Arizona Laws 32-1391.06. Service fees; prearranged funeral agreements funded by trust
A. A funeral establishment may charge an initial service fee when a person enters into a prearranged funeral agreement funded by trust of not to exceed fifteen per cent of the total amount agreed to be paid by the purchaser pursuant to the prearranged funeral agreement. If the amount to be paid by the purchaser is to be paid in installments, no more than one-half of any payment made by the purchaser may be applied to the initial service fee. If the agreement is canceled prior to the completion of the agreement, any portion of the initial service fee that has not yet been paid under the agreement is no longer due and payable to the establishment. The portion of any payment by the purchaser that is to be applied to the initial service fee shall be paid to the funeral establishment and not to the trust account.
Terms Used In Arizona Laws 32-1391.06
- 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
- Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
- 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
- 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
- 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
- Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
- Trust funds: means all monies that are deposited on behalf of a beneficiary of a prearranged funeral agreement funded by trust and all accrued net interest. See Arizona Laws 32-1301
- Writing: includes printing. See Arizona Laws 1-215
B. A funeral establishment may charge an annual service fee of not to exceed ten per cent of the interest that has accrued on the trust funds during the preceding calendar year. After each calendar year while a prearranged funeral agreement funded by trust is in effect a financial institution may release a portion of the trust funds equal to the annual service fee on receipt of a certificate of entitlement to an annual service fee from the funeral establishment.
C. The funeral establishment may direct the financial institution to pay, from time to time, from the monies in the trust account, any taxes that have accrued by reason of the income earned from funds deposited in the trust account. The payment may be made directly to the taxing authority or to the beneficiary of the trust account on the proper showing by the beneficiary that the beneficiary has paid the taxes. A financial institution may withdraw funds from the trust account, as previously agreed in writing, to pay reasonable and necessary charges for the administrative and investment management services provided by the financial institution.