HF 574

1st Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to human services; modifying asset exclusion 
  1.3             limits for funds held in certain irrevocable trusts; 
  1.4             amending Minnesota Statutes 2000, sections 149A.97, 
  1.5             subdivisions 3 and 3a; and 256B.056, subdivision 3. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2000, section 149A.97, 
  1.8   subdivision 3, is amended to read: 
  1.9      Subd. 3.  [NATURE OF TRUST.] Except as provided in this 
  1.10  section, nothing in this section shall abate the rights, duties, 
  1.11  and powers granted under chapters 501B and 520.  A trust created 
  1.12  for the holding of preneed arrangement funds shall be revocable, 
  1.13  in its entirety, unless specifically limited by the person 
  1.14  purchasing the preneed funeral goods, funeral services, burial 
  1.15  site goods, or burial site services.  If the purchaser chooses 
  1.16  to limit the revocability of the trust funds, the limitation 
  1.17  must be declared in the trust instrument and must be limited to 
  1.18  an amount equivalent to the allowable supplemental security 
  1.19  income asset exclusion used for determining eligibility for 
  1.20  public assistance at the time the trust is created.  
  1.21     Sec. 2.  Minnesota Statutes 2000, section 149A.97, 
  1.22  subdivision 3a, is amended to read: 
  1.23     Subd. 3a.  [REQUIREMENTS FOR PRENEED FUNERAL AGREEMENTS.] 
  1.24  It is unlawful for any person residing or doing business in this 
  1.25  state to enter a preneed funeral agreement unless the agreement: 
  2.1      (1) is written in clear, understandable language and 
  2.2   printed in a type that is easy to read in size and style; 
  2.3      (2) contains a complete, itemized description of the 
  2.4   funeral goods, funeral services, burial site goods, or burial 
  2.5   site services selected or purchased, including, when 
  2.6   appropriate, manufacturer's name, model numbers, style numbers, 
  2.7   and description of the type of material used in construction; 
  2.8      (3) discloses clearly and conspicuously whether the prices 
  2.9   of the goods and services selected are guaranteed; 
  2.10     (4) discloses that funding options for a preneed funeral 
  2.11  agreement consist of either prepayment to the funeral provider 
  2.12  or the purchase of an insurance policy; 
  2.13     (5) discloses whether the funds received from the purchaser 
  2.14  are required to be placed in a trust and, if the funds are 
  2.15  required to be placed in a trust, provides the following 
  2.16  information: 
  2.17     (i) lists the location of the trust account, including the 
  2.18  name, address, and telephone number of the institution where the 
  2.19  money will be held and any identifying account numbers, the 
  2.20  amount of money to be trusted, and the names of the trustees; 
  2.21  and 
  2.22     (ii) advises the purchaser as to the disposition of the 
  2.23  interest from the trust and as to responsibility for taxes owed 
  2.24  on the interest; 
  2.25     (6) contains the names, addresses, and telephone numbers of 
  2.26  the Minnesota department of health as the regulatory agency for 
  2.27  preneed trust accounts and the Minnesota attorney general's 
  2.28  office as the regulatory agency that handles consumer 
  2.29  complaints; 
  2.30     (7) discloses clearly and conspicuously that any person who 
  2.31  makes payment under a preneed funeral agreement may cancel the 
  2.32  agreement subject to the procedures for cancellation specified 
  2.33  in subdivision 6a; 
  2.34     (8) contains the following statement, in bold-faced type 
  2.35  and a minimum size of ten points: 
  2.36     "Within 15 calendar days after receipt of any money 
  3.1   required to be held in trust, all such money must be deposited 
  3.2   in a banking institution, savings association, or credit union, 
  3.3   organized under state or federal laws, the accounts of which are 
  3.4   insured by an instrumentality of the federal government.  The 
  3.5   person for whose benefit the money was paid according to this 
  3.6   agreement shall be known as the beneficiary; the person or 
  3.7   persons who paid the money shall be known as the purchaser; and 
  3.8   the funeral provider shall be known as the depositor.  The money 
  3.9   must be carried in a separate account with the names of the 
  3.10  depositor and the purchaser as trustees for the beneficiary. 
