For an industry that has been dependent on interest income, the past 9 years have been tough on the death care industry. Interest rates started to decline 9 years ago, with the bottom hitting in 2008. Zero interest rates forced death care fiduciaries to diversify into equity investments, but trusts have experienced a sideways market
Missouri Preneed Tax Cut: The Contract Fee
Using its emergency rulemaking authority, the Missouri State Board of Embalmers and Funeral Directors reduced the state preneed contract fee from $36 to $25. The change is to go in effect on September 1, 2015, the first day of the next reporting period.
The High Cost of Litigation: Copy Charges
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
Trust Shortages: Sponsorship Fees
It was been almost 7 years since we posted the piece titled “Trade Association Membership: weighing the costs vs. the benefits”. Towards the end of that article, we discuss how the master trust sponsor fee provides a crucial source of revenue to state associations. That post was written subsequent to the dissolution of
Missouri Audits: What’s in store for round 2?
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: Deposit Plus Accounting
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
Preneed Trust Shortages: Missouri’s Income Withdrawals
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
Association Master Trusts: De Facto Trustees
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
Transparency:The Curious Case of the Missouri Funeral Trust
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
Preneed Downgrades: Refunds
With increasing regularity, preneed consumers are downgrading from traditional funerals to cremation services. To accommodate the consumer, funeral homes often amend the original contract with a downgrade addendum. An addendum is used to avoid a contract cancellation and a new contract where additional state fees might be required. However, downgrade addendum can pose certain problems.