the affidavit in the office of the chancery court in other counties that the transferor deems appropriate. The affidavit shall set forth the names and addresses of the transferor and transferee, identification of the fiduciary accounts transferred that the transferor deems appropriate, and other information that the transferor deems desirable.
(2)
In the event that notice of objection to the transfer is received by the transferor after the filing of record of the original affidavit with respect to the transfer, and in the event that pursuant to subsection (d), the transfer is abandoned, the transferor shall promptly file notice of the abandonment in the office of the appropriate chancery court.
(f)
If a bank, trust company or trust department completes a fiduciary transfer, the bank, trust company or trust department to which the fiduciary accounts have been transferred shall be automatically substituted as the fiduciary of all the accounts so transferred without further action and without any order or decree by any court or public officer; and without the transfer being treated or considered as a resignation by the transferor as a fiduciary; and the transferee bank, trust company or trust department shall have all the rights, duties, responsibilities, obligations and liabilities, financial or otherwise, of the transferor bank with respect to the accounts. A bank, trust company or trust department that completes a fiduciary transfer shall be relieved as fiduciary without an accounting and without any order or decree of any court or public officer, and prospectively shall have no continuing duties, responsibilities, obligations or liabilities, financial or otherwise, with respect to the accounts transferred. The transfer shall not, however, relieve the transferor bank of liability on the transferee for action or inaction prior to the transfer, nor shall it impose liability on the transferee for action or inaction of the transferor prior to the transfer. The transfer shall not constitute a relinquishment of trust powers by the transferor bank.
(g)
(1)
A transferor bank, trust company or trust department is related to a transferee bank, trust company or trust department if:
(A)
The transferee controls the transferor;
(B)
The transferor controls the transferee;
(C)
The same entity controls, directly or indirectly, the transferor and the transferee;
(D)
A majority of the directors of the transferor are directors of the transferee; or
(E)
A majority of the directors of the transferee are directors of the transferor.
(2)
"Control" and "controls," as used in subdivision (g)(1), means the ownership of a majority of the voting shares of another bank, trust company or of the bank operating the trust department.
(h)
(1)
Regardless of objection to any fiduciary transfer as provided in subsection (d) and the outcome of the objection, and notwithstanding any procedure under this chapter, any bank may appoint a related bank, trust company or trust department as its agent for the performance of any or all acts, obligations and responsibilities of the bank with respect to any fiduciary account. A bank, trust company or trust department may also delegate, to an unrelated party pursuant to a written agreement, any investment, management or administrative function if the bank, trust company or trust department exercises reasonable care, judgment and caution in:
(A)
Selecting the agent, taking into consideration the agent's financial standing and reputation;
(B)
Establishing the scope and other terms of any delegation; and
(C)
Reviewing periodically the agent's actions in order to monitor overall performance and compliance with the scope and other terms of the delegation.
(2)
In the event of a delegation pursuant to subdivision (h)(1), the appointing bank shall remain fully responsible and liable with respect to all actions of the related bank, trust company, trust department or unrelated party as if performed by the appointing bank itself. The agency relationship shall not:
(A)
Be deemed an impermissible delegation of responsibility or duty by the appointing bank;
(B)
Constitute a resignation or disqualification of the appointing bank as fiduciary or relinquishment of trust powers by the appointing bank; or
(C)
Require the consent of any person, entity, court or other governmental authority.
Acts 1984, ch. 691, §§ 2-5; 1987, ch. 300, §§ 2, 3; 1995, ch. 768, § 22; 1999, ch. 112, § 8; 2010, ch. 725, § 23.