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.

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.