April 12, 2005, Edition - Volume 6 - No. 10


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ICFA WIRELESS is a biweekly electronic newsletter bringing members of the International Cemetery and Funeral Association the latest government and legal, industry and association news. It is available to all ICFA members current on their dues. Comments, questions and "hot news tips" are welcome. Write to: wireless@icfa.org.

INDUSTRY NEWS

US. Treasury Discusses Preneed Funeral Trusts (Form 1040 QFT)

State Administrators of Abandoned Property to Discuss Preneed Funeral Accounts

FTC Releases Annual Review; Favors More Competition Among Funeral Homes


ICFA NEWS

ICFA Convention & Exposition Draws Rave Reviews

ICFA Elects New Officers, Directors

ICFAU Registrations Limited to 35 Per College


U.S. Treasury Discusses Preneed Funeral Trusts (Form 1040 QFT)
In response to an inquiry by Sen. Richard G. Lugar (R-IN), the U.S. Department of the Treasury discussed whether the dollar cap, currently $8,000, on purchasers' contributions to a certain type of preneed funeral trust, called QFT, should be raised, and whether the 1997 provision creating "Qualified Funeral Trusts" (QFTs) actually increased tax revenues as had been estimated. Funeral trusts designated as QFT elect to have the trustee pay income tax liability for earnings from the trust rather than the tax being paid by the purchaser. IRS data for 2002, the most recent year that complete figures are available, indicate that 3.5 million taxpayers have established QFTs.

The Treasury also stated that based on the 2002 data, the tax liability on QFTs amounted to $9.1 million on income generated by assets held in trust. However, Treasury stated that it was not possible to determine whether tax revenue had increased from earlier years because there are no statistics tracking pre-1997 tax liability on funeral trusts specifically. Finally, Treasury held that the $8,000 cap on QFTs seems to parallel the average cost of a funeral and burial in the United States ($6,500 for the funeral and the balance for the cemetery) or the average cost was only modestly above the $8,000 cap. Curiously, the Treasury failed to answer Sen. Lugar's inquiry regarding whether or not the Administration believes the $8,000 cap should be raised.


State Administrators of Abandoned Property to Discuss Preneed Funeral Accounts
The National Association of Unclaimed Property Administrators has scheduled an open forum for discussing preneed funeral plans during its May 3 meeting in Clear Point, Alabama. States have become increasingly aggressive in claiming trust accounts on the basis that they are "abandoned" when in fact the accounts are awaiting the death of the contract beneficiary in order to trigger withdrawal of the funds. Since preneed accounts are often difficult to identify as such, inappropriate escheatment to the state may occur on some of these accounts.

The consequences of inappropriate escheatment include the funds being unavailable at the time of need, the difficulty in restoring property to the service provider and lost investment earnings while the funds are held by the state. The ICFA has notified the NAUPA of its intention to send a representative to participate in discussions at the May meeting. Updates will be provided to ICFA members as developments occur. For more information regarding the meeting, check the NAUPA Web page at www.nast.net/NAUPA/southern05-program.htm.


FTC Releases Annual Review; Favors More Competition Among Funeral Homes
Last week, the Federal Trade Commission published its annual review highlighting its consumer protection and business regulation activities for the previous year. Titled, "The FTC in 2005: Standing Up for Consumers and Competition," the 46-page report detailed the Commission's various projects, including merger review, credit reporting and identity theft, global competition issues, the telemarketing do-not-call registry, attacking spam and spyware, among many other subjects. The funeral profession is mentioned only once, when FTC staff addressed the issue of corporations owning funeral homes in addition to individual licensed funeral directors.

The report noted that in April 2004, FTC staff commented on a bill in Maryland that would have permitted the corporate ownership of funeral homes. Staff concluded that "the bill would permit easier entry into the funeral home business, thereby increasing competition and potentially offering consumers lower prices and better quality for funeral home services." To date, the bill has not been passed by the Maryland legislature. The ICFA Wireless reported on the FTC letter in its April 13, 2004, edition. The letter can be viewed on the FTC Web page at www.ftc.gov/os/2004/04/0404mdfuneralhomes.pdf.

• Wow! This has been so informative - so many vendors! I'm learning how much I don't know!
• Glenn [Gould] provided us a $10,000 value presentation for the price of the convention. If you missed it, it will cost you money.
• [Dan] Morris was engaging and very informative. I feel energized about the future and what we can do to grow.
• [Doug Gober's presentation] keeps pushing us to change our assumptions.
• First time - very educational and informative, learned many new facts and met key people.
• Wonderful location, speakers, exhibits, food and even the weather!

• President - Ray Frew, CCFE, Green Hills Memorial Park, Rancho Palos Verdes, California;
• President-Elect - Thomas G. Roberts, CCE, Allegheny Cemetery, Pittsburgh, Pennsylvania;
• Vice President, Industry Relations Steering Committee - Gregg Williamson, CCE, Rose Hills Memorial Park & Mortuary, Whittier, California;
• Vice President, Products and Services Steering Committee - Paul Elvig, Evergreen-Washelli Memorial Park and Funeral Home, Seattle, Washington;
• Vice President, Education Steering Committee - Mark Krause, CFuE, Krause Funeral Home & Cremation Services, Milwaukee, Wisconsin;
• Vice President, Membership Steering Committee - Kevin R. Daniels, CCE, The Daniels Company LLC, Rio Rancho, New Mexico;
• Treasurer - Kenneth E. Varner, Cypress Lawn Cemetery, Colma, California; and
• Secretary - Cindy Thompson, CCFE, Mountain View Funeral Home and Memorial Park, Tacoma, Washington.

• Barry Berlin, Hillside Memorial Park and Mortuary, Los Angeles, California;
• Darin Drabing, Forest Lawn Memorial Parks and Mortuaries, Southern California;
• Nancy Faaberg Hansen, Evergreen-Washelli Memorial Park and Funeral Home, Seattle, Washington;
• Michael L. Hays, Keystone Group Holdings, Tampa, Florida;
• Herbert B. Klapper, Cedar Park and Fidelity Cemetery Association, Bergen County, New Jersey;
• I. Frederick Lappin, Knollwood Cemetery Corporation, Sharon, Massachusetts;
• David H. Quiring, CM, FAICA, Quiring Monuments Inc., Seattle, Washington; and
• Thomas E. Weaver Jr., CCE, Service Corporation International, Edmonds, Washington.

• Andrew J. Gauntley, Alderwoods Group, British Columbia, Canada.

• Daniel E. Reed, CCE, Daniel E. Reed and Associates, Cape Fair, Missouri;
• Samuel B. Saxton, CCE, Cedar Hill Memorial Park, Allentown, Pennsylvania; and
• Richard T. Sells, CCE, Service Corporation International, San Diego, California.

• J.D. Ingram, Ingram Construction Company, Madison, Mississippi.

• Cemetery Administration & Management;
• Cremation Services;
• Funeral Home Management;
• Land Management & Grounds Operations; and
• Sales & Marketing.