PROFESSIONS, VOCATIONS, AND BUSINESSES
MORTICIANS, FUNERAL DIRECTORS AND EMBALMERS
54-1134. Prearrangement trust fund deposits. A. Within ten (10) business days of receipt, funds received by the seller in payments of the prepaid contract shall be deposited in trust as follows:
(1) Fifty per cent (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 per cent (50%) of the fifty per cent (50%), or twenty-five per cent (25%) of the total, may be collected, accounted for and applied to the seller’s cost of purchase with the remainder to be deposited in trust. No amount need be held in trust for those items which are fully purchased by the seller and stored for the purchaser at seller’s expense in a bonded warehouse.
(2) Upon the sale of all other funeral or cemetery merchandise or services there shall be deposited in trust the amount of eighty-five per cent (85%) of the amounts received.
B. 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.
C. The certificating authority shall as often as it deems reasonably necessary, examine the trust account, records, documents and contracts of the seller. The certificating authority shall determine the reasonable cost of such examination, which shall be paid to the certificating authority by the seller. Each seller is hereby required to file not less than annually with the certificating authority a certified audit report revealing the number of such contracts or agreements executed by him during the preceeding 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.
D. 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 which may be deducted from the interest income and the trustee shall not exceed said limit.
E. 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:
(1) On a guaranteed price prepaid contract, to the seller.
(2) On a nonguaranteed price prepaid contract, to the purchaser or the purchaser’s estate.
F. Any person engaging in prearrangement sales who enters into a combination sale which 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 which require a trust deposit.
[54-1134, added 1989, ch. 138, sec. 2, p. 314.]