(a) The obligation of the seller under a preneed contract shall be to make contributions into the Cemetery Merchandise and Services Trust Fund in accordance with the following formulae:

lawyer at desk

Ask a business law question, get an answer ASAP!
Thousands of highly rated, verified business lawyers.
Click here to chat with a lawyer about your rights.

Terms Used In Alabama Code 34-13-262

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Contract: A legal written agreement that becomes binding when signed.
  • Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
  • following: means next after. See Alabama Code 1-1-1
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • month: means a calendar month. See Alabama Code 1-1-1
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Trustee: A person or institution holding and administering property in trust.
(1) With respect to all cemetery merchandise, 110 percent of wholesale cost.
(2) With respect to outer burial containers, 60 percent of the purchase price specified in the preneed contract.
(3) With respect to cemetery services, 60 percent of the purchase price specified in the preneed contract.
(4) With respect to all cash advance items sold, 100 percent of the purchase price specified for the same in the preneed contract.
(5) With respect to caskets, 75 percent of the purchase price.
(b) All contributions shall be made within 30 days after the end of the calendar month in which the preneed contract is paid in full, unless, prior to that time, all liabilities of the seller under the preneed contract to deliver the specific cemetery merchandise or cemetery services, or both, or the specific cash advances, identified by the preneed provider as properly allocated to the payment, have been satisfied, or the preneed contract is validly cancelled.
(c) For all preneed contracts entered into on or after January 1, 2015, all contributions shall be made not later than 30 days after the end of the calendar month in which the sum of the monies collected on the preneed contract exceeds the amount that is not required to be contributed as determined under subsection (a), unless, prior to that time, all liabilities of the seller under the preneed contract have been satisfied, or the preneed contract is validly cancelled. Further required trust contributions on the contract shall thereafter be made not later than 30 days after the end of the calendar month in which each contract payment is collected by the seller.
(d) The trustee shall invest and reinvest the Cemetery Merchandise and Services Trust Fund.
(e) The trustee shall make regular evaluations of the fair market value of assets held in and liabilities, if any, of the Cemetery Merchandise and Services Trust Fund and provide a report of the evaluations to the seller at least quarterly. Upon receipt of each quarterly report, the seller may submit to the trustee a written and detailed analysis concerning the balance of funds in the Cemetery Merchandise and Services Trust Fund, certified under oath as being true and correct upon information and belief by a responsible officer of the seller.
(f) While the obligation of the seller to make contributions to the Cemetery Merchandise and Services Trust Fund is set forth in this section, the obligation of the seller at the time of making certain withdrawals from the Cemetery Merchandise and Services Trust Fund as herein provided for shall be calculated with respect to the current wholesale cost of cemetery merchandise and current retail price of cemetery services and cash advances at the time of withdrawal. If the fair market value as reported by the trustee exceeds 110 percent of the total of the following, the seller shall be entitled to withdraw and retain from the merchandise trust fund, the excess funds therein: 110 percent of the current wholesale cost of the liability to deliver all cemetery merchandise, 60 percent of the current retail price for all cemetery services, 60 percent of the current retail price of outer burial containers, 75 percent of the current retail price of caskets, and 100 percent of the current retail price of all cash advances, for the total of all preneed contracts for which the purchasers have paid in full, all calculated as of the time of withdrawal; and concerning the total of all preneed contracts for which the purchasers have not paid in full, 25 percent of the total of the following: 110 percent of the current wholesale cost of the liability to deliver all cemetery merchandise, 60 percent of the current retail price for all cemetery services, and 100 percent of the current retail price of all cash advances, all calculated as of the time of withdrawal.
(g) At least annually the seller shall make the aforesaid analysis and certification and provide the same to the trustee. If the certification discloses that the fair market value of the Cemetery Merchandise and Services Trust Fund is less than 100 percent of the aggregate calculated amount the seller shall from its own funds contribute to the Cemetery Merchandise and Services Trust Fund within the 12 months succeeding the annual computation the amount necessary to restore the trust fund to an amount equal to not less than 100 percent of the aggregate amount so calculated.
  Previous section
Next section  
 Division 4 Contents