We are continuing with our posts to correct the misstatements made by the MFDEA in its May 24th video on Missouri law and preneed portability. At minute 28:50 of the video, the association’s general counsel states that with regard to the transfer of preneed contracts, a successor seller must execute a State Board affidavit
Administration
Portability and Missouri Preneed Law: Seller Expenses
By Bill Stalter on
A few weeks ago the Missouri Embalmers and Funeral Directors Association posted a YouTube video explaining their take on preneed portability under Missouri law. The MFDEA frequently posts videos in response to industry queries, and for the association to spend 37 minutes on portability suggests that it is fielding numerous requests from MFT providers. The…
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…
Missouri Seller Records: 2017 Reboot?
By Bill Stalter on
This time last year, the hot topic before the Missouri State Board of Embalmers and Funeral Directors was the staff’s proposed regulation to define what constitutes adequate records of a preneed seller. The proposal was revised more than once during 2016, but it was eventually tabled by the Board before any consensus could be reached. …
The MFT Complaint: Rollovers and Sellers
By Bill Stalter on
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…
The MFT Complaint: Rollovers and Common Trust Funds
By Bill Stalter on
In paragraphs 39 through 52, and paragraphs 79 through 95, of the Complaint filed against the Missouri Funeral Trust, the State Board of Embalmers and Funeral Directors raises issues with regard to the preneed trusts that were transferred by funeral homes to MFT. The re-write of Missouri’s preneed law in 2009 provided the MFT an…
Preneed Trusts and Value Allocations: Total Return vs Income Return
By Bill Stalter on
As discussed in our prior post, funeral homes are becoming increasingly dependent upon their preneed trustee for individual account administration. Many trustees that provide account administration rely upon programs that use tax cost basis accounting. (For a prior discussion of tax cost basis see “Consumer Options and Administrative Hurdles: Market Value Allocations”.) Tax…
Preneed Trust Income: What Accounting Rules?
By Bill Stalter on
A Missouri funeral home client recently had a consumer with a trust funded contract cancel their prearranged funeral and request a refund. The contract was sold subsequent to the 2009 law change, which provides the consumer a refund equal to all payments in excess of a 5% origination fee. Missouri law allows sellers to withdraw…
New Missouri Preneed Recordkeeping Requirements: base records and uniformity
By Bill Stalter on
The Missouri State Board of Embalmers and Funeral Directors will meet December 9th, and their agenda includes a proposed regulation for new preneed recordkeeping requirements. Borrowing perhaps from other states’ preneed audit manuals, the regulation sets out a list of journals, ledgers, documents that a preneed seller would be required to maintain. For an…
Preneed Trust Shortages: Deposit Plus Accounting
By Bill Stalter on
During its state convention, the executive director for the Missouri Funeral Director and Embalmers Association stated that their master trust program would have a $3 million dollar surplus if all preneed contract beneficiaries were to die that day. If the Missouri program were being administered pursuant to common trust fund rules, there should not be…