Preneed trusting

Definition

The share of a prepaid funeral's price that must go into trust, and how fast it has to get there.

Why It Matters

The commonly quoted seventy percent is one of three rates in a single sentence, and a merchandise-heavy book funds far more than that: one state requires seventy percent of services, one hundred percent of cash advance items, and for each item of merchandise the greater of thirty percent of the price or a hundred and ten percent of wholesale cost, deposited within thirty days after the month of payment. The same chapter then says the money is the licensee's own property and the customer is a creditor with no interest in the trust at all. A change of control is subject to the department's disapproval, and the trust itself cannot move to a buyer without the written approval of the department AND the trustee, which is two vetoes on one deal.