Funeral Trust Accounts
by John Burnett, BOL Guru
Question: Although I have read through most of the information on the site referring to funeral trust accounts, there is always another question that comes up. We have a branch that wants to have the funeral home sign a letter authorizing all the CDs in place of having to sign a signature card for each one. Would any problems be created if we adopted this practice? In addition, any other suggestions regarding a good procedure for opening funeral trust accounts would be appreciated.
Answer: Your best advice will come from the organization responsible for regulating funeral homes in your state. (A call to your state's funeral directors association might be the easiest way to identify it.)
Pre-need burial trusts are like campaign funds or IOLTA accounts; it's someone else who is the regulated party, not the bank. It is up to the funeral home to open the account correctly; they are the ones who are in trouble if a mistake is made.
Each state has different laws. In some, the regulatory agencies actually visit the funeral home to audit compliance. In others, they require reports on all preneed burial contracts so they can confirm existence of the funds.
In this context, "branch variations" within your bank are not appropriate. Find out what the funeral directors in your state are supposed to do and try to get them to do it correctly.
First published on BankersOnline.com 1/6/03