A recent order issued by the Federal Court trying the NPS civil suit referenced a mirror trust employed by the defendant bank (12-31-14 Order – Comerica MSJ ).  To facilitate the trading of investment securities, a brokerage account is established with a firm that can administer the transactions more efficiently than the fiduciary institution.   

There are three scenarios for administration of preneed installment payments: the funeral operator collects payments, the trustee collects payments or a third party administrator collects payments.  The entity collecting installment payments must be able to apply each payment to the correct preneed account, and provide the other party (or parties) current payment balances.  If the

The conventional guaranteed preneed transaction is premised upon investment returns offsetting performance cost increases to the funeral home.  Many funeral homes restrict consumers to single payment preneed contracts to limit their exposure to funding short falls.  If the funeral home allows the consumer to pay the preneed purchase price over 60 months, the preneed trust

A few weeks ago, we discussed the need to offer to consumers new preneed funding options, and outlined the various administrative hurdles faced by funeral homes that rely upon trust funding. (Preneed Trust Options: Administrative Limitations) With this post, we will examine how the non-guaranteed option impacts tax allocations and makes spreadsheet administration

 Over the past few years, preneed trust administrators have been wondering whether a Section 685 qualified funeral trust could look to each individual trust’s income and apply the lower tax rates for long term capital gains and qualified dividends.  The issue has taken on more relevance as preneed trusts look to diversify out of

In the days that followed the Wisconsin Funeral Directors Association being placed into receivership, some of the WFDA’s sister associations were quick to point out they had ‘checks and balances’ that would protect consumers’ funds from the problems that tripped up the Wisconsin Funeral Trust. As we reported in our last post, a crucial ‘check

A short three and a half years ago, the funeral industry reeled from the collapse of National Prearranged Services and the emerging story of the Illinois Master Trust. The NFDA was slow to respond to the crisis, and when it did, this blog joined the criticism. Fast forward to September 2012, and the NFDA responds

For obvious reasons, life insurance is the preneed funding choice for many funeral directors. One hundred percent trusting laws give proactive preneed organizations no choice but to use insurance funding. Insurance provides the commissions needed to finance marketing and a sales force, and, maybe as important, relieves the funeral home from preneed accounting and administration.

A breakdown in communications between the CFDA and the Cemetery and Funeral Bureau has resulted in the California Attorney General filing a lawsuit that can be appropriately described as vitriolic. The “California lawsuit” could provide some valuable ‘what to avoid” lessons for regulators in other states.

In an unusual move, the Bureau went