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: prearrangement

MyRA: Is preneed headed in a similar direction?

Posted in Funeral, Preneed, Preneed Development, Preplanning
President Obama used his State of the Union address to unveil a new type of retirement account dubbed “MyRA”.  Recognizing that Americans are woefully unprepared for their retirement years, the President believes the MyRA offers individuals a safe option to induce them to begin saving for those golden years.  A CNBC report provides an explanation … Continue Reading

The Medicare Tax and QFTs: Don’t look a gift horse in the mouth

Posted in Administration, Preneed, Preneed Tax, Taxes, Trust Funded
 Over the past few years, preneed trust administrators have been wondering whether a Section 685 qualified funeral trust could look to each individual trust’s income and apply the lower tax rates for long term capital gains and qualified dividends.  The issue has taken on more relevance as preneed trusts look to diversify out of fixed … Continue Reading

Too Literal of an Interpretation: Mississippi and Preneed Taxes

Posted in Preneed, Preneed Tax, Reporting
The Mississippi Secretary of State seems to be taking a very proactive approach to the regulation of preneed and perpetual care funds. Over the course of the last few years, the Regulation and Enforcement Division of the Secretary of State’s office has averaged an enforcement proceeding per month. We were curious what type of enforcement … 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

Cemetery Preneed Challenges: bucket accounting

Posted in Cemeteries, Preneed
As alluded to in our prior post, the cemetery’s ability to deliver burial rights and merchandise prior to death complicates the preneed transaction.  In a post, we labeled this the ‘bucket factor’ (Cemetery Preneed Oversight: the bucket factor).  In addition to burial spaces, cemeteries can deliver markers, monuments, vases, urns, outer containers and vaults prior … Continue Reading

Another factor in the cremation trend: preneed insurance premiums

Posted in Cremation, Guaranteed, Insurance Funded, Preneed, Preplanning
Our preneed provides peace of mind by freeing your family from the burdens of rising funeral costs and from making difficult decisions during their time of grief. Since the inception of the transaction sixty years ago, that statement has defined preneed marketing. Even the AARP recently embrace the peace of mind concept. The inflationary protection … Continue Reading

Preneed Contract Forms: Worth The Paper They’re Written On?

Posted in Compliance, Exams/audits, Funeral, Insurance Funded, Preneed, Recordkeeping, Trust Funded
With the exception of a few states, each form of preneed funding has its own statutory requirements. Consequently, different contract forms are required for each method of preneed funding. So, what does this mean for the consumer worried about the safety of funds paid to the funeral home or cemetery. Among the pecking order of … Continue Reading

Early Audit Warning: Fees and Assessments

Posted in Compliance, Exams/audits, Funeral, Preneed
It seems paradoxical to see preneed regulators ramping up audit programs while state budgets are being slashed to the bone. Yet, several I-70 corridor states will soon implement new preneed audit programs. Missouri’s preneed funeral audits will be funded out of a combination of license fees and preneed contract fees. Missouri’s new cemetery law did … Continue Reading

The Preneed Tax

Posted in Compliance, Preneed, Reform
Several states have passed laws in the past few years mandating greater preneed oversight. But with state budgets in decline after the 2008 market crash, regulators are hard pressed to find a way to pay for consumer protection. Colorado’s new law simply states that the contract seller shall bear the cost of its examination. In … Continue Reading

Missouri Cemetery Preneed Law: zero to eighty while blindfolded

Posted in Cemeteries, Legislation, Missouri - SB1, Preneed
The fear of SB1 drove the Missouri cemetery industry to push for Chapter 214 legislation in 2009, only to have the wheels come off at the stroke of midnight last May. While legislation was passed, the original bill was gutted, and the resulting changes were incoherent and confusing. It was no surprise that the industry … Continue Reading

Preneed Salesmen: How high a bar?

Posted in Funeral, Missouri - SB1, Preneed
 NPS salesmen had quite a reputation. Commission driven, some were reported to have earned a healthy six-figure salary. And, some had no prior experience in the funeral industry. To curb the excesses committed by NPS salesmen, Missouri preneed reform bill requires preneed salesmen to be licensed, with a condition that they “have successfully passed the … Continue Reading

Trust Funded Preneed and Finance Charges

Posted in Preneed, Preplanning
The funeral director’s decision about how to fund his preneed is influenced by the state’s trusting requirement, investment returns, administrative convenience and the volume of preneed business. Essentially, there are three methods of funding preneed: the depository account, the master trust and the insurance policy. The funeral director’s use of the depository account predates all … Continue Reading

Preneed Salesmen: calling the kettle black

Posted in Preneed
I learned the preneed business from an organization that used the term “preneed counselor”. Consumer advocates, and many funeral directors, rail at that characterization, and insist a salesman is a salesman, no matter what you call them. For purposes of debate, I would agree that all preneed counselors are salesmen. However, not all preneed salesmen … Continue Reading

NPS and an uncertain world

Posted in NPS/Lincoln, Preneed
Certainty? In this world nothing is certain but death and taxes. Benjamin Franklin The “collapse” of National Prearrangement Services comes as a shock to both the company’s clients and competitors. For the seventeen states in which NPS transacted business, regulators are scrambling to get their arms around the magnitude of the problem. NPS’ adversarial reputation will cause … Continue Reading

NPS throws in the towel

Posted in NPS/Lincoln, Preneed, Preplanning
NPS, beleaguered by state regulatory proceedings in Kentucky, Illinois, Ohio, Texas and Iowa, has called it quits.    NO MAS!    ENOUGH!    Much to the surprise of industry leaders, NPS has suggested it will do what’s in the best interests of the consumers.  Could this mean a refund to everyone?   April Fools Day!   … Continue Reading