Second Regular Session 115th General Assembly (2008)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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HOUSE ENROLLED ACT No. 1026
AN ACT to amend the Indiana Code concerning funerals and cemeteries and to make an
appropriation.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 23-14-48-3; (08)HE1026.1.1. -->
SECTION 1. IC 23-14-48-3, AS AMENDED BY P.L.65-2007,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2008]: Sec. 3. (a) A perpetual care fund shall be established
under this chapter as follows:
(1) In the case of a cemetery for earth burials, by the application
and payment to the perpetual care fund of an amount at least
equal to:
(A) fifteen percent (15%) of the sale price; or
(B) eighty cents ($0.80) per square foot of area;
of each burial plot sold or transferred, whichever is greater.
(2) In the case of a community or public mausoleum, or
community or public garden crypt, by the application and
payment to the perpetual care fund of an amount at least equal to:
(A) eight percent (8%) of the sale price; or
(B) one hundred dollars ($100) per crypt sold or transferred;
whichever is greater.
(3) In the case of a community columbarium, by the application
and payment to the perpetual care fund of an amount at least
equal to twenty dollars ($20) per niche sold or transferred.
(b) From the sale price, any payment on the sale price, or in a
nonmonetary transfer, the owner shall pay an amount in proportion to
the requirements of subsection (a)(1) through (a)(3) to the care fund.
The payment must be in cash and shall be deposited with the custodian
or trustee of the fund:
(1) not more than thirty (30) days after the end of the month in
which payments on the sale are received; or
(2) not more than thirty (30) days after the end of the month in
which there was a transfer which did not involve a sale.
(c) The payments required by this section are required to be paid
only on the original sale or transfer and not again for any subsequent
resale or transfer of the same ground interment rights, crypt, or niche.
(d) The custodian or trustee of a fund established under this chapter
must keep the fund segregated from any other fund or account
belonging to the owner of the cemetery.
SOURCE: IC 23-14-48-7; (08)HE1026.1.2. -->
SECTION 2. IC 23-14-48-7, AS AMENDED BY P.L.65-2007,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2008]: Sec. 7. (a) Not more than ninety (90) days after the end
of the fiscal year of a cemetery to which this chapter applies, the
custodian or trustee of the perpetual care fund of the cemetery shall
prepare and file with the owner of the cemetery a detailed accounting
and report of the perpetual care fund for the preceding fiscal year. The
report:
(1) must include, among other things, a properly itemized listing
of the securities in which the funds are invested; and
(2) shall be available for inspection and copying at all times by
any owner of or holder of a burial right in the cemetery at the
usual place at which the regular business of the cemetery is
transacted.
(b) Not more than one hundred five (105) days after the end of the
fiscal year of a cemetery to which this chapter applies, the
custodian or
trustee of the perpetual care fund of the cemetery shall file the report
required under subsection (a) with the state board of funeral and
cemetery service.
(c) The state board of funeral and cemetery service may audit or
order an audit of the perpetual care fund of a cemetery if the state board
of funeral and cemetery service determines that the
custodian or trustee
of the perpetual care fund is not complying with the requirements set
forth in subsections (a) and (b). The cemetery that is the subject of the
audit shall pay all costs associated with the audit.
(d) The owner of a cemetery shall maintain a report required by
this section for the longer of:
(1) ten (10) years; or
(2) three (3) years after the date the owner sells or otherwise
transfers the cemetery.
SOURCE: IC 23-14-77; (08)HE1026.1.3. -->
SECTION 3. IC 23-14-77 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2008]:
Chapter 77. Vaults Used to Encase Human Remains
Sec. 1. A person who sells or otherwise furnishes to another
person a vault that:
(1) will be used to encase the remains of a deceased individual;
and
(2) is not airtight and watertight;
shall inform the other person in writing that the vault is not
airtight and watertight before the person sells or otherwise
furnishes the vault to the other person.
Sec. 2. A person who violates this chapter commits a Class B
infraction.
SOURCE: IC 30-2-9-7; (08)HE1026.1.4. -->
SECTION 4. IC 30-2-9-7, AS AMENDED BY P.L.113-2007,
SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2009]: Sec. 7. (a) Except as provided in subsection (b)
or (c), a person who violates this chapter or makes any false and
fraudulent report required under this chapter commits a Class B
misdemeanor.
(b) A person who knowingly or intentionally uses or disburses
funds in a funeral trust established under this chapter for purposes
other than the purposes required under this chapter commits a Class C
felony.
