Arizona Laws 32-1391.05. Prearranged funeral agreements funded by trusts; definition
A. All monies paid under a prearranged funeral agreement funded by trust, except as provided in subsection B of this section, shall be deposited, within five business days after the receipt of the monies, in a prearranged funeral trust account with a financial institution doing business in this state. The monies shall be invested either in federally insured accounts, in which case the amounts so deposited shall not exceed the amount of the deposit insurance, or in direct obligations of the United States government. Federally insured accounts are defined as accounts insured by the federal deposit insurance corporation or the national credit union administration board. If invested in direct obligations of the United States government, the maturity dates of such obligations shall not exceed three years, unless rules adopted by the department of insurance and financial institutions permit a longer period and not less than five percent of the amounts so deposited shall at all times be deposited in federally insured accounts.
Terms Used In Arizona Laws 32-1391.05
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Beneficiary: means a person whose future funeral arrangements will be handled by a funeral establishment pursuant to a prearranged funeral agreement. See Arizona Laws 32-1301
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Department: means the department of health services. See Arizona Laws 32-1301
- Financial institution: means a bank, savings and loan association, trust company or credit union that is lawfully doing business in this state and that is not affiliated with a funeral establishment. See Arizona Laws 32-1301
- Fixed price prearranged funeral agreement funded by trust: means any agreement or combination of agreements that establishes a fixed price for funeral goods and services, that requires a funeral establishment to provide those funeral goods and services at the price levels in effect at the time of the execution of the agreement and that requires the purchaser to convey all or a portion of the accrued interest to the funeral establishment at the time that the funeral goods and services are actually provided. See Arizona Laws 32-1301
- Funeral establishment: means a business at a specific location that is licensed pursuant to this chapter and that is devoted to the care, storage or preparation for final disposition or transportation of dead human bodies. See Arizona Laws 32-1301
- Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
- National Credit Union Administration: The federal regulatory agency that charters and supervises federal credit unions. (NCUA also administers the National Credit Union Share Insurance Fund, which insures the deposits of federal credit unions.) Source: OCC
- Person: includes a corporation, company, partnership, firm, association or society, as well as a natural person. See Arizona Laws 1-215
- Prearranged funeral agreement: means any agreement or combination of agreements under which a payment is made before the death of the intended beneficiary for funeral goods and services to be delivered or performed after the death of the beneficiary. See Arizona Laws 32-1301
- Prearranged funeral trust account: means a trust account that is established at a financial institution and into which all monies paid on behalf of a beneficiary pursuant to a prearranged funeral agreement are deposited. See Arizona Laws 32-1301
- Property: includes both real and personal property. See Arizona Laws 1-215
- Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
- Trustee: A person or institution holding and administering property in trust.
- United States: includes the District of Columbia and the territories. See Arizona Laws 1-215
B. All monies paid under a fixed price prearranged funeral agreement funded by trust shall be deposited, within twenty-one calendar days or fifteen business days, whichever is shorter after the receipt of the monies, in a prearranged funeral trust account with a financial institution doing business in this state. In investing these monies the trustee shall exercise the judgment and care of a prudent investor under the prevailing circumstances.
C. Except as provided in this article:
1. All monies deposited in a prearranged funeral trust account and all accrued interest shall be held in the trust account for and remain the property of the beneficiary during the beneficiary‘s life and of the beneficiary’s estate after the beneficiary’s death.
2. A funeral establishment or another person shall not withdraw, transfer, remove, commingle, encumber or use as collateral any monies paid to the establishment under a prearranged funeral agreement funded by trust.
3. All monies deposited and accrued interest in a prearranged funeral trust account shall be exempt from attachment, garnishment, execution and claims of creditors, receivers and trustees of the funeral establishment other than the claims of the beneficiary or the beneficiary’s estate.
4. All monies deposited and accrued interest in a prearranged funeral trust account up to a total of $5,000 shall be exempt from attachment, garnishment, execution and claims of creditors, receivers and trustees of the beneficiary other than the claims of the funeral establishment.
D. A funeral establishment may direct the financial institution in which the trust monies are deposited to transfer the trust account to another financial institution after providing each participant in the trust with the name and location of the institution and the new trust account number.
E. For the purposes of this section, "prudent investor" means a person who exercises the same care and expertise as a person of ordinary prudence, diligence, discretion and judgment would exercise in the management of the property of others, not in regard to speculation, but in regard to the permanent disposition of the funds considering the probable income as well as the probable safety of the capital to be invested.