Topic: Funeral Trusts
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We send annual 1099 forms on behalf of our funeral home customers to their funeral trust customers. Our trust department serves as trustee for the trusts. Some of the forms are returned as undeliverable, with a yellow label showing a corrected address from the USPS. Since these are customers of the funeral home, whose direct relationship is with the funeral home, do we have the authority to update those addresses? We have a process for changing addresses manually, when authorized by the customer, but we were unsure about changing the mailing address based on the USPS label.
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We do not foresee any problems with updating the funeral trust beneficiaries’ addresses in reliance on notifications from the U.S. Postal Service (USPS). Also, as trustee for the trusts, it would be in your bank’s interest to have accurate addresses for the beneficiaries, particularly given your obligation to send annual statements under the Illinois Funeral…
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If a customer has money invested in a funeral trust (with the funds invested in a certificate of deposit) and wants to cash it in, can we assess an early withdrawal penalty? The trust beneficiary is still alive, and it is not our practice to waive early withdrawal penalties unless the owner has died. The funeral home that owns the account is saying that we cannot assess a penalty. The CD states on its face that there will be a penalty for early withdrawal, along with the amount of the penalty.
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We believe you may assess an early withdrawal penalty for the certificate of deposit (CD) held for the funeral trust, because the penalty is one of the terms of the CD account. The provisions in the Illinois Funeral or Burial Funds Act (which governs both the funeral home and funeral trust beneficiaries) on which the…
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We have a funeral home customer that is attempting to set up pre-need funeral trust accounts as separate accounts for each pre-need trust beneficiary, using each beneficiary’s social security number. We believe that Illinois law requires the customer to set up these accounts as sub-accounts under a master trust agreement, using the trust’s taxpayer identification number. Can you confirm?
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We are not aware of a requirement under Illinois law to pool all pre-need funeral trusts under a master trust account. The Illinois Funeral or Burial Funds Act expressly permits a trustee to commingle pre-need funeral trust funds, but it does not require such commingling. As trustee, your institution may exercise that statutory authority to…
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May a funeral home be a trustee of funeral trusts on the deposit side of a bank without moving the account to a corporate fiduciary account?
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Funeral trust funds must be held by a corporate fiduciary under the Illinois Funeral or Burial Funds Act and Pre-Need Cemetery Sales Act. The Illinois Comptroller’s office confirmed this conclusion and noted that it is the funeral home’s responsibility to ensure that funds are held in appropriate accounts. Further, the Comptroller’s office stated that certificate…
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What is the common styling for premade funeral accounts? For example, [Funeral Home Name] for [Purchaser’s Name], with funeral home as authorized signor.
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The Illinois Funeral or Burial Funds Act requires that if a pre-paid funeral account is funded with a trust arrangement, then the trust must be maintained in a trust account with a bank, savings and loan association, savings bank or credit union. Titling the account in the name of the funeral home for the purchaser…