Legislation was introduced this week in the Kansas Legislature, and one of the bill’s changes seeks to clarify how cemetery care fund requirements can be computed. We have found this a source of confusion for cemeteries and regulators in many states. Depending upon the type of interment right purchased, the care fund requirement is often a percentage of the purchase price. The confusion is whether the care fund amount is part of the purchase price, or in addition to the purchase price. Assuming a purchase price of $1,000.00 and Kansas’ 15% care fund percentage, the difference is $22.50. Multiple that amount by the number of sales between audits, and an audit report may conclude that a deficiency of thousands of dollars exists. Or, the cemetery has been over funding the care fund at the expense of operating profits.
The Kansas Cemetery Association is seeking to clarify that the care fund requirement can be determined in either fashion. Click here to view the legislation, or here to view the bill’s summary brief.
If a cemetery opts to set out care fund requirements as an amount that is in addition to the purchase price, their sales documents will need to be consistent with that approach.