(c) Except as authorized in an agreement described in section 4
of this chapter permitting the early withdrawal of funds, a trustee
that disburses funds in a funeral trust established under this
chapter without verifying:
(1) the death of the individual for whom services are to be
provided under the contract; and
(2) that the beneficiary fully performed all funeral and burial
services provided for in the contract;
through the use of documentation required under rules adopted by
the state board of funeral and cemetery service established by
IC 25-15-9-1 commits a Class A infraction.
SOURCE: IC 30-2-10-5; (08)HE1026.1.5. -->
SECTION 5. IC 30-2-10-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 5. The contract under
which funds are accepted under this chapter must be in writing and
contain, as a minimum, the following provisions:
(1) Details of the professional services, facilities, equipment, and
a description of merchandise to be provided by the beneficiary.
If
the merchandise or equipment includes a vault (as defined in
IC 23-14-33-33) that:
(A) will be used to encase the remains of a deceased
individual; and
(B) is not airtight and watertight;
the details must include a written statement indicating that
the vault is not airtight and watertight.
(2) A provision that the beneficiary may provide merchandise of
equal or better quality if the merchandise contracted for is no
longer available at the time the merchandise is to be provided.
(3) The place of the funeral and the place of the burial or other
final disposition to be made of the decedent.
(4) An acknowledgment by the settlor that he the settlor
understands the irrevocable nature of the trust.
(5) A provision for reasonable adjustment of the services, or cost
of services, if the body is transported a distance greater than
twenty-five (25) miles to the place of funeral or the place of burial
or final disposition and transportation of a distance in excess of
twenty-five (25) miles was not contemplated at the time of the
execution of the contract.
(6) A provision for full payment of the contract amount by the
settlor, a description of the manner in which the funds are to be
deposited, and a statement that the interest will accrue to the trust
account and a further statement that the principal and interest
earned shall inure to the beneficiary to cover all the costs incident
to the beneficiary's performance of the contract, any excess to be
refunded to the estate of the settlor or to the heirs at law.
(7) The settlor's name, address, and social security number.
(8) The date that the funeral trust is executed by the settlor.
(9) The trustee's name and address.
(10) The beneficiary's license number issued by the state board of
funeral service.
(11) A provision that except under the circumstances described
in subsection (12), only the settlor may change the beneficiary,
that he the settlor may make the change at any time, and that the
change is not effective until written notification is given to the
original beneficiary.
(12) A provision that allows the state board of funeral service to
change the beneficiary by naming a funeral home as new
beneficiary if the original beneficiary becomes deceased,
dissolved, terminated, or otherwise loses beneficiary status as a
licensee of the state board, and the settlor or his the settlor's
guardian or personal representative fails to select a qualified
beneficiary.
SOURCE: IC 30-2-10-9; (08)HE1026.1.6. -->
SOURCE: IC 30-2-10-9. -->
SECTION 6. IC 30-2-10-9, AS AMENDED BY P.L.113-2007,
SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2009]: Sec. 9. (a) Except as provided in subsection (b),
a person who knowingly violates this chapter commits a Class A
misdemeanor.
(b) A person who knowingly or intentionally uses or disburses
funds in a funeral trust established under this chapter for purposes
other than the purposes required under this chapter commits a Class C
felony.
(c) A trustee that disburses funds in a funeral trust established
under this chapter without verifying:
(1) the death of the individual for whom services are to be
provided under the contract; and
(2) that the beneficiary fully performed all funeral and burial
services provided for in the contract;
through the use of documentation required under rules adopted by
the state board of funeral and cemetery service established by
IC 25-15-9-1 commits a Class A infraction.
SOURCE: IC 30-2-13-12.5; (08)HE1026.1.7. -->
SECTION 7. IC 30-2-13-12.5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 12.5. (a) This section
applies to the following contracts entered into or established under this
chapter after June 30, 1999:
(1) Contracts for prepaid services.
(2) Contracts for prepaid merchandise.
(3) Trusts or escrows established to hold consideration paid for
services or merchandise subject to a contract entered into under
this chapter.
(b) A contract between a purchaser and a seller must:
(1) specify that the consideration for the contract is:
(A) cash, payable either in
a lump sum or
in installments; or
(B) an insurance policy that is:
(i) newly issued in conjunction with and integral to the
contract;
(ii) issued previously in a transaction separate and distinct
from the contract; or
(iii) both.
