Death Care Compliance Law

Preneed: A Pandora's Box of Problems

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Grantor Care Funds: Too Small to Pay for Flowers

By Bill Stalter on September 17, 2019

It would be my assumption that the majority of the country’s cemeteries do not maintain a trust for the maintenance and care of its graves. While this may differ from state to state, most states’ perpetual care statutes exempt small family cemeteries, not for profit cemeteries, municipal cemeteries, county cemeteries and church cemeteries from their care trust requirement. Consequently, there may be tens of thousands of cemeteries that will be dependent upon volunteers to mow…

Death Care Compliance Law

NPS’ Trustee and Income Distributions: Who needs Income?

By Bill Stalter on August 28, 2019

We had hoped that the Trial Court’s Finding of Facts would shed some light on how a Missouri preneed trust holding life insurance would have income to distribute. Despite being invested primarily in life insurance policies, Allegiant Bank made monthly income distributions to NPS. The Trial Court made several findings on how Allegiant Bank failed to comply with R.S.Mo. Section 436.031.3, but there is no mention whether Allegiant Bank complied with the realized income requirement.…

Death Care Compliance Law

NPS’ Trial Court: Trustees and Individual Deposit Records

By Bill Stalter on August 23, 2019

“Allegiant [Bank] violated the industry standard of care by not maintaining consumer-level deposit records, because, as here, where there are multiple beneficiaries of a trust, the trustee must keep records of the individual deposits made for each consumer.” This finding by the trial court in the NPS civil trial had to come as a shock to Allegiant Bank, and would probably come as a surprise to many preneed trustees. With regard to the trustee’s recordkeeping…

Death Care Compliance Law

Glendale Memorial Park Cemetery: A New Lease on Life

By Bill Stalter on August 20, 2019

It is inevitable that a cemetery will run out of graves (and revenues) and eventually become the ward of taxpayers. For cemeteries with ample inventory of graves, the public’s embrace of cremation translates to declining grave sales and the acceleration of the cemetery’s demise. For several years, the media have been making these dire predictions about cemeteries. If accurate, it can only be a matter of time before cities, towns, counties and townships are required…

Death Care Compliance Law

Allegiant Bank and NPS: Know Your Client

By Bill Stalter on August 13, 2019

PNC Bank has been hit with $15 million of punitive damages because Allegiant Bank did not know its client. Before opening a fiduciary account, banks are required to perform due diligence on the trust’s grantor and on the trust’s purposes. Such due diligence is referred to as ‘know your client’ or “KYC”. KYC requirements had been in the works prior to 9/11, but the terrorist attacks provided the political momentum needed to pass the Patriot…

Death Care Compliance Law

National Prearranged Services: A Serious Lack of Fiduciary Oversight

By Bill Stalter on July 30, 2019

National Prearranged Services is back in the news after a trial court issued a new $102 million judgment against PNC Bank (the corporate successor of Allegiant Bank). Allegiant Bank served as NPS’ Missouri preneed trustee for six years beginning in 1998. When PNC Bank agreed to purchase Allegiant in 2004, PNC performed due diligence that found several serious problems with Allegiant’s administration of the NPS trusts. PNC required Allegiant to resign from the NPS trusts. …

Death Care Compliance Law

Missouri’s Right of Sepulcher: Who gets the Cremains?

By Bill Stalter on June 13, 2019

The Missouri Court of Appeals recently issued an opinion involving facts that are all too familiar with funeral directors: family members disputing who controls a funeral and the right to cremains. A mother contacted a St. Louis funeral home about arrangements for an adult son who was gravely ill. The funeral home sold the mother a preneed life insurance policy in an amount to cover a visitation and cremation. The mother also signed an authorization…

Death Care Compliance Law

Missouri’s Phase 2.5 of Preneed Exams: Section 436.425 and Insurance Funded Contracts

By Bill Stalter on May 13, 2019

In our last post we discussed the need for the Missouri State Board to provide guidance to their financial examiners regarding Section 436.425 and insurance funded contract forms. In this post we will discuss Section 436.425 and trust or joint account funded contracts. Subparagraph 9 has created confusion for examiners and sellers. That section states that a preneed contract shall “set forth the terms for cancellation by the purchaser or the seller”. The Missouri law…

Death Care Compliance Law

Missouri’s Phase 2.5 of Preneed Exams: Section 436.425 and Insurance Funded Contracts

By Bill Stalter on May 3, 2019

At its April meeting, the Missouri State Board of Embalmers and Funeral Directors discussed the formation of a “Phase 3 Committee” that would provide input for the revision of the Board financial examination handbook. The Board staff is about half way through the second round of preneed examinations (“Phase 2”), and the Board wants to adopt new examination guidelines that can be implemented when Phase 2 Exams are completed. However, there is an immediate need…

Death Care Compliance Law

Preneed Trusts and the QFT: The Individual Account Statement

By Bill Stalter on March 26, 2019

We continue our discussion of the composite Federal Form 1041QFT with a post about the individual account statement. With the composite return, income and expenses are allocated to the individual preneed account and taxes are computed at that level rather than at the trust level. To allow the IRS to test the composite tax liabilities, the trustee is required to attach a statement to the Form 1041QFT that reflects each individual account’s share of income…

Death Care Compliance Law

Preneed: A Pandora's Box of Problems

Blog Authors

Grantor Care Funds: Too Small to Pay for Flowers

NPS’ Trustee and Income Distributions: Who needs Income?

NPS’ Trial Court: Trustees and Individual Deposit Records

Glendale Memorial Park Cemetery: A New Lease on Life

Allegiant Bank and NPS: Know Your Client

National Prearranged Services: A Serious Lack of Fiduciary Oversight

Missouri’s Right of Sepulcher: Who gets the Cremains?

Missouri’s Phase 2.5 of Preneed Exams: Section 436.425 and Insurance Funded Contracts

Missouri’s Phase 2.5 of Preneed Exams: Section 436.425 and Insurance Funded Contracts

Preneed Trusts and the QFT: The Individual Account Statement

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