In 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
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The Missouri Funeral Trust and its Catch-22
By Bill Stalter on
A status hearing is scheduled for September 28th in the lawsuit filed by the Missouri Funeral Trust against the State Board of Embalmers and Funeral Directors and Catholic Fraternal Life. The lawsuit is now 4 months removed from the request for a temporary restraining order that, among other relief sought, would stay the financial…
The MFT Lawsuit Claims: The Client List
By Bill Stalter on
The lawsuit brought by the Missouri Funeral Trust against the Missouri State Board of Embalmers and Funeral Directors and CFL Pre-Need includes a number of unique and dubious claims. For example, the lawsuit defines CFL Pre-Need, an insurance company, as a competitor but not funeral home clients that are licensed as a preneed seller. The…
The High Cost of Litigation: Copy Charges
By Bill Stalter on
Posted in NPS/Lincoln
The 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…
Missouri Audits: What’s in store for round 2?
By Bill Stalter on
The Missouri State Board of Embalmers and Funeral Directors will meet August 4th and 5th to discuss legislation, regulation drafts and changes to the examination process. The State Board examiners are completing the first audit of each preneed seller, and the scope and procedures for the next round of preneed audits will be discussed. Use…
Preneed Trust Shortages: Investment Management Fees
By Bill Stalter on
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…
Preneed Trust Shortages: Deposit Plus Accounting
By Bill Stalter on
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…
The Missouri Agenda: a few clean up provisions
By Bill Stalter on
Posted in Missouri - SB1
The Missouri State Board of Embalmers and Funeral Directors will meet to July 21st to discuss “a short slate” of legislation and regulation proposals. While many of the proposals have been previously discussed, some, such as the preneed shortage funding requirement, are new. We also note regulation proposals regarding when forms and reports…
Preneed Trust Shortages: Missouri’s Income Withdrawals
By Bill Stalter on
Posted in Exams/audits, Investments, Legislation, Master Trusts, Missouri - SB1, Recordkeeping, Reporting, Trust Funded
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…
Missouri and Preneed Deficiencies: What is a shortage?
By Bill Stalter on
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…