Missouri’s preneed funeral law imposes time requirements on funeral homes that accept consumer funds. For funeral homes using depository accounts to fund preneed contracts, the funeral home must deposit consumer funds with the bank within 10 days. Funeral homes using insurance to fund preneed contracts must remit the consumers funds to the insurance company within 30 days. And for those funeral homes using trusts to fund their preneed contracts, they must deposit the funds to trust within 60 days of receipt. Missouri’s first round of preneed exams did not look at this issue, but the next round apparently will. Recent audit notices are seeking receipt and deposit records that confirm these time requirements are being met. But many funeral homes have not maintained such records. Consequently, the record keeping regulation proposed by the State Board staff would seek receipt and deposit journals. (See our prior post: Missouri Preneed Seller Records: Receipt Journal)
Though it is not common, some Missouri funeral homes use more than one type of preneed funding. Most funeral homes use one source of preneed funding, but many of those funeral homes will give the consumer the option of making payments to the funeral home or the funding source (an insurance company or trustee). When the consumer makes payments directly to the trustee or the insurance company, the seller will be dependent upon the funding agent to provide a record of the payments received. But when the funeral home handles consumer payments, the funeral home will need to create a record of what was received, and then what was deposited either to the clearing account or the funding agent. When the clearing account is used, the funeral home will also have to maintain a record of the transfer from the clearing account to the insurance company or trustee. That record will need to be sufficient to show each consumer payment included in the transfer.