With legislation introduced this past January, Illinois could join those states which expressly authorize cemetery fiduciaries to take the unitrust election and make fixed distributions to cemeteries. Senate Bill No. 3207 proposes to amend Illinois’ Cemetery Care Act to add provisions which would define ‘total return distribution’ and thereby allow care fund trusts to make
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“Excluded” Cemeteries and Care Fund Distribution Options: Find Your Applicable State Laws
In our prior post, we recommended that the Evergreen Cemetery Association explore the Minnesota trust code provisions regarding the trustee’s power to adjust (501C.1112). This is something other “excluded” cemeteries should also consider. By excluded, we mean cemeteries owned by associations, churches, cities or counties that are typically excluded from regulation of…
Missouri HB 1062: A Super Trust for the NPS Recovery
It has been almost 2 years to the date when a $391 million dollar judgment was entered against PNC Bank, as the successor to Allegiant Bank. Allegiant Bank was one of the last trustees to administer National Prearranged Services’ preneed trusts in Missouri. PNC Bank appealed that judgment, and a decision is expected any day…
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…
Missouri and Preneed Deficiencies: What is a shortage?
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…
Consumers Payment Options: Administrative Hurdles and Preneed Trusts
There are three scenarios for administration of preneed installment payments: the funeral operator collects payments, the trustee collects payments or a third party administrator collects payments. The entity collecting installment payments must be able to apply each payment to the correct preneed account, and provide the other party (or parties) current payment balances. If the…
Plaintiff’s Star Witness: Doug Cassity
The NPS civil trial is scheduled for trial in February 2015, and the SDR’s strategy took a twist when her litigation team filed a motion to dismiss Doug Cassity as a defendant in the lawsuit. The dismissal probably signals the SDR’s intent to use Mr. Cassity’s testimony. Now convinced that Mr. Cassity does not have…
The Fed’s Tapering Plan: A Bumpy Road for Death Care Trusts?
It 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…
The Medicare Tax and QFTs: Don’t look a gift horse in the mouth
Over the past few years, preneed trust administrators have been wondering whether a Section 685 qualified funeral trust could look to each individual trust’s income and apply the lower tax rates for long term capital gains and qualified dividends. The issue has taken on more relevance as preneed trusts look to diversify out of …
Individual Funeral Trusts: Are the costs too high?
The 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…