MCL 456.536 Irrevocable Endowment and Perpetual Care Trust Fund; Establishment and Maintenance; Commingling Prohibited; Annual Report; Application For Modification Or Waiver; Expenses; Bundling of Funds With Common Ownership; Pooling of Trust Or Escrow Funds For Investment Purposes; Agreement With Regulated Financial Institutions With Trust Powers; Deposits; Agent Or Seller; Deposit Requirements; Use of Interest Or Income; Merchandise Trust Account; Deposit For Sale of Burial Vaults Or Containers; Repayment; Installation of Vault; Contents of Cemetery Merchandise and Services Contract; Annual Reports; Deficit In Amount of Required Deposits; Penalty; Hearing; Additional Penalty; Powers and Jurisdiction of Attorney General and Courts; Disposition of Fees, Charges, and Penalties; Notice of Financial Transaction Or Investment; Failure to Submit Reports Under Subsections (12) and (13); Civil Actions

• Library: Michigan Statutes
• Edition: 2023
• Currency: Current through Public Act 321 of the 2023 Legislative Session
• Year: 2023
• Citation: MCL 456.536

(1) The commissioner shall require each cemetery to establish and maintain an irrevocable endowment and perpetual care trust fund. The amounts deposited into an endowment and perpetual care trust fund pursuant to subsection (5) shall be held in perpetuity by the trustee and may only be distributed to the cemetery upon order of a court following petition by the commissioner. Interest or income shall be used only for endowment care. Except as otherwise provided in subsection (2), money in the endowment and perpetual care trust fund shall not be commingled with any other money or trust accounts. The cemetery shall report annually before July 1 of each year, on forms approved and furnished by the commissioner, endowment and perpetual care trust fund information required to be reported to the commissioner by other statutes and information regarding the funds as the commissioner considers pertinent in the public interest. A cemetery applying to the commissioner as authorized by other statutes for an endowment and perpetual care trust fund deposit modification or waiver shall be assessed the actual expenses for an examination or investigation by the commissioner.

(2) Notwithstanding subsection (1), bundling of funds held in trust or escrow, for each cemetery or among cemeteries with common ownership, is permissible only under the following circumstances:

(a) Each cemetery maintains separate trust and escrow account records pursuant to statutory and rule requirements for endowed care, merchandise, or prepaid funeral and cemetery sales.

(b) A cemetery, or cemeteries with common ownership, has all its trust or escrow accounts on deposit with 1 or more regulated financial institutions with trust powers in this state.

(c) The trustee, or the trustee's trading block nominee, holds title in the name of each individual trust or escrow account for that trust or escrow account assets and the assets are promptly settled back to the individual accounts by the trustee in the ordinary course of business.

(3) Notwithstanding subsection (2), other comparable methods of bundling or pooling of trust or escrow funds for investment purposes may be permissible upon terms and conditions approved in writing by the commissioner and only after the commissioner is reasonably satisfied that the title to, character of, and accounting for funds held in trust or escrow is preserved.

(4) Not later than January 1, 2010, the irrevocable endowment and perpetual care trust fund shall be established, or reestablished, with 1 or more regulated financial institutions with trust powers that shall be the trustee of the portion of the fund allocated to it. The cemetery shall enter into agreements of irrevocable trust agreements with each trustee. Those agreements shall provide that the investing of the assets are subject to the Michigan prudent investor rule as set forth in sections 1501 to 1512 and 7803 of the estates and protected individuals code, 1998 PA 386, MCL 700.1501 to 700.1512 and 700.7803, except that the agreement shall not be modified or amended, as allowed under sections 1502(2) and 7105 of the estates and protected individuals code, 1998 PA 386, MCL 700.1502 and 700.7105, to provide less than the standard of care in the prudent investor rule. The cemetery shall notify the commissioner, in writing, not later than 14 days before the effective date of an appointment of a trustee. The cemetery may remove and replace a trustee at any time, subject to the consent of the commissioner, and subject to the terms of the cemetery's agreement with the trustee. The fees and costs of the trustee may, in accordance with the terms of the trust agreement, be paid from the principal of the trust. A cemetery that establishes its irrevocable endowment and perpetual care trust with 1 or more regulated financial institutions with trust powers, and that does not reserve, retain, or otherwise exercise any power of direction of specific investments, is not liable for any deficiencies in the irrevocable endowment and perpetual care trust caused by performance of the investments. A cemetery may reserve the right to recommend, to a trustee, an investment advisor, registered with the securities and exchange commission under the investment advisers act of 1940, 15 USC 80b-1 to 80b-21, or under the uniform securities act (2002), 2008 PA 551, MCL 451.2101 to 451.2703, to advise the trustee in the trustee's decisions on asset allocation, investment managers, and investments, except that a trustee is not required to heed such advice. Alternatively, and notwithstanding any other provisions of this section, and at all times subject to the Michigan prudent investor rule, a cemetery may direct the trustees to make certain investments, provided that the trust is a named beneficiary of fiduciary liability insurance covering the cemetery's or other fiduciaries' actions in an amount equal to 100% of the amount so directed. Proof of the fiduciary liability coverage shall be provided not less than annually to the commissioner, in a form to be determined by the commissioner...