I

104TH CONGRESS

1ST SESSION H. R. 1729

To amend the Internal Revenue Code of 1986 to provide that providers

rather than purchasers of funeral services shall be treated as the owners

of certain pre-need funeral trusts.

IN THE HOUSE OF REPRESENTATIVES

MAY 25, 1995

Mrs. MINK of Hawaii introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide

that providers rather than purchasers of funeral services

shall be treated as the owners of certain pre-need funeral

trusts.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. TREATMENT OF FUNERAL SERVICE PROVIDER

4 RATHER THAN PURCHASER AS OWNER OF

5 CERTAIN PRE-NEED FUNERAL TRUSTS.

6 (a) IN GENERAL.—Section 672 of the Internal Reve7 nue Code of 1986 (relating to definitions and rules) is
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1 amended by adding at the end the following new sub2 section:

3 ‘‘(g) SPECIAL RULE FOR CERTAIN PRE-NEED FU4 NERAL TRUSTS.—

5 ‘‘(1) IN GENERAL.—Notwithstanding any other

6 provision of this title, if—

7 ‘‘(A) any individual would (but for this

8 subsection) be treated under this subpart as the

9 owner of any portion of a trust, and

10 ‘‘(B) such trust is a qualified pre-need fu11 neral trust,

12 the provider of funeral services referred to in para13 graph (3)(B) (and not such individual) shall be

14 treated as the owner of such portion.

15 ‘‘(2) EXCEPTION IF INCOME DISTRIBUTED TO

16 PURCHASER.—Paragraph (1) shall not apply with

17 respect to any income which is distributed to the in18 dividual described in paragraph (1)(A).

19 ‘‘(3) QUALIFIED PRE-NEED FUNERAL TRUST.—

20 For purposes of this subsection, the term ‘qualified

21 pre-need funeral trust’ means a trust established ex22 clusively to pay for the funeral (and associated

23 costs) of one individual if—

24 ‘‘(A) such individual is the individual re25 ferred to in paragraph (1)(A) or a member of
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1 such individual’s family (as defined in section

2 2032A(e)(2)),

3 ‘‘(B) the provider of the funeral services

4 for such funeral is specified in the trust instru5 ment or in an agreement pursuant to which the

6 trust is established,

7 ‘‘(C) an agreement which is in effect be8 tween such individual and such provider speci9 fies that such provider shall be treated as de10 scribed in paragraph (1) and such agreement is

11 entered into on or before the date on which the

12 trust is established,

13 ‘‘(D) the trustee of the trust agrees to fur14 nish to such provider, at the time and in the

15 manner prescribed by the Secretary, such infor16 mation as is necessary for the provider to com17 ply with this subsection, and

18 ‘‘(E) such trust is established before the

19 death of such individual or the member of the

20 individual’s family, as the case may be.’’

21 (b) EFFECTIVE DATE.—

22 (1) IN GENERAL.—The amendment made by

23 this section shall apply to items which, but for such

24 amendment, would be taken into account in taxable
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1 years of a grantor which end after the date of the

2 enactment of this Act.

3 (2) TRUSTS ESTABLISHED BEFORE DATE OF

4 ENACTMENT.—In the case of a trust established be5 fore the date of the enactment of this Act, section

6 672(g)(3)(C) of such Code (as added by this section)

7 shall be applied by treating an agreement which is

8 entered into before the end of the 1-year period be9 ginning with the date of the enactment of this Act

10 as if such agreement were entered into on or before

11 the date on which the trust was established.

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