54-1134. PREARRANGEMENT TRUST FUND DEPOSITS. (1) Within ten (10) business days of receipt, funds received by the certified seller in payments of the prepaid contract shall be deposited in trust as follows:
(a) Fifty percent (50%) of the amount received in payment for a marker, monument or secondary container shall be deposited with the trustee to be held in trust; provided however, the first fifty percent (50%) of the fifty percent (50%), or twenty-five percent (25%) of the total, may be collected, accounted for and applied to the certified seller’s cost of purchase with the remainder to be deposited in trust. No amount need be held in trust for those items that are fully purchased by the certified seller and stored for the purchaser at the certified seller’s expense in a bonded warehouse.
(b) Upon the sale of all other funeral or cemetery merchandise or services, there shall be deposited in trust the amount of eighty-five percent (85%) of the amounts received.
(2) Funds deposited in trust shall be identified in the records of the trustee by the name of the purchaser and beneficiary, and adequate records shall be maintained to allocate all earnings to each prearrangement sales contract. Nothing shall prevent the trustee from commingling the deposits in any such trust fund account for purposes of managing and investing the funds. A common trust fund account shall be identified by the name of the trustee.
(3) The certificating authority shall, as often as it deems reasonably necessary, examine the trust account, records, documents, and contracts. No less than annually, each certificating authority is required to file a certified audit report for each of its sellers, revealing the total amount of agreements or contracts executed by the seller during the preceding year, the total value of said contracts or agreements, the amount of money collected and paid in trust pursuant to said contracts or agreements, and the name of the trustee.
(4) The interest income from the trust on all contracts may be used to pay reasonable trustee fees and administrative expenses incurred in the administration of the trust and taxes. The certificating authority shall, by rule, establish a limit on the amount of fees and expenses that may be deducted from the interest income, and the trustee shall not exceed said limit.
(5) At the time of providing the services and/or merchandise, any interest income remaining after payment of trustee fees, administrative expenses and taxes shall be disbursed as follows:
(a) On a guaranteed-price prepaid contract, to the seller.
(b) On a nonguaranteed-price prepaid contract, to the purchaser or the purchaser’s estate.
(6) Any certified seller engaging in prearrangement sales that enters into a combination sale that involves the sale of items subject to trust and any item not subject to trust shall be prohibited from increasing the sales price of those items not subject to trust with the purpose of allocating a lesser sales price to items that require a trust deposit.
History:
[54-1134, added 1989, ch. 138, sec. 2, p. 314; am. 2020, ch. 257, sec. 13, p. 751.]