Compliance

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The Office of the Comptroller of the Currency (the OCC) supervises the fiduciary activities of national chartered banks, and in February, updated the guidelines used by its examiners.  The “Personal Fiduciary Activities” booklet includes a section on pre-acceptance due diligence that fiduciaries should conduct before agreeing to serve as trustee for an account.  …

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.   …

It is common for master preneed trusts to have investments directed by an independent fund manager.  The pooling of smaller trusts allows funeral directors to achieve the critical mass needed to engage professional asset management.  When investment functions are delegated, the trustee typically wants to be relieved of the supervision and liabilities that accompany those…

For Fed watchers, last week’s announcement signaled a subtle warning that interest rates will likely begin rising by the Summer of 2015.  Since September of 2012, Federal Reserve statements have warned that interest rates would remain unchanged for “a considerable time” after the nation’s economic recovery strengthened.  The reference to “a considerable time” was dropped…

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…