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

In our last post, we used Allan Sloan’s article on the Treasury bond market to highlight the investment exposures to death care trusts.  Today we will look at how the Treasury market is also impacting funeral homes that rely upon insurance for preneed funding.  Mr. Sloan’s article alluded to insurance companies being required by statute

The July 25th Marketplace Morning Report on National Public Radio included a segment called Allan Sloan’s lessons on bond investments. Mr. Sloan is a business columnist for the Washington Post who recently wrote that the current Treasury bond market is “out of whack”, and poses a risker investment than the stock markets. Mr. Sloan

For an industry that has been dependent on interest income, the past 9 years have been tough on the death care industry.  Interest rates started to decline 9 years ago, with the bottom hitting in 2008.   Zero interest rates forced death care fiduciaries to diversify into equity investments, but trusts have experienced a sideways market

One strength of the state association master trust is that it can provide the ‘critical mass’ required for economies of scale to reduce trust management costs.  As the state master trust grows in size, the association can better negotiate asset management arrangements.  However, the reality has been very different for these programs.  The reorganization of

Prior to Missouri re-writing its preneed law in 2009, preneed sellers could draw off realized income so long as the withdrawal did not reduce the trust’s fair market value below trust deposits.   Seeking income, many Missouri sellers directed their trustees to invest in bonds.  As interest rates declined during the early part of the prior

According to court filings, the reorganization plans for the Wisconsin Master Trust and California Master Trust each seek to eliminate ‘de facto trustee’ relationships that allowed the respective associations’ executives to ‘misuse, misspend, and mismanage millions of dollars’ of trust funds, and to direct funds towards inappropriate and unsuitable investments that served the association’s, rather