On August 30, 2021, the legal saga of National Prearranged Services came to a rather anticlimactic conclusion. In a relatively short decision, the Eighth Circuit Court of Appeals affirmed Judge Richard Webber’s July 2019 judgment that awarded $102,135,393.07 damages against PNC Bank, a successor to the NPS preneed trusts. The final damages award is a
Compliance
Missouri Funeral Home Inspections and Pictures: You Were Warned!
By Bill Stalter on
Posted in Compliance, Funeral
A festering dispute between Missouri’s State Funeral Board and funeral directors association came to a head in a public conference call today. The State Board scheduled the meeting in response to its parent agency (the Division of Professional Registration) blocking the Board’s hiring of an investigator. The Board held the meeting to discuss what actions…
Missouri Seller Renewal Reports: When a Contract is not a Contract
By Bill Stalter on
Prior to October 31st each year, Missouri preneed sellers must file a renewal/annual report that sets out each preneed contract issued or sold during the reporting period (September 1st through August 31st). We recently had funeral home clients express confusion over when an arrangement with a family constitutes a preneed contract. …
Missouri Endowed Care Audits: Veering off the Legislature’s Intent
By Bill Stalter on
In our third post on Missouri’s endowed care cemetery audits we look at the request for the cemetery’s legal documents. The current audit notice requests copies of the cemetery’s trust agreement, rules and regulations, contract forms, deed forms, brochures and any other materials making an endowed care representation. In essence, the audit is going to…
Missouri Care Fund Audits: Following the Money
By Bill Stalter on
Posted in Cemeteries, Exams/audits
Our previous post discussed care fund audits and the tracking of a cemetery’s property sales and care fund liability. The next step of the audit process is following the money to the care fund trust (and the back from the trust to the cemetery). For these purposes, the Missouri audit notice requests trust statements from…
Missouri Care Fund Audits: Tracking IR Sales and Trust Deposits
By Bill Stalter on
Missouri is catching up on its auditing of licensed endowed care funds. Within the past couple of months, most of our Missouri endowed cemeteries received the attached notice requesting reports and documents for audit. In prior posts, we have suggested that the Office of Endowed Care Cemeteries (OECC) audit process should be revised. Our next…
NPS’ Trustee and Income Distributions: Who needs Income?
By Bill Stalter on
We had hoped that the Trial Court’s Finding of Facts would shed some light on how a Missouri preneed trust holding life insurance would have income to distribute. Despite being invested primarily in life insurance policies, Allegiant Bank made monthly income distributions to NPS. The Trial Court made several findings on how Allegiant Bank failed…
NPS’ Trial Court: Trustees and Individual Deposit Records
By Bill Stalter on
“Allegiant [Bank] violated the industry standard of care by not maintaining consumer-level deposit records, because, as here, where there are multiple beneficiaries of a trust, the trustee must keep records of the individual deposits made for each consumer.”
This finding by the trial court in the NPS civil trial had to come as a shock…
Allegiant Bank and NPS: Know Your Client
By Bill Stalter on
Posted in Compliance, NPS/Lincoln
PNC Bank has been hit with $15 million of punitive damages because Allegiant Bank did not know its client.
Before opening a fiduciary account, banks are required to perform due diligence on the trust’s grantor and on the trust’s purposes. Such due diligence is referred to as ‘know your client’ or “KYC”. KYC requirements had…
National Prearranged Services: A Serious Lack of Fiduciary Oversight
By Bill Stalter on
National Prearranged Services is back in the news after a trial court issued a new $102 million judgment against PNC Bank (the corporate successor of Allegiant Bank). Allegiant Bank served as NPS’ Missouri preneed trustee for six years beginning in 1998. When PNC Bank agreed to purchase Allegiant in 2004, PNC performed due diligence that…