The Plight of Cemetery Care Funds: Who’s to Blame?

The care fund trust is a source of frustration for most cemetery operators.  Rather than offsetting maintenance expenses, the care fund is a state-mandated money pit.  A percentage of grave sales must be deposited to trust with little or no income being paid back to the cemetery by the trustee.  For the average-sized care fund, consumer deposits are being eaten away by expenses and taxes.

Five years ago, I posted “Cemetery Care Master Trusts: A Need for Economies of Scale” and only one bank client has since responded.  That bank client now has a blossoming master care trust that makes monthly care fund distributions without sacrificing the care fund growth.  What is personally frustrating is that recent care fund transfers have come from banks that are also a client.  These transfers have ranged in value from $100,000 to $900,000.  Only the very largest had received a distribution of any kind in recent years.  The smallest accounts had expenses that exceeded income and therefore the cemetery had gone a few years with a distribution. 

So if the local cemetery’s grass does not get cut this summer, who is to blame?  The cemetery operator, the state regulator, the care fund trustee, the outside fund manager, or a cemetery association?  In the next posts, we will examine the accountability of these various parties for the inefficiencies of care fund administration.