If a contract is funded with an insurance policy, the ownership
of the policy must be irrevocably assigned to a trustee, and the
seller may not borrow against, pledge, withdraw, or impair the
cash value of the policy;
(2) specify that only the purchaser, acting by written notice to the
seller, may revoke the contract within thirty (30) days after the
date the contract is signed by the purchaser and the seller and that
the contract becomes irrevocable upon the expiration of the thirty
(30) day period;
(3) specify that, if the contract is revoked, the seller shall refund
and return to the purchaser, without interest, the cash or insurance
policy used to fund the contract;
(4) specify that not more than thirty (30) days after the contract is
signed by the purchaser and the seller, the whole of the cash or
insurance policy serving as consideration for the contract must be
deposited into a trust or escrow authorized by subsection (c) or
(d). However, a seller may elect to serve as trustee of a previously
existing life insurance contract;
(5) except as provided in subsection (f), unconditionally require
that the seller shall deliver all services or merchandise, or both,
specified in the contract and receive as consideration for the
delivery of services or merchandise, or both, only the cash or
insurance policy held in trust or escrow without regard to the
solvency of the insurer or the adequacy or loss in value of any
cash deposit or insurance policy used to fund a contract;
(6) except as provided in subsection (f), prohibit a seller from
imposing additional charges to recover any shortage or difference
between the retail prices for services or merchandise, or both, in
effect on the date of delivery of the services or merchandise, or
both, and the value of the trust or escrow applicable to the
contract on the date of delivery;
(7) require that a seller accepting the transfer of a contract
permitted under section 13 of this chapter shall honor the
requirements and obligations of the contract;
(8) permit the seller to assess a finance charge on a contract sold
on an installment basis and require that the seller disclose to the
purchaser the applicable requirements of federal and Indiana law;
(9) provide that the contract must comply with the following
requirements:
(A) The contract must be made in a form that is:
(i) written in clear and understandable language; and
(ii) printed in a size and style of type that is easy to read.
(B) The contract must describe the services, merchandise, or
cash advance items being purchased.
If the merchandise or
cash advance items include a vault (as defined in
IC 23-14-33-33) that:
(i) will be used to encase the remains of a deceased
individual; and
(ii) is not airtight and watertight;
the contract must include a written statement indicating
that the vault is not airtight and watertight.
(C) The contract must identify the following by name, address,
and telephone number:
(i) The seller.
(ii) The purchaser.
(iii) The contract beneficiary if the beneficiary is an
individual other than the purchaser.
(D) The contract must contain the seller's certificate of
authority number and the date of the contract.
(E) The contract must provide that if an item of the particular
services or merchandise specified in the contract is
unavailable at the time of delivery, the seller shall deliver
services or merchandise similar in style, quality, and of equal
value to the unavailable item in the place of the item.
(F) The contract must disclose the precise manner in which the
contract is to be funded by:
(i) identifying the consideration for the contract;
(ii) identifying the name, number, if known, and issuer of
any insurance policy used to fund the contract; and
(iii) including the identity and location of the trustee or
escrow agent,
acting as fiduciary, who is to hold the trust
or escrow.
(G) The contract must disclose that the seller reserves the right
to assess an extra charge for:
(i) transportation costs;
(ii) services or merchandise incurred in the transport of
human remains a distance greater than twenty-five (25)
miles from the seller's place of business; and
(iii) service charges necessarily incident to the transport of
human remains and in excess of those service charges
specified in the contract.
(H) The contract must disclose the following:
(i) The amount, if any, the seller has elected to receive under
subsection (c)(1) or subsection (d)(6).
(ii) That a commission or fee may be paid to the seller or the
seller's agent on a contract funded under subsection
(b)(1)(B)(i).
(10) specify that a purchaser has the unrestricted right to
designate one (1) or more successor sellers to whom the contract
may be transferred under section 13 of this chapter, but that such
a transfer is effective only with the consent of the newly
designated seller and upon the fulfillment of the other
requirements of section 13 of this chapter;
(11) specify that if cash advance items are funded in the contract,
the seller agrees to deliver the cash advance items under one (1)
of the following alternatives:
(A) Delivery is unconditionally guaranteed at the option of the
seller.
(B) Delivery is conditionally guaranteed for a seller and will
be equal in value to the total value of the trust or escrow
account maintained for the purchaser multiplied by the
percentage of the total original contract price represented by
cash advance items;
(12) specify that a release from trust or escrow shall occur only
upon the seller's delivery of services or merchandise, or both;
(13) permit, at the option of the seller, the incorporation of the
trust or escrow language contained in subsection (c) or (d)
directly into the contract;
(14) prohibit the seller from charging any service, transaction, or
other type of fee or charge unless the fee is:
(A) authorized under subsections (c)(1) and (d)(6) and section
27 of this chapter; or
(B) included within the definitions contained in section 8 or
11.5 of this chapter.
