Title 5 Banking
3400 Preneed Funeral Contracts
3401 Regulations Governing Revocable and Irrevocable Trust Agreements
5 Del.C. §§3404 and 3409
Formerly Regulation No.: 5.3404/3409.0001
Effective Date: November 12, 1999
1.0 Annual Statements
1.1 At least once, annually, a licensee shall mail or deliver, to each party for whom such licensee holds a preneed funeral contract, a statement containing, at a minimum, the following information:
1.1.1 the previous balance in the trust account or the beginning balance for the statement period;
1.1.2 the number and amounts of payments received for the statement period;
1.1.3 the amount of accrued interest for the statement period;
1.1.4 the “ending” or total account balance for the statement period; and
1.1.5 the name and address of the financial institutions where the trust deposit is held.
2.0 Disclosure Requirements for the Irrevocable Trust Document
2.1 The trust document establishing the irrevocable trust permitted by Section 3404 of Title 5 of the Delaware Code shall contain, at a minimum, the following mandatory provisions:
2.1.1 A provision which expressly identifies the trust as irrevocable for the lifetime of the beneficiary;
2.1.2 A provision for the disposition of trust funds to an alternate trustee upon discontinuation of business or inability to provide goods or services by the original trustee in accordance with the terms of the trust or a provision for the transfer of trust funds, to a new trustee, at the consumer's election;
2.1.3 A provision that in the event funds paid into the trust are inadequate, at the time of the death of the beneficiary, to cover anticipated funeral expenses, the trustee shall contribute all trust funds toward payment of the actual funeral expenses for the funeral of the beneficiary;
2.1.4 A provision that in the event the sum held by the trust exceeds the total actual costs of the goods and services for the funeral of the beneficiary, the excess funds shall be paid to the estate of the beneficiary;
2.1.5 A provision that the trustee may, from time to time, accept periodic monetary contributions to the trust, provided that the principal sum contributed, exclusive of interest earned, shall not exceed $10,000;
2.1.6 A provision which shall state “In no event shall the principal amount of the trust exceed $10,000 plus interest.”
2 DE Reg. 295 (8/1/98)
3 DE Reg. 653 (11/1/99)
