The newest edition of the Missouri Preneed Exam Handbook has some significant problems. The one we will discuss today is ambiguous instructions regarding the review of preneed contracts. Paragraph 13 of the Handbook’s scope of financial examination states: 13) Staff shall look at 100% of all active preneed contracts that have been sold since the period… Continue Reading
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New York Times: Can I Pre-Pay without working with a funeral home?
Posted in Final Expense Trust, Preneed, PreplanningThe New York Times article on funeral planning blurs the line between pre-paying and pre-funding. The savings accounts discussed by the article are one method of pre-funding funeral costs. But the POD savings account is far less secure than final expense trusts or final expense insurance policies. The concern many consumers have is that the… Continue Reading
A Call for Comments: Missouri’s Preneed Exam Handbook
Posted in Exams/audits, Missouri - SB1To begin reform of its preneed exam process, the Missouri State Board of Embalmers and Funeral Directors is seeking input from the industry by this Friday, June 8th. Specifically, the State Board is requesting comments to the Exam Procedures Handbook prepared by its staff. We have made edits to that handbook, and will provide more… Continue Reading
Death Care Trade Associations: Will New Blood Be Enough?
Posted in AssociationsWith the Dead Beat’s permission, we are sharing at a column they ran earlier this summer. An anonymous contributor suggested that Death Care associations are headed for obsolescence. The author noted that attendance at Midwest conventions have dropped dramatically, and attributed this in part to a failure to adapt meetings and conventions to the needs… Continue Reading
Preneed Shortfalls: Extended Installment Options
Posted in Preneed Shortfalls, Price ProtectionFor consumers who need installments to pay for their preneed arrangement, funeral directors report that the $100 monthly payment is the comfort threshold for most individuals. For a widow planning her own funeral, the $100 monthly payment will require an installment term of six years or longer. If the widow needs to also cover an… Continue Reading
Estate Planning and Funeral Arrangements: A Will will be too Late
Posted in Preplanning, Right of Sepulcher, Transition DocumentsFuneral and burial preplanning should be a part of every estate plan, but some web pages promoting estate planning can be misleading or impractical. The estate planning page sponsored by Lawyers.com suggests that funeral arrangement preferences can be incorporated into a will or health care power of attorney to alleviate the financial and emotional burdens… Continue Reading
NPR’s Stories on the Funeral Industry: On Line Shopping
Posted in Churches/Ritual, Consumer Advocates, PreplanningNPR’s second story on the funeral industry suggests that preplanning a funeral will typically require visits to multiple funeral homes. NPR led their story with a consumer attorney sharing his frustrations with getting price information from funeral homes near his father. To the attorney’s surprise, many of the funeral homes did not include general price… Continue Reading
The Ecclesiastical Preneed Funeral Plan: Exceptional Financial Security
Posted in Churches/RitualThe promotional website for the Ecclesiastical Preneed Funeral Plan could easily be mistaken for that of a funeral home. This church stresses to parishioners the need to not only plan their funeral, but to also make financial provisions for their eventual funeral expense. The website points out that funeral costs are rising, and funding a… Continue Reading
Church and Funeral Directors in Partnership
Posted in Churches/RitualWe came across the Dioceses of Liverpool website some time ago when researching the income tax consequences of church sponsored preneed programs. We had found that preneed funeral programs in England, Canada and Australia were often established and operated independent of the funeral home. With a high cremation rate, English churches saw an opportunity to… Continue Reading
Churches: Conversation Sabbath
Posted in Churches/Ritual, Transition Documents, UncategorizedChurches from different denominations are observing “Conservation Sabbath” from November 11th through the 20th. In 2010, a faith-related initiative titled the “The Conversation Project” was initiated by journalist Ellen Goodman. The Conversation Project is dedicated to helping people talk about their wishes for end-of-life care. Their website states: “Too many people are dying in a… Continue Reading
Missouri Seller Record Keeping: A Misstep Right out of the Box
Posted in Compliance, Exams/audits, Missouri - SB1, RecordkeepingThe purpose for a record keeping rule is to inform licensees what reports and documents that they must either maintain, or create, to enable the preneed examiner to determine compliance with state law requirements. But, the opening paragraph of the proposal given the Missouri State Board puts the cart in front of the horse: A… Continue Reading
A Treasury Market Out of Whack: Insurers and Preneed Consumers
Posted in Consumer Advocates, Insurance Funded, Preneed, Preneed Development, Preneed Shortfalls, Price ProtectionIn a prior post, we used Allan Sloan’s article on the Treasury bond market to discuss the impact on preneed insurers and their funeral home clients. The Treasury market has forced preneed insurers to lower their policy returns, which has a direct impact on the profitability of funeral homes. To make insurance funding more profitable… Continue Reading