(c) A trust account authorized and established under this chapter
must do all of the following:
(1) Be irrevocable and require either of the following:
(A) The seller deposit the insurance policy used to fund the
contract into the trust account. However, for contracts funded
after June 30, 1995, with a previously issued insurance policy,
the seller may serve instead of a trustee if the seller is qualified
to do so under section 11(c) of this chapter.
(B) The seller deposit the cash used to fund the contract into
the trust account. However, as consideration for the sale of the
contract and any expense incurred by the seller in conjunction
with the sale of the contract, the contract must permit the seller
to notify, within a ten (10) day period following the date the
contract becomes irrevocable, the trustee of its election to
receive only up to ten percent (10%) of the seller's original
contract price for services or merchandise, or both.
(2) Designate the seller as the beneficiary of the trust.
(3) Designate a trustee qualified under this chapter and authorize
the trustee to assess the charges authorized under section 18 of
this chapter.
(4) Require that a separate account be maintained in the name of
each purchaser.
(5) Require that any interest, dividend, or accumulation in the
account be reinvested and added to the principal.
(6) Permit the assets of the several, separate accounts to be
commingled for investment purposes.
(7) Require that on receipt of the seller's proof of delivery of
services or merchandise the trustee shall remit to the seller the
full amount in trust applicable to the purchaser's contract and all
of the accumulated interest.
(8) Permit the seller to retain the remaining amount if the amount
in the trust account is greater than the seller's total current retail
price of all services and merchandise subject to the contract at the
time of delivery of all services or merchandise subject to the
contract. However, in the case of a contract funded under
subsection (b)(1)(B)(ii), the seller may not retain the remaining
amount but must pay the remaining amount to the entity or
individual designated by the insured as the beneficiary of the
death benefit proceeds not later than sixty (60) days after the
receipt and deposit of the proceeds by the seller. The seller may
not qualify as a beneficiary of the remaining amount or the
insurance death benefit. In the case of all other contracts funded
under this chapter, the seller may opt to return the remaining
amount to the individual designated by the purchaser to receive
the remainder or to the purchaser's estate.
(d) An escrow account authorized and established under this chapter
must do all of the following:
(1) Be irrevocable and require that the seller deposit all cash or
the insurance policy used to fund the contract into the escrow
account.
(2) Designate the seller as the recipient of the escrow funds.
(3) Designate an escrow agent,
acting as fiduciary, qualified
under this chapter to act as escrow agent
acting as fiduciary and
authorize the escrow agent
acting as fiduciary to assess the
charges authorized under section 18 of this chapter.
(4) Require that the escrow account be maintained in the name of
the seller and serve as a depository for all cash or insurance
policies used to fund contracts sold by the seller.
(5) Permit the investment of and commingling of cash for
investment purposes.
(6) Permit the seller to receive an administrative or service fee at
the option of the seller. The seller may opt to receive the fee after
the day following the date the contract becomes irrevocable. The
amount of the fee may not exceed ten percent (10%) of the seller's
total contract price for services or merchandise or both.
(7) Require that on delivery of services or merchandise, the
escrow agent shall remit to the seller an amount equal to:
(A) the seller's original retail price as set forth in the contract
for the services or merchandise delivered; minus
(B) the amount, if any, received by the seller under subdivision
(6).
(8) Permit the seller to receive monthly payments of the interest
earned and the appreciation in the value of the escrow assets to
the extent that the total value of the escrow after a payment
authorized under this subdivision is not less than:
(A) the original contract value of all services or merchandise
under the contracts, or parts of the contracts that remain
undelivered; minus
(B) the amounts, if any, received by the seller under
subdivision (6).
(e) A trust account or an escrow account established under this
section must contain a concise written description of all the provisions
of this chapter that apply to the account.
(f) A seller's guarantee of delivery of all services or merchandise
subject to a contract sold by the seller or transferred to a seller is
unconditional except in the instance of one (1) of the following
circumstances:
(1) An installment contract funded with cash or an insurance
policy issued in conjunction with the contract is guaranteed to the
extent of the cash paid or death benefits available at the time of
death of the individual for whom services or merchandise are to
be provided.
(2) A contract funded with an insurance policy issued previously
and not in conjunction with the contract is guaranteed to the
extent of the death benefit proceeds available at the time of the
individual for whom services or merchandise are to be provided.
(3) A contract funded with an insurance policy issued in
conjunction with the contract, but having a limited or qualified
death benefit period, is guaranteed to the extent of the death
benefit proceeds available at the time of the death of the
individual for whom services or merchandise are to be provided.
