100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB3485

 

Introduced , by Rep. Daniel V. Beiser

 

SYNOPSIS AS INTRODUCED:
 
225 ILCS 45/4a

    Amends the Illinois Funeral or Burial Funds Act. Provides that, in the event a trust is used to fund a pre-need contract, the trustee of the trust shall issue a statement regarding the trust's performance to the beneficiary each month. Provides that the statement shall include the rate of interest, interest earned, net and liquid value, original principal investment, and any fees assessed by the banking or investment institution where the trust is held.


LRB100 07811 SMS 17878 b

 

 

A BILL FOR

 

HB3485LRB100 07811 SMS 17878 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Funeral or Burial Funds Act is
5amended by changing Section 4a as follows:
 
6    (225 ILCS 45/4a)
7    Sec. 4a. Investment of funds.
8    (a) A trustee has a duty to invest and manage the trust
9assets pursuant to the Prudent Investor Rule under the Trusts
10and Trustees Act.
11    (b) The trust shall be a single-purpose trust fund. In the
12event of the seller's bankruptcy, insolvency or assignment for
13the benefit of creditors, or an adverse judgment, the trust
14funds shall not be available to any creditor as assets of the
15seller or to pay any expenses of any bankruptcy or similar
16proceeding, but shall be distributed to the purchasers or
17managed for their benefit by the trustee holding the funds.
18Except in an action by the Comptroller to revoke a license
19issued pursuant to this Act and for creation of a receivership
20as provided in this Act, the trust shall not be subject to
21judgment, execution, garnishment, attachment, or other seizure
22by process in bankruptcy or otherwise, nor to sale, pledge,
23mortgage, or other alienation, and shall not be assignable

 

 

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1except as approved by the Comptroller. The changes made by
2Public Act 91-7 are intended to clarify existing law regarding
3the inability of licensees to pledge the trust.
4    (c) Because it is not known at the time of deposit or at
5the time that income is earned on the trust account to whom the
6principal and the accumulated earnings will be distributed for
7the purpose of determining the Illinois income tax due on these
8trust funds, the principal and any accrued earnings or losses
9related to each individual account shall be held in suspense
10until the final determination is made as to whom the account
11shall be paid. The beneficiary's estate shall not be
12responsible for any funeral and burial purchases listed in a
13pre-need contract if the pre-need contract is entered into on a
14guaranteed price basis.
15    If a pre-need contract is not a guaranteed price contract,
16then to the extent the proceeds of a non-guaranteed price
17pre-need contract cover the funeral and burial expenses for the
18beneficiary, no claim may be made against the estate of the
19beneficiary. A claim may be made against the beneficiary's
20estate if the charges for the funeral services and merchandise
21at the time of use exceed the amount of the amount in trust
22plus the percentage of the sale proceeds initially retained by
23the seller or the face value of the life insurance policy or
24tax-deferred annuity.
25    (d) The trustee of the trust shall issue a statement
26regarding the trust's performance to the beneficiary each

 

 

HB3485- 3 -LRB100 07811 SMS 17878 b

1month. The statement shall include the rate of interest,
2interest earned, net and liquid value, original principal
3investment, and any fees assessed by the banking or investment
4institution where the trust is held.
5(Source: P.A. 96-879, eff. 2-2-10.)