RSS Death Care Compliance Law

  • Missouri’s Phase 2.5 of Preneed Exams: Section 436.425 and Insurance Funded Contracts
    In our last post we discussed the need for the Missouri State Board to provide guidance to their financial examiners regarding Section 436.425 and insurance funded contract forms.  In this post we will discuss Section 436.425 and trust or joint account funded contracts. Subparagraph 9 has created confusion for examiners and sellers.  That section states...… […]
    Bill Stalter
  • Missouri’s Phase 2.5 of Preneed Exams: Section 436.425 and Insurance Funded Contracts
    At its April meeting, the Missouri State Board of Embalmers and Funeral Directors discussed the formation of a “Phase 3 Committee” that would provide input for the revision of the Board financial examination handbook.  The Board staff is about half way through the second round of preneed examinations (“Phase 2”), and the Board wants to...… […]
    Bill Stalter
  • Preneed Trusts and the QFT: The Individual Account Statement
    We continue our discussion of the composite Federal Form 1041QFT with a post about the individual account statement. With the composite return, income and expenses are allocated to the individual preneed account and taxes are computed at that level rather than at the trust level.  To allow the IRS to test the composite tax liabilities,...… […]
    Bill Stalter
  • Federal Form 1041QFT and Composite Returns: Periodic Income Allocations
    There are two methods for preparing a Federal Form 1041QFT.  One method has the trustee applying the QFT tax rate schedule to the preneed trust’s net income.  For larger preneed trusts, this method will likely trigger the highest tax rate (37%).  The other method is called the composite return, where trust income and expenses are...… […]
    Bill Stalter
  • The 1041QFT: Twenty Years and Still a Puzzle to Some
    Tax Code Section 685 has now been law for 21 years, and this marks our 20th year of preparing the Qualified Funeral Trust return.  (And more specifically, the composite QFT return)  The QFT return was meant to simplify income reporting for a trust that has hundreds, or even thousands, of contract beneficiaries.  Yet, we continue...… […]
    Bill Stalter
  • Missouri Preneed Examination Changes: the Small Seller Proposal
    The Missouri State Board of Embalmer and Funeral Directors met this past December to discuss changes to the Preneed Examination Handbook, and former Board Chairman Don Lakin made a proposal that has merit. The State Board has licensed approximately 315 preneed sellers.  The current preneed examination procedures contemplate an onsite visit to each seller.  Many...… […]
    Bill Stalter
  • Missouri’s Exam Handbook: The Four Corners of the Manual
    Our next criticism of Missouri’s pending Exam Handbook is its violation of the Four Corners Rule, which requires a document to stand on its own when being interpreted and applied.  Common law precludes parties from going to outside sources when applying the document to different situations.  While the Handbook gives lip service to the Four Corners...… […]
    Bill Stalter
  • Missouri’s Exam Handbook: Reviewing All Contracts for What Purposes?
    The newest edition of the Missouri Preneed Exam Handbook has some significant problems.  The one we will discuss today is ambiguous instructions regarding the review of preneed contracts.  Paragraph 13 of the Handbook’s scope of financial examination states: 13) Staff shall look at 100% of all active preneed contracts that have been sold since the period...… […]
    Bill Stalter
  • Missouri’s Preneed Exam: Prioritizing the Exceptions
    “Nitpicking” was one of the terms frequently used by Missouri funeral directors when referencing their preneed exam exceptions report.  (Other descriptions are not appropriate for print.)  The initial exam guideline provided no guidance to examiners for prioritizing problems found in preneed contracts and records.  It was common to see exception reports with dozens, even hundreds,...… […]
    Bill Stalter
  • Missouri Preneed Exams: Examiner Desk Top Reviews
    The Missouri State Board’s proposed exam handbook would have examiners perform more of their review before an onsite visit is scheduled at the funeral home.  By performing a desk top review, the examiner would be better prepared when visiting the funeral home.  This should expedite the examination process.   There would be four stages to the...… […]
    Bill Stalter
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