(4) A transportation expense incurred by the seller while
transporting human remains a distance greater than twenty-five
(25) miles from the seller's place of business, plus any charge for
services or merchandise necessarily incident to the transport of
the human remains.
(5) The seller agrees to conditionally guarantee the delivery of
cash advance items under subsection (b)(11)(B).
In the instance of unguaranteed delivery, the seller may reduce the
value or number of the services or merchandise subject to the contract
or cash advance items delivered or deliver the services or merchandise
in full on the condition that the seller receives adequate consideration
to compensate the seller for the unguaranteed part of the contract.
(g) The entire value of an escrow or trust established under this
chapter may not be considered as a resource in determining a person's
eligibility for Medicaid under IC 12-15-2-17.
(h) This chapter does not prohibit a purchaser from immediately
making the trust or escrow required under this chapter irrevocable and
assigning ownership of an insurance policy used to fund a contract to
obtain favorable consideration for Medicaid, Supplemental Security
Income, or another public assistance program under federal or state
law.
(i) A seller may not accept or deposit into a trust or escrow account
cash, an insurance policy, or any other property as consideration for
services or merchandise to be provided in the future except in
conjunction with a contract authorized by this chapter.
SOURCE: IC 30-2-13-13; (08)HE1026.1.8. -->
SECTION 8. IC 30-2-13-13 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 13. (a) Notwithstanding
section 10 of this chapter, as used in this section, "seller" means an
individual, a person doing business as a sole proprietor, a firm, a
corporation, an association, a limited liability company, or a
partnership:
(1) contracting to provide prepaid or at-need services or
merchandise, or both, to a named individual; and
(2) holding a certificate of authority under this chapter.
(b) A purchaser has the option to designate one (1) or more
successor sellers to provide:
(1) prepaid services or merchandise; or
(2) at-need services or merchandise.
A purchaser who exercises the purchaser's option to designate a
successor seller shall give written notice of the designation to the
currently designated seller, successor seller, and trustee or escrow
agent. Only a purchaser may exercise the option to designate a new
seller. However, the designation is ineffective unless the newly
designated seller consents to the designation.
(c) If a purchaser designates a successor seller, and the successor
seller consents to the designation, not less than thirty (30) days after
receiving notice under subsection (b), the seller who was previously
designated shall:
(1) relinquish and transfer all rights under the contract;
(2) transfer to the successor the contract; and
(3) release from trust or escrow for subsequent deposit to the
successor seller's trust or escrow all property being held as
consideration for the contract, together with an itemized statement
disclosing all services or merchandise delivered as of the date of
transfer.
However, a seller who was previously designated to provide the
services or merchandise shall comply with section 30 of this
chapter. The seller and the successor sellers shall cooperate to ensure
that there is no forfeiture or loss of a right or benefit under the contract
and that all contract terms are fulfilled. If similar prepaid or at-need
services or merchandise are purchased from one (1) or more sellers, the
contract that is first in time prevails and is valid.
(d) The trustee shall confirm the transfer to the seller, successor
seller, and purchaser by written notice confirming the identity and
value of the property transferred.
(e) It is a violation of this chapter for a seller to knowingly induce
a purchaser to breach an existing contract that provides for prepaid or
at-need services or merchandise.
(f) This section does not abrogate the requirements of IC 25-15-4
concerning contracting for or delivering at-need services and
merchandise.
(g) It is a violation of this chapter for a seller to knowingly:
(1) induce a purchaser who has the right to designate a successor
seller under subsection (b) to:
(A) make a designation of a successor seller;
(B) breach an existing contract for prepaid or at-need services
or merchandise; or
(C) enter into an at-need or prepaid contract calling for the
delivery of similar services or merchandise; or
(2) offer a monetary inducement or the exchange or substitution
of free or discounted services or merchandise in an effort to
induce a purchaser to effect a change in the designation of a seller
of prepaid or at-need services or merchandise.
(h) It is a violation of this chapter for a seller to provide free or
discounted burial rights:
(1) as an inducement or as consideration for the transfer of a
contract; or
(2) in an effort to induce a purchaser to effect a change in the
designation of a seller of prepaid or at-need services or
merchandise.
SOURCE: IC 30-2-13-30; (08)HE1026.1.9. -->
SECTION 9. IC 30-2-13-30 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 30. (a) The seller shall
maintain accurate records, books, and accounts for each contract sold
under this chapter containing the following:
(1) Copies of all contracts.
(2) The dates of all contracts.
(3) The amounts paid and received under each contract.
(4) The complete name, address, and identification of all parties
to each contract.
(b) The seller shall maintain at the seller's principal Indiana business
address complete records of all transactions under this chapter that
involve the seller. The records may be audited and examined by the
board at any reasonable time.
