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§ 1275. Requirements of Preneed Trust Agreements.

16 CA ADC § 1275Barclays Official California Code of RegulationsEffective: February 9, 2023

Barclays California Code of Regulations
Title 16. Professional and Vocational Regulations
Division 12. Cemetery and Funeral Bureau (Refs & Annos)
Article 8. Preneed Funds and Disclosure of Preneed Agreements
Effective: February 9, 2023
16 CCR § 1275
§ 1275. Requirements of Preneed Trust Agreements.
Currentness
A preneed trust contract within the meaning of Article 9, Chapter 12, Division 3, of the Business and Professions Code shall include but not be limited to the following information:
(a) The name and address of the trustor.
(b) The name and address of the beneficiary.
(c) The names and addresses of the trustees.
(d) The name, address, and phone number of the funeral establishment.
(e) A sequential number which shall be continuous and in order of issue.
(f) A copy of the completed funeral arrangements forms including, but not limited to, the following:
(1) A description of the merchandise and services selected which is sufficiently detailed to identify them; and
(2) Any disclosure of prices or itemization of services or merchandise, which is required to be provided pursuant to State or Federal law, rule, or regulation then in effect.
(g) A statement that earned annual income is being credited to the account and that administrative expenses, if charged, are paid from income only.
(h) A statement, in clear nontechnical language, that the contract is either a guaranteed preneed contract or that it is a nonguaranteed preneed contract, and, if guaranteed only in part, the services or merchandise included in the guarantee shall be specified. This statement shall be printed in bold face type and shall be located on the first page of the contract.
(1) If the contract is guaranteed, there shall be included in the contract a complete explanation of all the terms and conditions limiting the guarantee.
(2) If the contract is not guaranteed, there shall be included in the contract a complete explanation of how the trust balance will be applied to pay for services and merchandise provided at the beneficiary's death and that there may be additional payments required or a refund due.
(i) A statement that the trustees of the trust will deliver the corpus of the trust and net income to the funeral establishment filing a certified copy of the Death Certificate and evidence that said funeral establishment has furnished the merchandise and services. (Corpus of the Trust means all monies paid and all securities delivered pursuant to this prearrangement contract.)
(j) A statement that the amount of revocation fee to be charged in the event of revocation, shall in no event exceed ten percent (10%) of the paid-in corpus and is chargeable against earned income only; and a statement that no revocation fee may be charged if the funeral establishment is unable to perform substantially according to the terms of the agreement.
(k) In immediate proximity to the space reserved for the purchaser's signature, in a size equal to at least ten point (10-point) bold type, the following statement: “All funds received will be deposited with the trustees within thirty (30) days and held in a trust which is fully refundable upon fifteen (15) days' written notice except when the beneficiary is the recipient of public assistance, as provided in the Welfare and Institutions Code and this trust agreement has been designated as being irrevocable thereunder.”

Credits

Note: Authority cited: Sections 7606 and 7740, Business and Professions Code. Reference: Sections 7735, 7736, 7737, 7738, 7740 and 7740.5, Business and Professions Code.
History
1. New section filed 6-17-77; effective thirtieth day thereafter (Register 77, No. 25).
2. Amendment filed 7-3-86; effective thirtieth day thereafter (Register 86, No. 27).
3. Amendment of subsections (h) and (i) filed 1-12-90; operative 2-11-90 (Register 90, No. 3).
4. Change without regulatory effect amending section heading, first paragraph, and subsections (i) and (j) filed 4-15-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 16).
5. Amendment of subsections (d), (f)(2) and (h) filed 2-9-2023; operative 2-9-2023 pursuant to Government Code section 11343.4(b)(3) (Register 2023, No. 6).
This database is current through 4/19/24 Register 2024, No. 16.
Cal. Admin. Code tit. 16, § 1275, 16 CA ADC § 1275
End of Document