Below is a list of questions and responses that we commonly receive regarding pre-paid funeral trusts. We will continue to include any new questions in this section that we feel would be helpful to others.
If you have a question that has not been covered in this site we would like to hear from you. You may contact us anytime.
If you would prefer to call us, our staff would be pleased to provide an answer to any funeral related matter you may have. Our number is (845) 338-1200.
|Who is the Escrow Agent or Trustee?|
|First State Trust Company (formerly Citigroup Institutional Trust) with Citigroup serving as Trustee to funds placed in the Cooperative Funeral Fund (CFF) Inc. system. Citigroup is a significant owner of Morgan Stanley Smith Barney, the largest investment brokerage firm in the world, which has trust powers and locations in all 50 states.|
|What is the difference between Escrow Agent and Trustee?|
|Certain state laws use the language “Escrow” while others “Trust” for pre-arrangement contracts. For our purposes, both are treated the same. An escrow account is a deposit or fund held in trust or as a security. A trustee is responsible for holding and dispersing the funds.|
|Who is the investment advisor?|
|Cooperative Funeral Fund (CFF) Inc. |
74 Boston Post Rd.
Madison CT, 06443
(800) 336-1102 Phone
(800) 340-0000 Fax
|What is the investment advisor’s role?|
|Cooperative Funeral Fund directs the Escrow Agent/Trustee to purchase United States Treasury Bonds that are backed by the full faith and credit of the United States. These bonds are purchased through Morgan Stanley Smith Barney at the direction of Cooperative Funeral Fund’s President Mark Mannix, who is registered with the SEC, Securities and Exchange Commission.|
|How can I check on the money balances? Who do I call?|
|Cooperative Funeral Fund is responsible for accounting and claim information. Please contact them at (800) 336-1102|
|Who invests, administers and maintains the funds? How are the US Treasury bonds purchased? What is the company’s contact information?|
|Cooperative Funeral Fund (CFF) Inc. directs First State Trust Company (formerly Citigroup Institutional Trust Company) to purchase certain US Treasury Bonds which are predetermined during meetings between Mark Mannix, CFF’s President, and individuals at Morgan Stanley Smith Barney. First State Trust maintains all Treasury Bonds in the trust account. As plan Administrator, CFF manages all of the sub-accounting for funeral homes and individual accounts. Cooperative Funeral Fund (CFF) Inc. is the investment advisor. CFF also administers and maintains the funds.|
Cooperative Funeral Fund (CFF) Inc.
74 Boston Post Rd.
Madison CT, 06443
(800) 336-1102 Phone
(800) 340-0000 Fax
|How will I know that the funds have been deposited by the funeral home? |
|When the funeral home sends your money to Cooperative Funeral Fund, Inc (CFF), CFF in turn sends a letter notifying you and the funeral home of the funds deposit and account activation. You will receive this notification within 7-10 business days. CFF will then send you an annual tax document regarding interest on the account.|
|Are there tax issues with the trust?|
|Yes, taxes are due on income generated from the interest earned on the trust account. The IRS has determined that these trust funds are yours until the funeral home provides the funeral services and merchandise selected. Because you are the beneficiary, you are responsible for any taxes due on the income earned on your trust. Cooperative Funeral Fund, Inc. will prepare and send you all of the necessary tax forms required by the IRS. Each January you will receive an IRS form 1041 Schedule K-1 from the trust administrators. The K-1 will reflect the amount of interest your trust has earned during the previous year. If your income requires you to file a return with the Internal Revenue Service, you should include this income on your return. However, many of our clients are not in an income bracket that necessitates paying taxes. |
* If you select to make your trust “Irrevocable” that only means that the funds can only be released from the trust to pay for your funeral. It does not affect your taxation status.
|Can I cancel a revocable funeral service contract? If so, what are the repercussions?|
|Yes. A revocable account can be canceled or transferred at any time. The funeral home has an optional administrative fee that varies by state.|
|Is the money placed in the trust secure?|
|Absolutely. All funds placed in the trust are invested in financial instruments, which are guaranteed by the Federal Deposit Insurance Corporation (FDIC) or directly by the United States Government (U.S. Treasury Bonds).|
|Where are the funds deposited?|
|The money you give to the funeral home is placed in a depository account at either Bank of America. Under the direction of the Trust Officer, the funds are periodically swept into First State Trust Company with Citigroup as co-trustee. Cooperative Funeral Fund, inc (CFF) is responsible for accounting and claims and will provide you with an annual statement of your accounts earnings. You may contact them at any time for your account balance.|
|What if the funeral home goes out of business?|
|Your funds are placed in a trust in your name and are not considered assets of the funeral home. In the very unlikely event that our firm closes, you would be notified by Cooperative Funeral Fund, inc. (CFF) and asked to appoint another funeral home to carry out your wishes. However, our funeral home has a long-standing reputation and is committed to continuing to serve the many families who have placed their trust in us.|
|What if I move?|
|Your funeral plan can be transferred at any time if you should move. We can even recommend a reputable funeral home in your new community. Through prearrangement, you can be confident your wishes will be fulfilled wherever you may live.|
|What if I die away from home?|
|Is you are traveling or visiting another city when death occurs, your survivors should contact our funeral home immediately. We will make the necessary arrangements with a funeral home in that location to assist with transfer.|
|What if I change my mind?|
|Our funeral home is established upon service to families. We respect your wishes at all times and work hard to meet the special needs and requests from you and your family, both when planning ahead and at time of your need. Together we can develop plans to meet your current needs.|
|Is there a “right to rescind” clause?|
|Yes, if you cancel the agreement prior to the expiration of this time period (3 days after signing contract) you will receive a full refund. After this time period, you may still cancel your account but there may be an administration fee deducted from your funds. This fee is a small percentage of the trust amount and varies by state. Conversely, after the 3-day window, an Irrevocable Pre-Need Arrangement may not be cancelled. However, it may be transferred to another funeral service establishment should you care to do so. This may be desirable should you move from one area of the country to another. A transfer may void any guarantees you secured from the originating funeral director.|
|What should I do with the funeral contract?|
|Keep your funeral contract with your will in a place where others can easily find it after your death. If you go into the hospital or a nursing home, tell them the name of your funeral home and the location of the funeral contract.|
|What is the difference between a Guaranteed Agreement and a Non-Guaranteed Agreement?|
|There is a significant difference. Please see the following explanation.|
1. A Guaranteed Agreement assures the purchaser that he or she will not have to pay any more money after paying the specified price no matter when the funeral services and merchandise may be required. Interest earned on the trust account does go to the funeral home to offset any impact inflation may have on their costs. It should be noted that cash advances will not be guaranteed.
2. A Non-Guaranteed Agreement is one whereby the purchaser pays the specified price at the time of the pre-arrangement. The funds are deposited into the trust. At the time of the funeral, the funeral director uses the current FTC price list to determine the cost, and presents a bill against the trust account. If the original deposit in the trust plus all accrued interest is insufficient to cover the bill, the person responsible for the funeral arrangements must pay the difference or adjust the funeral services and merchandise.
|Can I withdraw the interest? And if so what are the ramifications? |
|1. If the contract is Irrevocable there can be no withdrawal of funds.|
2. If the contract were both Revocable and Guaranteed, a withdrawal would void any guaranties.
3. If the contract is Revocable and Non-Guaranteed, a withdrawal is possible. However, there may not be sufficient funds in the account at the time of the funeral.