(c) The seller shall maintain all records required by this section for
at least the longer of:
(1) ten (10) years; or
(2) three (3) years after the date of full performance of a contract.
The records are business records and customer lists within the meaning
of IC 24-2-3.
(d) The requirements of this section apply to a seller, a successor
seller, and a seller who was previously designated to provide
services or merchandise to a purchaser.
SOURCE: IC 30-2-13-38; (08)HE1026.1.10. -->
SECTION 10. IC 30-2-13-38 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2009]: Sec. 38. (a) A seller
who violates a provision of this chapter commits an uncured deceptive
act (as defined in IC 24-5-0.5-2).
(b) A person doing business as a sole proprietor, a firm, a limited
liability company, a corporation, an association, or a partnership, but
not acting as a seller that:
(1) sells or advertises prepaid services or merchandise or services
or merchandise (as defined in section 8 of this chapter) and fails
to obtain the certificate of authority required by section 33 of this
chapter; or
(2) sells or advertises prepaid services or merchandise or services
or merchandise (as defined in section 8 of this chapter) after the
entity's certificate of authority has:
(A) expired; or
(B) been rescinded, revoked, or suspended by the board;
commits a Class A misdemeanor. Each act committed in violation of
this subsection constitutes a separate offense.
(c) The following may maintain an action to enjoin an individual or
entity from continuing to violate this section:
(1) The board.
(2) The attorney general.
(3) The prosecuting attorney of a county in which a violation
occurs.
(d) A purchaser has a private right of action against a seller who
commits an uncured deceptive act.
(e) A trustee or escrow agent, acting as a fiduciary, that
disburses funds in a trust or escrow account established under this
chapter without verifying that the seller has delivered the services
or merchandise for which the funds were deposited through the use
of documentation required under rules adopted by the state board
of funeral and cemetery service established by IC 25-15-9-1
commits a Class A infraction.
SOURCE: IC 30-2-13-39; (08)HE1026.1.11. -->
SECTION 11. IC 30-2-13-39 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2008]: Sec. 39. (a) This section does not apply
to a trust funded by the method described in section 11(c) of this
chapter.
(b) A seller may not be an affiliate, a parent, or a subsidiary
organization of the trustee or escrow agent, acting as a fiduciary,
of a trust or escrow account established after June 30, 2008, to hold
consideration paid for services or merchandise subject to a
contract entered into under this chapter by the seller and a
purchaser.
SOURCE: IC 30-4-1-1; (08)HE1026.1.12. -->
SECTION 12. IC 30-4-1-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 1. (a) A trust is a
fiduciary relationship between a person who, as trustee, holds title to
property and another person for whom, as beneficiary, the title is held.
(b) Subject to IC 30-4-2-8, the same person may be both the trustee
and a beneficiary.
(c) The rules of law contained in this article do not apply to:
(1) trusts created by operation of law;
(2) business trusts (as defined in IC 23-5-1);
(3) security instruments and creditor arrangements;
(4) voting trusts;
(5) religious, educational, and cultural institutions, created in
other than trust form, except with respect to the application of
IC 30-4-5-18 through IC 30-4-5-23 as those sections relate to the
maintenance of federal income tax exemption privileges to which
an institution is entitled;
(6) corporations and other entities governed by IC 23-17, except
with respect to IC 30-4-5-18 through IC 30-4-5-23 as those
sections relate to the maintenance of federal income tax
exemption privileges to which a corporation or other entity is
entitled;
(7) except as provided in this article for trusts for a
benevolent public purpose and as provided in the Indiana
uniform prudent investor act (IC 30-4-3.5):
(A) prepaid funeral plans;
(8) (B) trusts for the care and upkeep of cemeteries; and
(9) (C) agreements to furnish funeral services; and
(10) (8) trusts created or authorized by statute other than this
article.
(d) IC 30-4-3-2(a) applies to an employee benefit trust that meets
the requirements set forth in IC 30-4-3-2(c). However, no other
provision of this article applies to an employee benefit trust.
SOURCE: IC 30-4-1-2; (08)HE1026.1.13. -->
SECTION 13. IC 30-4-1-2, AS AMENDED BY P.L.238-2005,
SECTION 19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2008]: Sec. 2. As used in this article:
(1) "Adult" means any person eighteen (18) years of age or older.
(2) "Affiliate" means a parent, descendant, spouse, spouse of a
descendant, brother, sister, spouse of a brother or sister,
employee, director, officer, partner, joint venturer, a corporation
subject to common control with the trustee, a shareholder, or
corporation who controls the trustee or a corporation controlled
by the trustee other than as a fiduciary, an attorney, or an agent.
