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

Tag Archives: national prearranged services

The High Cost of Litigation: Copy Charges

Posted in NPS/Lincoln
The Special Deputy Receiver for National Prearranged Services recently filed a Bill of Costs with the Federal trial court.  The Bill of Costs seeks to recover copy charges of more than $500,000 from a former NPS trustee.  Those costs do not include attorneys’ fees.  Litigation can be very costly. Missouri’s preneed regulators are keenly aware of the costs of… Continue Reading

NPS’ Legacy of Damages: No One Knows How Deep the Waters Were

Posted in Associations, Exams/audits, Master Trusts, Missouri - SB1, NPS/Lincoln, Recordkeeping
When NPS first collapsed, the estimate of the company’s liabilities to funeral homes was reported to have been as much as a billion dollars.  When the SDR finally brought the case to trial, the damages awarded by the jury were less than half of the original estimate.   While this author believes the actual damages are… Continue Reading

NPS Trustees: Standard of Care for Investments

Posted in Compliance, Investments, Missouri - SB1, NPS/Lincoln
Now that a judgment has been rendered against Allegiant Bank, the NPS litigation will move on to the appeal stage where the focus will be on R.S.Mo. Section 436.031.  The NPS trustees universally argued that this provision of the Missouri preneed statute relieved them of all responsibility and liability for investment supervision.  As set out… Continue Reading

NPS Trustees: Standard of Care for Preneed Administration

Posted in Administration, Compliance, Missouri - SB1, NPS/Lincoln, Recordkeeping
Final arguments were heard in the NPS civil trial this past Friday.  With the SDR having presented evidence through the prior Friday, the defendant trustees presented their case in less than a week.  This may reflect that the NPS trustees had viewed their duties as having been defined by Chapter 436 as relatively low.  As… Continue Reading

NPS Trustees: Pre-acceptance Due Diligence

Posted in Compliance, Fiduciary, Missouri - SB1, NPS/Lincoln
The Office of the Comptroller of the Currency (the OCC) supervises the fiduciary activities of national chartered banks, and in February, updated the guidelines used by its examiners.  The “Personal Fiduciary Activities” booklet includes a section on pre-acceptance due diligence that fiduciaries should conduct before agreeing to serve as trustee for an account.  Page 7… Continue Reading

Groundhogs Day 2015: Six Weeks of NPS Civil Trial

Posted in NPS/Lincoln
The National Prearranged Services civil trial is scheduled to begin this week, and trial briefs have been filed with the Court.  The briefs outline the arguments that each party plans to prove during the course of the trial.  It is our understanding that the Special Deputy Receiver has settled with all defendant trustees except Allegiant… Continue Reading

Questions for the Jury: the mirror trust account

Posted in Administration, Compliance, Investments, NPS/Lincoln
A recent order issued by the Federal Court trying the NPS civil suit referenced a mirror trust employed by the defendant bank (12-31-14 Order – Comerica MSJ ).  To facilitate the trading of investment securities, a brokerage account is established with a firm that can administer the transactions more efficiently than the fiduciary institution.   The fiduciary… Continue Reading

Question for The Jury: Exculpatory Clauses and Preneed Investment Supervision

Posted in Associations, Investments, Master Trusts, NPS/Lincoln
It is common for master preneed trusts to have investments directed by an independent fund manager.  The pooling of smaller trusts allows funeral directors to achieve the critical mass needed to engage professional asset management.  When investment functions are delegated, the trustee typically wants to be relieved of the supervision and liabilities that accompany those… Continue Reading

Getting Personal: liability and the preneed trust officer

Posted in Administration, Compliance, Investments, Master Trusts, NPS/Lincoln
Earlier this week, the Federal Court that is to try the NPS civil lawsuit next month issued an order (Order denying Morisse JOP Mtn) that will raise red flags for the banks that serve as preneed trustees.  In denying the motion of an officer of Allegiant Bank, Judge Richard Webber held that the Special Deputy Receiver… Continue Reading

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

An immaterial witness: Doug Cassity

Posted in NPS/Lincoln, Uncategorized
Doug doesn’t have much faith in the legion of attorneys retained by the country’s largest banks.  Mr. Cassity has filed a writ of habeas corpus ad testificandum that argues only he can effectively cross examine witnesses to NPS’ compliance with the 1994 consent judgment.   Mr. Cassity argues that NPS could legally withdraw from trust all funds in… Continue Reading

Plaintiff’s Star Witness: Doug Cassity

Posted in Insurance Funded, NPS/Lincoln, Preneed Tax, Trust Funded, Uncategorized
The NPS civil trial is scheduled for trial in February 2015, and the SDR’s strategy took a twist when her litigation team filed a motion to dismiss Doug Cassity as a defendant in the lawsuit.  The dismissal probably signals the SDR’s intent to use Mr. Cassity’s testimony.  Now convinced that Mr. Cassity does not have… Continue Reading

The Cassity Plea Agreement: Extenuating Circumstances

Posted in NPS/Lincoln
I have only scanned Doug Cassity’s plea agreement once, but two issues jumped out from that document.  The plea agreement is based on the US Sentencing Guidelines, and Page 28 of agreement explains that the Government and the defendant did not agree as to whether guidelines relating to economic losses should be applicable to Mr.… 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

Coming This August: The Nuremberg Trial

Posted in NPS/Lincoln
 Once again, I have spoken too quickly. After lamenting to the Memorial Business Journal that the NPS plea bargains will deprive consumers and the industry the opportunity to hear how Doug and his crew perpetrated so many frauds, the sole remaining NPS defendant may grant my wish. As the Funeral Service Insider reports that Herr… Continue Reading

The Cassity Plea: A new shell game?

Posted in NPS/Lincoln, Preneed
 This was not the ending that most expected. After decades of playing shell games with regulators and funeral homes, Doug Cassity accepted a plea bargain rather than go to trial. Brent Cassity also accepted a plea bargain, and the St. Louis Post Dispatch reports that attorneys for one of the remaining defendants were scurrying to… Continue Reading

The NPS Recovery Plan: two hurdles to liftoff

Posted in Missouri - SB1
On December 12th, a Missouri coalition of NPS preneed providers will have a second opportunity to state their case for legislation to establish a NPS recovery plan. As we noted back in September, that coalition should anticipate a tepid reception from the State Board of Embalmers and Funeral Directors (and much of the Missouri funeral… Continue Reading