Death Care Compliance Law

Death Care Compliance Law

Preneed: A Pandora's Box of Problems

William Stalter is the founder of Stalter Legal Services and the Preneed Resource Company. Bill focuses his law practice on preneed and death care compliance, serving banks, funeral homes, crematories, and cemeteries. He has written multiple published articles

Tag Archives: Master Trusts

Missouri’s Record Keeping Meeting(s): A Date to Be Determined

Posted in Associations, Exams/audits, Master Trusts, Missouri - SB1, Recordkeeping
In preceding posts, we have outlined recommendations to the Missouri State Board of Embalmers and Funeral Directors regarding the preneed examination process and record keeping requirements.  While our correspondence was not included on the Board’s December 13th agenda, the Board entertained a motion to amend the agenda to include our correspondence on the afternoon open… Continue Reading

The MFT Complaint: Assumption of Duties of a Prior Seller

Posted in Exams/audits, Missouri - SB1, Recordkeeping
In Paragraphs 35 through 38 of the Complaint filed against the Missouri Funeral Trust, the State Board of Embalmers and Funeral Directors seek discipline against MFT for its inability to produce copies of contracts sold by a funeral home that transferred its trust to MFT.  The original seller funeral home apparently amended several of its… Continue Reading

Missouri’s Funeral Consumer Board: Another Step Closer

Posted in Exams/audits, Missouri - SB1, Uncategorized
With the support of the Missouri Funeral Directors and Embalmers Association, The Funeral Consumer Board Bill (HB 596) was voted out of committee last week with a crucial amendment.  As reported in our January 19th post, Rep. McGaugh wants a preneed regulator that is more responsive to the consumer.  The Representative’s constituents lost hundreds of… Continue Reading

Preneed Trusts and Value Allocations: Total Return vs Income Return

Posted in Administration, Compliance, Investments, Total Return Trust
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 cost accounting… Continue Reading

The Missouri Fund Manager: What was Grandfathered?

Posted in Associations, Master Trusts, Missouri - SB1
There seems to be some confusion in Missouri over the permissible contractual relationships among the preneed seller, the preneed trustee and the independent investment advisor. Prior to the collapse of NPS, and the subsequent amendment of Missouri’s preneed law, Chapter 436 allowed the preneed seller to incorporate provisions in its preneed trust agreement to instruct… Continue Reading

The Missouri Funeral Trust Lawsuit: Is Investment Performance a Trade Secret?

Posted in Master Trusts, Missouri - SB1
The MFT did not catch a break with the court assigned to its lawsuit against the Missouri State Board of Embalmers and Funeral Directors and Catholic Fraternal Life.   The hearing scheduled for September 28th was continued for another four weeks, and in the meantime, the parties continue to file evidentiary discovery requests.  The Association’s preneed… Continue Reading

Preneed Trust Shortages: Investment Management Fees

Posted in Associations, Compliance, Investments, Master Trusts, Missouri - SB1
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… Continue Reading

Preneed Trust Shortages: Deposit Plus Accounting

Posted in Administration, Compliance, Legislation, Missouri - SB1
During its state convention, the executive director for the Missouri Funeral Director and Embalmers Association stated that their master trust program would have a $3 million dollar surplus if all preneed contract beneficiaries were to die that day.  If the Missouri program were being administered pursuant to common trust fund rules, there should not be… Continue Reading

Association Master Trusts: De Facto Trustees

Posted in Compliance, Exams/audits, Fiduciary, Investments, Master Trusts
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… Continue Reading

Transparency:The Curious Case of the Missouri Funeral Trust

Posted in Master Trusts
In his final report to the court, the Wisconsin Master Trust receiver proposed a new trust agreement that is intended to provide “transparency, accountability, oversight and prudence”.   Similarly, the California Attorney General seeks to provide transparency through express reporting requirements included in the trust agreement proposed to the court presiding over the California Master Trust. … Continue Reading

Investment Advisors: How Independent?

Posted in Compliance, Investments, Master Trusts, NPS/Lincoln
In a motion for rulings of law, the NPS Special Deputy Receiver seeks a judicial determination of two legal issues that could impact preneed trustees subject to the jurisdiction of the Eighth Circuit of Federal Court of Appeals: the beneficiary status of preneed purchasers (and funeral homes) and the required independence of investment advisors.  These two… Continue Reading

The Wisconsin Master Trust: Between a Rock and a Hard Place

Posted in Funeral, Master Trusts, Preneed
In a motion to convert the Wisconsin Master Trust from a preneed trust to a liquidating trust, the Receiver outlined to the court why the trust cannot keep its promises to consumers and comply with Wisconsin’s preneed law. Section 445.125 restricts preneed funeral trusts to depository accounts, and CD returns won’t even pay the Master… Continue Reading

The Bernanke Factor: The New Volatility for Death Care Trusts

Posted in Investments, Master Trusts, Preneed
A Missouri preneed auditor recently requested an explanation from a client why certain accounts were underfunded.  The handful of accounts were “underfunded” by varying amounts of a few dollars to twenty dollars.  The common fact with each was an initial deposit or substantial deposit in the month preceding the Federal Chairman’s remarks that sent the… Continue Reading

The NPS Criminal Trial: Vicarious Liability?

Posted in Fiduciary, Investments, Master Trusts, NPS/Lincoln, Preneed
David Wulf may stand alone in the crosshairs of the criminal prosecutors, but his fate will impact the NPS preneed trustees (and possibly other registered investment advisors who manage death care funds). Mr. Wulf had a situation that is unique from what existed in Illinois, Wisconsin, and Tennessee, but is familiar to other death care… Continue Reading

Wisconsin: Breaking the Settlement Logjam

Posted in Funeral, Master Trusts, Preneed
In prior posts we have documented certain similarities between the old IFDA master trust and the Wisconsin master trust, and our Illinois clients have expressed sympathy for their colleagues to the north. But, key differences exist between the two master trusts, and the recent settlement agreement offered to Wisconsin funeral homes is an indication that… Continue Reading

Master Trusts: Finding the Rails

Posted in Fiduciary, Guaranteed, IFDA, Master Trusts, Missouri - SB1, Non-guaranteed, Preneed, Trust Funded
Both the Memorial Business Journal and the Funeral Service Insider commented last week on the Milwaukee Journal Sentinel’s February 7th article regarding the former executive director of the Wisconsin Funeral Directors Association. Several issues were raised that should be included in future industry debate, and in particular, I would agree with Mr. Isard’s questions whether… Continue Reading

A False Sense of Security: the hold harmless for investment oversight

Posted in Funeral, Master Trusts, Preneed
We previously discussed how the funeral home or cemetery assumes most of a preneed trust’s investment risk when selling a guaranteed preneed contract, and therefore should be afforded a role in the trust’s investment decisions (Fund Managers: Is Your O&E Coverage Current?). But in that same post, we were careful to point out that there… Continue Reading

A Peace Offering: Fiducary Partners and the WFDA Receiver

Posted in Fiduciary, IFDA, Master Trusts
Fiduciary Partners, the corporate fiduciary for the Wisconsin and Illinois master trusts, broke its silence this week with a statement to the Funeral Service Insider. The statement was made in response to criticisms previously reported by FSI, and reflects the receiver and fiduciary working together to get their “message” out and avoid the kind of… Continue Reading