(3) "Beneficiary" has the meaning set forth in IC 30-2-14-2.
(4) "Breach of trust" means a violation by the trustee of any duty
which is owed to the settlor or beneficiary.
(5) "Charitable trust" means a trust in which all the beneficiaries
are the general public or organizations, including trusts,
corporations, and associations, and that is organized and operated
wholly for religious, charitable, scientific, public safety testing,
literary, or educational purposes. The term does not include
charitable remainder trusts, charitable lead trusts, pooled income
funds, or any other form of split-interest charitable trust that has
at least one (1) noncharitable beneficiary.
(6) "Court" means a court having jurisdiction over trust matters.
(7) "Income", except as otherwise stated in a trust agreement, has
the meaning set forth in IC 30-2-14-4.
(8) "Income beneficiary" has the meaning set forth in
IC 30-2-14-5.
(9) "Inventory value" means the cost of property to the settlor or
the trustee at the time of acquisition or the market value of the
property at the time it is delivered to the trustee, or the value of
the property as finally determined for purposes of an estate or
inheritance tax.
(10) "Minor" means any person under the age of eighteen (18)
years.
(11) "Person" has the meaning set forth in IC 30-2-14-9.
(12) "Personal representative" means an executor or administrator
of a decedent's or absentee's estate, guardian of the person or
estate, guardian ad litem or other court appointed representative,
next friend, parent or custodian of a minor, attorney in fact, or
custodian of an incapacitated person (as defined in
IC 29-3-1-7.5).
(13) "Principal" has the meaning set forth in IC 30-2-14-10.
(14) "Qualified beneficiary" means:
(A) a beneficiary who, on the date the beneficiary's
qualification is determined:
(i) is a distributee or permissible distributee of trust income
or principal;
(ii) would be a distributee or permissible distributee of trust
income or principal if the interest of the distributee
described in item (i) terminated on that date;
(iii) would be a distributee or permissible distributee of trust
income or principal if the trust terminated on that date;
(iv) has sent the trustee a request for notice;
(v) is a charitable organization expressly designated to
receive distributions under the terms of a charitable trust;
(vi) is a person appointed to enforce a trust for the care of an
animal under IC 30-4-2-18; or
(vii) is a person appointed to enforce a trust for a
noncharitable purpose under IC 30-4-2-19; or
(B) the attorney general, if the trust is a charitable trust having
its principal place of administration in Indiana.
(15) "Remainderman" means a beneficiary entitled to principal,
including income which has been accumulated and added to the
principal.
(16) "Settlor" means a person who establishes a trust including
the testator of a will under which a trust is created.
(17) "Trust estate" means the trust property and the income
derived from its use.
(18) "Trust for a benevolent public purpose" means a charitable
trust (as defined in subdivision (5)), a split-interest trust (as
defined in Section 4947 of the Internal Revenue Code), a
perpetual care fund or an endowment care fund established
under IC 23-14-48-2, a prepaid funeral plan or funeral trust
established under IC 30-2-9, a funeral trust established under
IC 30-2-10, a trust or an escrow account created from
payments of funeral, burial services, or merchandise in
advance of need described in IC 30-2-13, and any other form of
split-interest charitable trust that has both charitable and
noncharitable beneficiaries, including but not limited to charitable
remainder trusts, charitable lead trusts, and charitable pooled
income funds.
(19) "Trust property" means property either placed in trust or
purchased or otherwise acquired by the trustee for the trust
regardless of whether the trust property is titled in the name of the
trustee or the name of the trust.
(20) "Trustee" has the meaning set forth in IC 30-2-14-13.
SOURCE: IC 30-4-3.5-1; (08)HE1026.1.14. -->
SECTION 14. IC 30-4-3.5-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 1. (a) Except as
otherwise provided in subsection (b), a trustee who invests and
manages trust assets owes a duty to the beneficiaries of the trust to
comply with the prudent investor rule set forth in this chapter.
(b) The prudent investor rule, a default rule, may be expanded,
restricted, eliminated, or otherwise altered by the provisions of a trust.
A trustee is not liable to a beneficiary to the extent that the trustee
acted in reasonable reliance on the provision of the trust.
(c) This chapter applies to a trustee or escrow agent, acting as
fiduciary, of:
(1) a perpetual care fund or an endowment care fund
established under IC 23-14-48-2;
(2) a prepaid funeral plan or funeral trust established under
IC 30-2-9;
(3) a funeral trust established under IC 30-2-10; or
(4) a trust or escrow account created from payments of
funeral, burial services, or merchandise in advance of need, as
described in IC 30-2-13.
