Compliance

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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…

At its June meeting, the Missouri State Board of Embalmers and Funeral Directors gave instructions to their staff to draft legislation that would provide the Board powers to force preneed sellers to contribute funds to their trusts to cover ‘shortages’.   The instruction was not without some controversy as one Board member questioned why he was…

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…

With increasing regularity, preneed consumers are downgrading from traditional funerals to cremation services.  To accommodate the consumer, funeral homes often amend the original contract with a downgrade addendum.   An addendum is used to avoid a contract cancellation and a new contract where additional state fees might be required.    However, downgrade addendum can pose certain problems.…

Funeral homes frequently allow the assignment of insurance as partial payment towards a trust funded preneed contract, but the manner in which the assignment is made can cause problems for them.  Preneed trustees will not accept an insurance policy for a host of reasons.  Insurance proceeds paid to a trust are not tax free and…

When NPS first collapsed, the estimate of the company’s liabilities to funeral homes was reported to have been as much as a billion dollars.  When the SDR finally brought the case to trial, the damages awarded by the jury were less than half of the original estimate.   While this author believes the actual damages are…

Final arguments were heard in the NPS civil trial this past Friday.  With the SDR having presented evidence through the prior Friday, the defendant trustees presented their case in less than a week.  This may reflect that the NPS trustees had viewed their duties as having been defined by Chapter 436 as relatively low.  As…