Death Care Compliance Law

Death Care Compliance Law

Preneed: A Pandora's Box of Problems

William Stalter is the founder of Stalter Legal Services and the Preneed Resource Company. Bill focuses his law practice on preneed and death care compliance, serving banks, funeral homes, crematories, and cemeteries. He has written multiple published articles

Category Archives: Master Trusts

Subscribe to Master Trusts RSS Feed

Investment Advisors: How Independent?

Posted in Compliance, Investments, Master Trusts, NPS/Lincoln
In a motion for rulings of law, the NPS Special Deputy Receiver seeks a judicial determination of two legal issues that could impact preneed trustees subject to the jurisdiction of the Eighth Circuit of Federal Court of Appeals: the beneficiary status of preneed purchasers (and funeral homes) and the required independence of investment advisors.  These two … Continue Reading

Consumers Payment Options: Administrative Hurdles and Preneed Trusts

Posted in Administration, Associations, Compliance, Master Trusts, Non-guaranteed, NPS/Lincoln, Recordkeeping, Trust Funded
There are three scenarios for administration of preneed installment payments: the funeral operator collects payments, the trustee collects payments or a third party administrator collects payments.  The entity collecting installment payments must be able to apply each payment to the correct preneed account, and provide the other party (or parties) current payment balances.  If the … Continue Reading

Consumer Options and Administrative Hurdles: Market Value Allocations

Posted in Administration, Associations, Compliance, Master Trusts
The conventional guaranteed preneed transaction is premised upon investment returns offsetting performance cost increases to the funeral home.  Many funeral homes restrict consumers to single payment preneed contracts to limit their exposure to funding short falls.  If the funeral home allows the consumer to pay the preneed purchase price over 60 months, the preneed trust … Continue Reading

The Fed’s Tapering Plan: A Bumpy Road for Death Care Trusts?

Posted in Compliance, Investments, Master Trusts, Uncategorized
It has been almost ten years since the return on Government bonds fell below 5%.  But bond returns did not hit bottom until four years later when the sub-prime mortgage market collapsed.  Those conditions threatened the nation’s credit markets, and so, in 2008, the Federal Reserve Board initiated a stimulus program involving the purchase of … Continue Reading

Qualified Funeral Trusts: once a simple concept

Posted in Master Trusts, Non-guaranteed, Preneed Tax, Taxes, Uncategorized
In has been almost twenty years since the Balanced Budget Act of 1995 introduced the concept of a simplified tax return for preneed trusts.  Initially, the “Qualified Funeral Trust” concept called for a flat 15% tax on accounts with contributions of $5,000 or less.  A conference committee succeeded in getting a higher contribution limitation ($7,000) … Continue Reading

The Wisconsin Master Trust: Between a Rock and a Hard Place

Posted in Funeral, Master Trusts, Preneed
In a motion to convert the Wisconsin Master Trust from a preneed trust to a liquidating trust, the Receiver outlined to the court why the trust cannot keep its promises to consumers and comply with Wisconsin’s preneed law. Section 445.125 restricts preneed funeral trusts to depository accounts, and CD returns won’t even pay the Master … Continue Reading

The Bernanke Factor: The New Volatility for Death Care Trusts

Posted in Investments, Master Trusts, Preneed
A Missouri preneed auditor recently requested an explanation from a client why certain accounts were underfunded.  The handful of accounts were “underfunded” by varying amounts of a few dollars to twenty dollars.  The common fact with each was an initial deposit or substantial deposit in the month preceding the Federal Chairman’s remarks that sent the … Continue Reading

The NPS Criminal Trial: Vicarious Liability?