SOURCE: IC 30-4-5.5-1; (08)HE1026.1.15. -->
SECTION 15. IC 30-4-5.5-1, AS ADDED BY P.L.245-2005,
SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2008]: Sec. 1. (a) This section applies if to the following:
(1) A trustee of a benevolent trust, does any of the following:
including a perpetual care fund or endowment care fund
established under IC 23-14-48 or a prepaid funeral trust or
escrow account established under IC 30-2-9, IC 30-2-10, or
IC 30-2-13.
(2) A cemetery owner.
(3) A funeral home.
(4) A beneficiary of a contract entered into under IC 30-2-9.
(5) A seller (as defined in IC 30-2-13-10) under IC 30-2-13.
(6) Any other person that holds a perpetual care fund, an
endowment care fund, or a prepaid funeral trust fund.
(b) A person described in subsection (a) may not do any of the
following:
(1) Commits Commit a breach of trust.
(2) Violates Violate the mandate of a charitable trust.
(3) Violates Violate a duty listed in this article.
(4) Fail to comply with a requirement or prohibition set forth
in any of the following:
(A) IC 23-14-48.
(B) IC 23-14-48.5.
(C) IC 23-14-49.
(D) IC 23-14-51.
(E) IC 30-2-9.
(F) IC 30-2-10.
(G) IC 30-2-13.
(H) IC 30-4.
(b) (c) The attorney general may petition a court to issue one (1) or
more of the following remedies for an action a breach, violation, or
failure enumerated in subsection (a): (b):
(1) Injunctive relief.
(2) Appointment of temporary or permanent receivers.
(3) Permanent removal of trustees.
(4) Appointment of permanent replacement trustees subject to
court approval.
A remedy under this subsection is in addition to any other remedy.
(c) (d) The attorney general may seek a remedy listed in subsection
(b) (c) against a trustee, or a trust, or any other person described in
subsection (a) for a breach, violation, or failure enumerated in
subsection (b).
(e) A court in which an action is brought under this section may
do the following:
(1) Issue a temporary restraining order, preliminary
injunction, or permanent injunction.
(2) Order a trustee, an escrow agent, a seller (as defined in
IC 30-2-13-10), a cemetery owner, or a funeral home to pay
restitution or money unlawfully received or retained from
purchasers and deposit the restitution or money into an
escrow account for distribution to aggrieved purchasers.
(3) Order a trustee, an escrow agent, a seller (as defined in
IC 30-2-13-10), a cemetery owner, or a funeral home to
reimburse the state for reasonable costs incurred by the
attorney general in investigating and prosecuting a violation
of this section.
(4) Impose civil penalties.
(5) Provide for the appointment of a receiver.
SOURCE: ; (08)HE1026.1.16. -->
SECTION 16. [EFFECTIVE UPON PASSAGE] (a) The state
board of funeral and cemetery service established by IC 25-15-9-1
shall adopt rules under IC 4-22-2 to implement:
(1) IC 30-2-9-7(c);
(2) IC 30-2-10-9(c); and
(3) IC 30-2-13-38(e);
all as added by this act, before January 1, 2009.
(b) This SECTION expires January 2, 2009.
SOURCE: ; (08)HE1026.1.17. -->
SECTION 17. [EFFECTIVE UPON PASSAGE] (a) As used in this
SECTION, "commission" refers to the probate code study
commission established by IC 2-5-16-2.
(b) The commission shall study and make findings and
recommendations concerning the following:
(1) Whether current law is adequate to:
(A) protect money and property placed in cemetery
perpetual care trusts and preneed funeral trusts; and
(B) ensure that the money is used for its intended purposes.
(2) Whether additional restrictions, prohibitions, or rules are
needed concerning cemetery perpetual care trusts and
preneed funeral trusts to sufficiently protect consumers and
the general public.
(3) Whether it is appropriate to revise Indiana law concerning
funeral and cemetery trusts.
(4) Approaches used by other states to regulate funeral and
cemetery trusts, trustees, funeral service and merchandise
sellers, funeral home owners and operators, and cemetery
owners.
(5) Any other matter concerning funeral and cemetery trusts
the commission considers appropriate.
(c) The commission shall report its finding and
recommendations to the legislative council in an electronic format
under IC 5-14-6 not later than November 1, 2008.
(d) This SECTION expires November 2, 2008.
SOURCE: ; (08)HE1026.1.18. -->
SECTION 18.
An emergency is declared for this act.
HEA 1026 _ Concur
Figure
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