In our prior post, we looked at Paragraphs 39 through 52 of the Complaint filed against the Missouri Funeral Trust, and the implications of Missouri’s Common Trust Fund law. In this post we will look at paragraphs 79 through 95 of the State Board Complaint, and what exposures rollover funeral homes could have.
The Complaint asserts that the MFT has denied that it is the seller of some, or all, of the preneed contracts rolled over by funeral homes that they had sold prior to 2009. The Complaint alleges that the rollover funeral homes informed the State Board that they were relieved of the seller duties when MFT assumed the seller functions, but that neither the funeral homes nor MFT have provided the State Board any “rollover” agreement.
These sections of the Complaint suggest to us that the MFT may have entered into an administrative arrangement with funeral homes that had been their own seller under Missouri’s prior Chapter 436. We anticipate that MFT then became the funeral homes’ seller for preneed contracts sold subsequent to August 2009. MFT has asserted from time to time that seller responsibilities created under SB1 could not be applied retroactively to funeral homes that were never sellers under the new law. Accordingly, the Complaint seems to be taking issue with that position, and seeking to discipline MFT for misrepresenting the law’s requirements to funeral homes. If MFT were to be wrong about this issue, the State Board could bring disciplinary proceedings against each rollover funeral home for failing to obtain a seller’s license.