Chasing Preneed’s Bad Apples
Posted in Associations, Exams/auditsIn September of last year, the Columbus Dispatch published a story critical of the Ohio State Board of Funeral Directors and Embalmers. Examining the Board’s efforts to address preneed fraud, the story reported that prosecutions of funeral directors were more the result of consumer complaints than Board inspections. That must have struck a nerve with… Continue Reading
The High Cost of Litigation: Copy Charges
Posted in NPS/LincolnThe Special Deputy Receiver for National Prearranged Services recently filed a Bill of Costs with the Federal trial court. The Bill of Costs seeks to recover copy charges of more than $500,000 from a former NPS trustee. Those costs do not include attorneys’ fees. Litigation can be very costly. Missouri’s preneed regulators are keenly aware of the costs of… Continue Reading
Preneed Trust Shortages: Missouri’s Income Withdrawals
Posted in Exams/audits, Investments, Legislation, Master Trusts, Missouri - SB1, Recordkeeping, Reporting, Trust FundedPrior 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… Continue Reading
Preneed Trust Options: Administrative Limitations
Posted in UncategorizedThe Memorial Business Journal’s July 10th story on the NFDA 2014 consumer survey included a commentator’s suggestion that preneed funding has declined because so few options are offered the consumer. The story’s commentators interpreted the decline in preneed funding as reflecting fewer consumers being motivated by price guarantees, and those that might be, need installment… Continue Reading
Talk of a Lifetime: Restarting the Prearrangment Process
Posted in Non-guaranteed, Preneed, Preplanning, UncategorizedOne message that can be taken from the FAMIC’s Talk of a Lifetime campaign is that funeral directors need to re-think their prearrangement procedures. Perhaps too much emphasis has been given to preneed, and not enough to the planning process. Prearrangement marketing and procedures have often been crafted by the funeral home’s preneed funding agent. … Continue Reading
The Fed’s Tapering Plan: A Bumpy Road for Death Care Trusts?
Posted in Compliance, Investments, Master Trusts, UncategorizedIt has been almost ten years since the return on Government bonds fell below 5%. But bond returns did not hit bottom until four years later when the sub-prime mortgage market collapsed. Those conditions threatened the nation’s credit markets, and so, in 2008, the Federal Reserve Board initiated a stimulus program involving the purchase of… Continue Reading
Form 1041QFT: Reducing Tax Liabilities
Posted in UncategorizedTax day is only a week away, and preneed trust returns will look a little different this year. As we reported back in December, the IRS took the position that preneed trusts are subject to the Medicare Tax used to fund the Affordable Health Care Act. Accordingly, Federal Form 1041QFT now requires the reporting of “Net… Continue Reading
MyRA: Is preneed headed in a similar direction?
Posted in Funeral, Preneed, Preneed Development, PreplanningPresident Obama used his State of the Union address to unveil a new type of retirement account dubbed “MyRA”. Recognizing that Americans are woefully unprepared for their retirement years, the President believes the MyRA offers individuals a safe option to induce them to begin saving for those golden years. A CNBC report provides an explanation… Continue Reading
Missouri and the Investment Advisor: A Chinese Wall
Posted in Fiduciary, Funeral, Investments, Missouri - SB1, PreneedAmong the rule proposals suggested by the Division of Professional Registration to the State Board of Embalmers and Funeral Directors was the following definition of “External Investment Advisor”: any licensed, qualified investment advisor approved and authorized by the trustee of the preneed trust and who holds no personal interest in any assets of the preneed… Continue Reading
Transferee Liability: Hidden Obligations
Posted in Missouri - SB1The Dead Beat recently published a letter from a Missouri funeral home operator that was critical of the ‘handling of the NPS debacle’ by the Missouri State Board of Embalmers and Funeral Directors. The operator questioned how the Board could ‘allow’ his firm to sign official documents requiring that NPS contracts be honored. The official… Continue Reading
Accepting Final Expense Policies: More Than an Accommodation
Posted in Funeral, PreplanningMany funeral homes have an informal practice of accepting small insurance policies from individuals who want to know their funeral expense will be taken care of at the time of death. Often, the individual may not be comfortable discussing their funeral preferences with family, and trust the funeral director to apply the insurance proceeds appropriately.… Continue Reading
Individual Funeral Trusts: Are the costs too high?
Posted in Consumer Advocates, PreneedThe Missouri law governing means testing for public assistance (RSMo. Section 214.010) was amended this past August to allow an individual to set up an ‘irrevocable funeral trust account’ and exclude $9,999 of funds for funeral and burial expenses. This legislation was sought by a funeral director that wanted to offer families an alternative to regulated… Continue Reading