Posted in Fiduciary, Investments, Master Trusts, NPS/Lincoln, Preneed
David Wulf may stand alone in the crosshairs of the criminal prosecutors, but his fate will impact the NPS preneed trustees (and possibly other registered investment advisors who manage death care funds). Mr. Wulf had a situation that is unique from what existed in Illinois, Wisconsin, and Tennessee, but is familiar to other death care … Continue Reading

Wisconsin: Breaking the Settlement Logjam

Posted in Funeral, Master Trusts, Preneed
In prior posts we have documented certain similarities between the old IFDA master trust and the Wisconsin master trust, and our Illinois clients have expressed sympathy for their colleagues to the north. But, key differences exist between the two master trusts, and the recent settlement agreement offered to Wisconsin funeral homes is an indication that … Continue Reading

Master Trusts: Finding the Rails

Posted in Fiduciary, Guaranteed, IFDA, Master Trusts, Missouri - SB1, Non-guaranteed, Preneed, Trust Funded
Both the Memorial Business Journal and the Funeral Service Insider commented last week on the Milwaukee Journal Sentinel’s February 7th article regarding the former executive director of the Wisconsin Funeral Directors Association. Several issues were raised that should be included in future industry debate, and in particular, I would agree with Mr. Isard’s questions whether … Continue Reading

A False Sense of Security: the hold harmless for investment oversight

Posted in Funeral, Master Trusts, Preneed
We previously discussed how the funeral home or cemetery assumes most of a preneed trust’s investment risk when selling a guaranteed preneed contract, and therefore should be afforded a role in the trust’s investment decisions (Fund Managers: Is Your O&E Coverage Current?). But in that same post, we were careful to point out that there … Continue Reading

A Peace Offering: Fiducary Partners and the WFDA Receiver

Posted in Fiduciary, IFDA, Master Trusts
Fiduciary Partners, the corporate fiduciary for the Wisconsin and Illinois master trusts, broke its silence this week with a statement to the Funeral Service Insider. The statement was made in response to criticisms previously reported by FSI, and reflects the receiver and fiduciary working together to get their “message” out and avoid the kind of … Continue Reading

Checks and Balances: Who has your back?

Posted in Administration, Fiduciary, Master Trusts, Preneed
In the days that followed the Wisconsin Funeral Directors Association being placed into receivership, some of the WFDA’s sister associations were quick to point out they had ‘checks and balances’ that would protect consumers’ funds from the problems that tripped up the Wisconsin Funeral Trust. As we reported in our last post, a crucial ‘check … Continue Reading

Wisconsin: borrowing from the NPS playbook

Posted in Funeral, Master Trusts, Preneed
Recent document disclosures are reflecting that several factors contributed to the WFDA’s master trust deficiency (and the appointment of a receiver). Certain of those factors relate to the fees paid to fund managers and the association’s sponsorship charges. Those factors are relevant to other association master trusts, and we will explore them in subsequent posts. … Continue Reading

Wisconsin: Where is the Love?

Posted in Funeral, Master Trusts
When news of the Wisconsin receivership was made public, I anticipated some signs of support from other state associations. The strength of a professional relationship can be measured by the support given subsequent to a public indictment. But, when that support comes in the form of hackneyed advice, the accused is left to wonder about … Continue Reading

One Too Many Guarantees: Wisconsin and the SEC

Posted in Fiduciary, Funeral, Master Trusts
When news that the Wisconsin Funeral Directors Association and its master trust had been put into receivership, I anticipated that the association may have fallen victim to a perfect storm: when an antiquated preneed law collides with a volatile investment market. But, subsequent news accounts are painting a bleak picture of poor planning and poor … Continue Reading

Preneed Fund Manager: Is your O&E coverage current?

Posted in Fiduciary, Master Trusts, Preneed
Many state preneed regulators share the point of view that the payments made toward a preneed contract belong to the consumer until the prearranged funeral is provided. This perspective was adopted by the California Attorney General in its Eighth Cause of Action brought against the California Funeral Directors Association and its Master Trust. The AG … Continue Reading

The Independent Preneed Trustee: In a Perfect World

Posted in Administration, Exams/audits, Master Trusts, Preneed, Recordkeeping
A breakdown in communications between the CFDA and the Cemetery and Funeral Bureau has resulted in the California Attorney General filing a lawsuit that can be appropriately described as vitriolic. The “California lawsuit” could provide some valuable ‘what to avoid” lessons for regulators in other states. In an unusual move, the Bureau went “public” last … Continue Reading