Typically, the standard by which a cemetery is judged to be abandoned is whether the grass is getting cut. But for licensed cemeteries, some states’ laws may also include provisions to deem a cemetery abandoned when regulatory reports are not filed. Care fund reports are intended to inform the cemetery regulator whether the operator is
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Principal Distributions: They are not always what they seem
By Bill Stalter on
Posted in Care Funds, Cemeteries
A cemetery operator recently expressed his frustration with the trust officer of his care fund trust. An examination of the trust had cited the operator for inappropriate distributions from principal with regard to expense payments. We suggested to the operator that it is very common for trustees to set up care fund accounts with …
The “Problem” Cemetery: The Difference a Trustee Makes
By Bill Stalter on
Posted in Cemeteries
As cemeteries struggle with harsh economic conditions, regulators are bound to look at their ‘problem cemeteries’ and weigh whether legal proceedings are necessary to preserve the care funds mandated by state law. To the extent such proceedings are premised in part on how capital gains are defined and whether distributions from capital gains are an…
Obama’s Plan to Tax the Rich: death care trusts
By Bill Stalter on
They say that the devil is in the details, and that is proving true for the Obama definition of the “rich” (those families that earn more than $250,000) and the plan to fix the budget. The IRS provided some detail to the Obama plan last December when it published a proposed regulation that would increase…
Checks and Balances: Who has your back?
By Bill Stalter on
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…
Perpetual Care and Capital Gains: the government’s rainy day fund?
By Bill Stalter on
For the past few years, some Kansas cemeteries have been getting nasty grams from their regulator about their care fund trustee’s treatment capital gains taxes. Kansas, like most states, requires a portion of each grave space sale (interment right) to be contributed to a fund or trust for the future care of the cemetery. Kansas…
Missouri Cemetery Reform: New Year’s Resolutions
By Bill Stalter on
In a move to remain autonomous from the funeral industry and its oversight, the Missouri cemetery industry met with its regulator during the summer of 2008 to discuss reform legislation. Disagreements precluded effective legislation from being passed in 2009, but extensive changes was passed in 2010, and became effective on August 28, 2010. Now, the Missouri…
Annual Investment Reviews: the need to diversify
By Bill Stalter on
The ICCFA’s November Magazine included an article by Craig Martin that provides good advice for all death care trusts. Death care trusts are notoriously bad performers, and if operators are to improve investment performance they need to work more closely with their fiduciaries and portfolio managers. Mr. Martin offers 5 tips that are equally applicable…
Cemetery Endowed Care Funds and the Fixed Income Investment
By Bill Stalter on
Posted in Cemeteries, Legislation
The Federal Reserve’s December 17th decision to cut its interest rate to less than a quarter of a percent is meant to encourage investors back into the stock market. But for many cemeteries, the prospect of depressed interest rates will have dire consequences to endowed/perpetual care trusts that are subject to state laws which limit…
The long, winding road to reform: Michigan
By Bill Stalter on
Even when the need for reform is apparent to all, the legislative process can take years. With the Michigan Senate having approved a House substitute, that state’s cemeteries are a step closer to reform that could have avoided Clayton Smart’s pillaging of $70 million dollars of endowed care funds.