HF 2685

as introduced - 90th Legislature (2017 - 2018) Posted on 05/18/2017 09:37am

A bill for an act
relating to funeral and burial goods and services preneed providers; requiring
annual notice to persons who have contracted to receive funeral and burial goods
and services in the future; amending Minnesota Statutes 2016, sections 149A.97,
subdivision 3a; 306.762.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2016, section 149A.97, subdivision 3a, is amended to read:

Subd. 3a.

Requirements for preneed funeral agreements.

new text begin (a) new text end It is unlawful for any
person residing or doing business in this state to enter a preneed funeral agreement unless
the agreement:

(1) is written in clear, understandable language and printed in a type that is easy to read
in size and style;

(2) contains a complete, itemized description of the funeral goods, funeral services,
burial site goods, or burial site services selected or purchased, including, when appropriate,
manufacturer's name, model numbers, style numbers, and description of the type of material
used in construction;

(3) discloses clearly and conspicuously whether the prices of the goods and services
selected are guaranteed;

(4) discloses that funding options for a preneed funeral agreement consist of either
prepayment to the funeral provider or the purchase of an insurance policy;

(5) discloses whether the funds received from the purchaser are required to be placed
in a trust and, if the funds are required to be placed in a trust, provides the following
information:

(i) lists the location of the trust account, including the name, address, and telephone
number of the institution where the money will be held and any identifying account numbers,
the amount of money to be trusted, and the names of the trustees; and

(ii) advises the purchaser as to the disposition of the interest from the trust and as to
responsibility for taxes owed on the interest;

(6) contains the names, addresses, and telephone numbers of the Minnesota Department
of Health as the regulatory agency for preneed trust accounts and the Minnesota Attorney
General's Office as the regulatory agency that handles consumer complaints;

(7) discloses clearly and conspicuously that any person who makes payment under a
preneed funeral agreement may cancel the agreement subject to the procedures for
cancellation specified in subdivision 6a;

(8) contains the following statement, in boldfaced type and a minimum size of ten points:

"Within 15 calendar days after receipt of any money required to be held in trust, all such
money must be deposited in a banking institution, savings association, or credit union,
organized under state or federal laws, the accounts of which are insured by an instrumentality
of the federal government. The person for whose benefit the money was paid according to
this agreement shall be known as the beneficiary; the person or persons who paid the money
shall be known as the purchaser; and the funeral provider shall be known as the depositor.
The money must be carried in a separate account with the names of the depositor and the
purchaser as trustees for the beneficiary.

The preneed arrangement trust shall be considered an asset of the purchaser until the
death of the beneficiary. At the death of the beneficiary, the money in the trust shall be
considered an asset of the beneficiary's estate, to the extent that the value of the trust exceeds
the actual value for the goods and services provided at-need. This does not alter any asset
exclusion requirements that exist under federal law. The depositor as trustee must disclose
in writing the location of the trust account, including the name and address of the institution
where the money is being held and any identifying account numbers, to the beneficiary
when the money is deposited and when there are any subsequent changes to the location of
the trust account.";

(9) for agreements with revocable trusts, contains the following statement, in boldfaced
type and a minimum size of ten points:

"REVOCABLE TRUST:

The preneed arrangement trust being created by the purchaser is revocable. These trust
funds, including all principal and accrued interest, are the purchaser's assets. The purchaser
may withdraw the principal and accrued interest at any time prior to the death of the
beneficiary. At the death of the beneficiary, the funds shall be distributed in their entirety,
principal plus accrued interest, with no fees retained by the trustees as administrative fees.
The funds shall be distributed for the payment of the at-need funeral goods, funeral services,
burial site goods, or burial site services selected, with any excess funds distributed to the
beneficiary's estate. At any time before or at the time of the beneficiary's death, the purchaser
may transfer the preneed arrangements and related trust funds for use in the payment of
funeral goods, funeral services, burial site goods, or burial site services. The purchaser may
not be charged any fee in connection with the transfer of a preneed arrangement and trust
funds.";

(10) for agreements with irrevocable trusts, contains the following statement, in boldfaced
type and a minimum size of ten points:

"IRREVOCABLE TRUST:

A trust created to hold preneed arrangement funds is revocable in its entirety unless
specifically limited by the purchaser. The purchaser has chosen to create an irrevocable
trust in the amount of $ (insert the dollar amount of the purchaser's irrevocable trust). The
revocable portion of this trust fund is limited to that amount that exceeds the allowable
Supplemental Security Income asset exclusion used for determining eligibility for public
assistance at the time the trust is created. The principal and accrued interest may not be
withdrawn from the trust prior to the beneficiary's death, except to the extent that the trust
funds exceed the irrevocable trust limitation. At the time of the beneficiary's death, the funds
shall be distributed in their entirety, principal plus accrued interest, with no fees retained
by the trustees as administrative fees. The funds shall be distributed for the payment of the
at-need funeral goods, funeral services, burial site goods, or burial site services selected,
with any excess funds distributed to the beneficiary's estate. At any time prior to or at the
time of the beneficiary's death, the purchaser may transfer the preneed arrangements and
trust funds for use in the payment of funeral goods, funeral services, burial site goods, or
burial site services. The purchaser may not be charged any fee in connection with the transfer
of a preneed arrangement and trust funds.";

(11) provides that if the particular funeral goods, funeral services, burial site goods, or
burial site services specified in the agreement are unavailable at the time of delivery, the
funeral provider must furnish goods and services similar in style and at least equal in quality
to the material and workmanship of the goods or services specified and that the representative
of the beneficiary has the right to choose the goods or services to be substituted; deleted text begin and
deleted text end

(12) contains an itemization of the sale of grave lots, spaces, lawn crypts, niches, or
mausoleum crypts separate from all other goods and services selected deleted text begin . deleted text end new text begin ; and
new text end

new text begin (13) includes a requirement that the funeral provider, as defined in section 149A.02,
subdivision 22, annually provide a written notice to the preneed consumer, as defined in
section 149A.02, subdivision 33a, reminding the preneed consumer of the existence of the
preneed arrangement and providing the then-current name, mailing address, and telephone
number of the funeral provider, as defined in section 149A.02, subdivision 22. If the original
funeral provider has assigned or otherwise transferred the funeral provider's obligations
under the preneed arrangement to a successor funeral provider, the successor funeral provider
shall provide the written notice required under this paragraph, together with proof of the
assignment or other transfer of obligation under the preneed arrangement.
new text end

new text begin (b) The annual written notice required under paragraph (a), clause (13), to be provided
to the preneed consumer by the funeral provider must be accompanied by a reply card or
reply sheet which the preneed consumer may use to provide the funeral provider with updated
information that is relevant to the preneed arrangement. The updated information may
include:
new text end

new text begin (1) information about the status and contact information of the preneed consumer;
new text end

new text begin (2) the status and contact information of any individual or entity that represents the
preneed consumer; and
new text end

new text begin (3) information about changes in the preneed consumer's familial status; living
arrangements; or funeral, burial, or estate planning.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2018, and applies to preneed
arrangements existing on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2016, section 306.762, is amended to read:

306.762 PERMANENT RETENTION OF RECORDS.

Subdivision 1.

Required records.

new text begin (a) new text end Any cemetery association and any person, firm,
partnership, association, and corporation owning or operating a mausoleum or columbarium,
or constructing or selling space in a mausoleum or columbarium to be built, required to
deposit trust money in a permanent care and improvement fund must, in Minnesota,
permanently retain records of the trust account.

new text begin (b) new text end The records of the trust account must include the name new text begin and most recently known
mailing address new text end of the person purchasing the cemetery lot or burial space, the name new text begin and
most recently known mailing address new text end of the living representative of that person if one was
designated, and the location of the money including any identifying numbers and the name
and new text begin the most recently known mailing new text end address of the institution in which the money is held.

new text begin (c) The cemetery association or other person or entity referenced in paragraph (a) shall
annually provide a written notice to the purchaser, or living representative of the purchaser,
stating the information listed in paragraph (b). The written notice must be accompanied by
a reply card or reply sheet which the purchaser or living representative may use to provide
updated information or to ask a question. The reply card or sheet must contain the current
mailing address of the cemetery association or other person or entity referenced in paragraph
(a).
new text end

Subd. 2.

Penalty.

Any person, firm, partnership, association, or corporation knowingly
violating the provisions of this section shall be guilty of a misdemeanor and for a second
offense shall be guilty of a gross misdemeanor.

Subd. 3.

Exception.

This section shall not apply to cemeteries, mausoleums, or
columbariums owned and operated by a municipality, church, religious corporation, or
religious association.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2018, and applies to trust
accounts existing on or after that date.
new text end