  3.11     The preneed arrangement trust shall be considered an asset 
  3.12  of the purchaser until the death of the beneficiary.  At the 
  3.13  death of the beneficiary, the money in the trust shall be 
  3.14  considered an asset of the beneficiary's estate, to the extent 
  3.15  that the value of the trust exceeds the actual value for the 
  3.16  goods and services provided at-need.  This does not alter any 
  3.17  asset exclusion requirements that exist under federal law.  The 
  3.18  depositor as trustee must disclose in writing the location of 
  3.19  the trust account, including the name and address of the 
  3.20  institution where the money is being held and any identifying 
  3.21  account numbers, to the beneficiary when the money is deposited 
  3.22  and when there are any subsequent changes to the location of the 
  3.23  trust account."; 
  3.24     (9) for agreements with revocable trusts, contains the 
  3.25  following statement, in bold-faced type and a minimum size of 
  3.26  ten points: 
  3.27     "REVOCABLE TRUST: 
  3.28     The preneed arrangement trust being created by the 
  3.29  purchaser is revocable.  These trust funds, including all 
  3.30  principal and accrued interest, are the purchaser's assets.  The 
  3.31  purchaser may withdraw the principal and accrued interest at any 
  3.32  time prior to the death of the beneficiary.  At the death of the 
  3.33  beneficiary, the funds shall be distributed in their entirety, 
  3.34  principal plus accrued interest, with no fees retained by the 
  3.35  trustees as administrative fees.  The funds shall be distributed 
  3.36  for the payment of the at-need funeral goods, funeral services, 
  4.1   burial site goods, or burial site services selected, with any 
  4.2   excess funds distributed to the beneficiary's estate.  At any 
  4.3   time before or at the time of the beneficiary's death, the 
  4.4   purchaser may transfer the preneed arrangements and related 
  4.5   trust funds for use in the payment of funeral goods, funeral 
  4.6   services, burial site goods, or burial site services.  The 
  4.7   purchaser may not be charged any fee in connection with the 
  4.8   transfer of a preneed arrangement and trust funds."; 
  4.9      (10) for agreements with irrevocable trusts, contains the 
  4.10  following statement, in bold-faced type and a minimum size of 
  4.11  ten points: 
  4.12     "IRREVOCABLE TRUST: 
  4.13     A trust created to hold preneed arrangement funds is 
  4.14  revocable in its entirety unless specifically limited by the 
  4.15  purchaser.  The purchaser has chosen to create an irrevocable 
  4.16  trust in the amount of $ (insert the dollar amount of the 
  4.17  purchaser's irrevocable trust).  The revocable portion of this 
  4.18  trust fund is limited to that amount that exceeds the allowable 
  4.19  supplemental security income asset exclusion used for 
  4.20  determining eligibility for public assistance at the time the 
  4.21  trust is created $ (insert the dollar amount of the portion of 
  4.22  the irrevocable trust that is revocable).  The principal and 
  4.23  accrued interest may not be withdrawn from the trust prior to 
  4.24  the beneficiary's death, except to the extent that the trust 
  4.25  funds exceed the irrevocable trust limitation.  At the time of 
  4.26  the beneficiary's death, the funds shall be distributed in their 
  4.27  entirety, principal plus accrued interest, with no fees retained 
  4.28  by the trustees as administrative fees.  The funds shall be 
  4.29  distributed for the payment of the at-need funeral goods, 
  4.30  funeral services, burial site goods, or burial site services 
  4.31  selected, with any excess funds distributed to the beneficiary's 
  4.32  estate.  At any time prior to or at the time of the 
  4.33  beneficiary's death, the purchaser may transfer the preneed 
  4.34  arrangements and trust funds for use in the payment of funeral 
  4.35  goods, funeral services, burial site goods, or burial site 
  4.36  services.  The purchaser may not be charged any fee in 
  5.1   connection with the transfer of a preneed arrangement and trust 
  5.2   funds."; 
  5.3      (11) provides that if the particular funeral goods, funeral 
  5.4   services, burial site goods, or burial site services specified 
  5.5   in the agreement are unavailable at the time of delivery, the 
  5.6   funeral provider must furnish goods and services similar in 
  5.7   style and at least equal in quality to the material and 
  5.8   workmanship of the goods or services specified and that the 
  5.9   representative of the beneficiary has the right to choose the 
  5.10  goods or services to be substituted; and 
  5.11     (12) contains an itemization of the sale of grave lots, 
  5.12  spaces, lawn crypts, niches, or mausoleum crypts separate from 
  5.13  all other goods and services selected. 
  5.14     Sec. 3.  Minnesota Statutes 2000, section 256B.056, 
  5.15  subdivision 3, is amended to read: 
  5.16     Subd. 3.  [ASSET LIMITATIONS.] To be eligible for medical 
  5.17  assistance, a person must not individually own more than $3,000 
  5.18  in assets, or if a member of a household with two family 
  5.19  members,husband and wife, or parent and child, the household 
  5.20  must not own more than $6,000 in assets, plus $200 for each 
  5.21  additional legal dependent.  In addition to these maximum 
  5.22  amounts, an eligible individual or family may accrue interest on 
  5.23  these amounts, but they must be reduced to the maximum at the 
  5.24  time of an eligibility redetermination.  The accumulation of the 
  5.25  clothing and personal needs allowance according to section 
  5.26  256B.35 must also be reduced to the maximum at the time of the 
  5.27  eligibility redetermination.  The value of assets that are not 
  5.28  considered in determining eligibility for medical assistance is 
  5.29  the value of those assets excluded under the AFDC state plan as 
  5.30  of July 16, 1996, as required by the Personal Responsibility and 
  5.31  Work Opportunity Reconciliation Act of 1996 (PRWORA), Public Law 
  5.32  Number 104-193, for families and children, and the supplemental 
  5.33  security income program for aged, blind, and disabled persons, 
  5.34  with the following exceptions: 
  5.35     (a) Household goods and personal effects are not considered.
  5.36     (b) Capital and operating assets of a trade or business 
  6.1   that the local agency determines are necessary to the person's 
  6.2   ability to earn an income are not considered. 
  6.3      (c) Motor vehicles are excluded to the same extent excluded 
  6.4   by the supplemental security income program. 
  6.5      (d) Funds held in an irrevocable trust as a part of a 
  6.6   preneed funeral arrangement complying with the provisions of 
  6.7   section 149A.97 are not considered. 
  6.8      (e) Other assets designated as burial expenses are excluded 
  6.9   to the same extent excluded by the supplemental security income 
  6.10  program. 
  6.11     Sec. 4.  [EFFECTIVE DATE.] 
  6.12     Sections 1 to 3 are effective the day following final 
  6.13  enactment.