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January 21, 2015
HMDA Soup to Nuts
David Dickinson

January 22, 2015
Navigating the Treacherous Waters of IRA Rollovers, Transfers and Beneficiary Payouts
Patrice Konarik

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Mortgage Life Cycle
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David Dickinson and Jerod Moyer

February 2, 2015
Answer HSA Questions with Confidence
Whitney Johnson

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BSA/AML Compliance: Recent Developments and Common Errors
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Mortgage Life Cycle
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David Dickinson and Jerod Moyer

February 5, 2015
Annual Lending Compliance Recap
John Burnett and Andy Zavoina

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#1593410 - 08/18/11 09:19 AM Irrevocable burial account
AuditorK Offline
Platinum Poster

Registered: 02/13/03
Posts: 956
Loc: PA
We recently acquired another bank that had irrevocable burial accounts (time deposits) for customers.

These files contain signed agreements that state the funds can only be accessed at the time of the beneficiary's death and used for payment of burial expenses. There is no mention of or agreement with specific funeral homes. I believe in PA that any family member may bring in the death certificate and obtain the funds to pay funeral expenses.

The files also contain the original certificates of deposit. My question is this: Should we the bank be holding the actual certificate or should the beneficiary be in possession of this?

Deposits and Payments
#1593426 - 08/18/11 09:31 AM Re: Irrevocable burial account [Re: AuditorK]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17669
Loc: Another trip around the sun
Determine if you have a state statute that authorizes "Pre-need" burial contracts. (If you cannot locate it easily, call your state funeral directors association.)

The statute will spell out who is to do what and under what circumstances and they vary from state to state. If your bank is named as the trustee, it's appropriate that you hold the time deposit. Otherwise, it is not.

All of those I'm familiar with do require that a specific funeral home be named, so it seems a bit odd. Sometimes, banks just make stuff up...
If you want to go fast, go alone. If you want to go far, go together. African proverb

#1594029 - 08/18/11 06:43 PM Re: Irrevocable burial account [Re: Ken_Pegasus]
Deputy Dawn Offline
Gold Star

Registered: 02/21/07
Posts: 454
Loc: Pennsylvania
I found this:

§ 4310.12. Irrevocable/court-ordered burial accounts and restricted trust accounts.

If a client has a burial or trust account, the status of the account shall be determined and documented. The only burial reserve or trust account that is not considered a resource to the client is an irrevocable or court-ordered burial account or restricted trust account.

(1) Irrevocable/court-ordered burial accounts. Those accounts that can only be released to a funeral director or legal representative upon the client’s death. Documentation is required in all cases to verify irrevocability.

We have a few where a funeral home is not named in the trust as the trustee. Sometimes it is a family member or the executor of the estate.

If there are any funds in excess of the funeral expenses, it is payable to the Estate.

#1594192 - 08/19/11 11:53 AM Re: Irrevocable burial account [Re: AuditorK]
bluesky Offline

Registered: 07/29/05
Posts: 75
Same topic: We recently had a customer pass away, she had one of these Irrevocable burial accounts at our Bank with a local funeral home as Trustee. Unfortunatly, this customer had never told her family that she had prepaid for her funeral and the funeral services were handled by a different funeral home which the family had to pay for. This poor lady/family paid for two funerals. So, what happens to this CD now? It remains open and will most likely be sent to the state as abandoned property at some point. I do not think the original funeral should benefit because they did not perform a service, I beleive the funds should go to the family. The only one who has access to the funds is that funeral home which established the Trust.

#1594227 - 08/19/11 12:28 PM Re: Irrevocable burial account [Re: bluesky]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17669
Loc: Another trip around the sun
Same drill. Look at your state's statute.

The funeral home has no claim to the funds because, as you note, they did not provide the service. Regardless, who the heirs deal with in this circumstance is governed by who had control of the funds. If the funeral home has control over the funds they should turn them over to the representative of the decedent's estate upon receipt of proof of death and burial. If the heirs need to get a court order to reach that result, so be it.
If you want to go fast, go alone. If you want to go far, go together. African proverb


Moderator:  John Burnett, Ken_Pegasus