It is common for a funeral home to offer a discount to a preneed contract purchaser when the sales price is to be paid in full at the time of purchase. However, funeral homes are often inconsistent in how the discount is applied to the preneed contract. We have seen the discount recorded as a
Preneed
Criminal Intent: Use of the Wrong Deposit Book
By Bill Stalter on
An Oklahoma funeral director faces serious prison time over the deposit of preneed funds to his business operating account. The Oklahoma Department of Insurance decided to go to a local prosecutor when a Department audit found the funeral director had routinely failed to deposit consumer funds to the preneed trust required by state law. The…
NPS Trustees: Standard of Care for Preneed Administration
By Bill Stalter on
Final arguments were heard in the NPS civil trial this past Friday. With the SDR having presented evidence through the prior Friday, the defendant trustees presented their case in less than a week. This may reflect that the NPS trustees had viewed their duties as having been defined by Chapter 436 as relatively low. As…
Finding Fault with Chapter 436: The NPS Civil Trial
By Bill Stalter on
The NPS civil trial has completed its third week, and jurors probably face another four weeks of witness testimony. First from the NPS receiver, and then from the defendant trustees, the jurors are hearing two very contrasting theories of what fiduciary duties were owed by the NPS trustees. Up until a few weeks before the…
Qualified Funeral Trusts: Illinois and Schedule M
By Bill Stalter on
Posted in Preneed Tax, Taxes
The Illinois Department of Revenue made a revision to Schedule M of the 2014 IL-1041 form that may go unnoticed by many trust tax preparers. The change is meant to clarify that preneed accounts established pursuant to the Illinois Funeral or Burial Funds Act may take an adjustment that will eliminate the preneed trust’s state…
Getting Personal: liability and the preneed trust officer
By Bill Stalter on
Earlier this week, the Federal Court that is to try the NPS civil lawsuit next month issued an order (Order denying Morisse JOP Mtn) that will raise red flags for the banks that serve as preneed trustees. In denying the motion of an officer of Allegiant Bank, Judge Richard Webber held that the…
Rising Interest Rates: A Return to the Good Ole Days?
By Bill Stalter on
For Fed watchers, last week’s announcement signaled a subtle warning that interest rates will likely begin rising by the Summer of 2015. Since September of 2012, Federal Reserve statements have warned that interest rates would remain unchanged for “a considerable time” after the nation’s economic recovery strengthened. The reference to “a considerable time” was dropped…
Preneed Trust: Is it the Consumer’s Funds?
By Bill Stalter on
Attorneys are currently arguing this issue before a Federal court in St. Louis. While the NPS civil trial does not begin for another six weeks, both the SDR and the defendant trustees want to resolve the question of who is a beneficiary of a preneed trust under Missouri law. The SDR is arguing that…
Preneed Shortfalls: Installment Payments
By Bill Stalter on
In prior posts, we discussed the impact that investment return and performance cost increases have on preneed shortfalls. In this post we will look at how installment payment options impact the funeral and cemetery operator.
Many funeral homes do not offer installment payment options because those monthly payments cut directly into the trust earnings that…
Preneed Shortfalls: Performance Cost Increases
By Bill Stalter on
Posted in Preneed Shortfalls, Price Protection
In our prior post we discussed two factors to preneed shortfalls: investment returns and the operator’s performance cost increases. The Funeral Consumer Alliance of Greater Kansas City conducts an annual survey of the region’s funeral homes to track the price increases on their General Price Lists. A couple days after our post, the Kansas City…