An Act Regarding Mortuary Trusts
Maine Legislature, Session 121, LD 0676
Committee: Insurance and Financial Services
Sponsors: MAYO, SULLIVAN
Amends: 24-A MRSA §2420

Legislative Document 
No. 676 
S.P.240 
In Senate, February 14, 2003 
An Act Regarding Mortuary Trusts 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Senator MAYO of Sagadahoc. 
Cosponsored by Representative SULLIVAN of Biddeford. 
Printed on recycled paper 
JOY J. O'BRIEN 
Secretary of the Senate 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA §2420. sub-§3-A is enacted to read: 
3-A. 
Upon receiving notice of a revocation of an assignment 
of a life insurance policy pursuant to this section, an insurer 
shall notify the assignee of the policy that the insured or owner 
has revoked the assignment. 
The insurer shall also notify the 
assignee if any cash value of the policy has been distributed at 
the time of revocation. 
Notice must be sent to the assignee 
within 30 days. 
Sec. 2. 32 MRS A §1401. sub-§L as amended by PL 1999, c. 590, 
§1, is further amended by amending the first paragraph to read: 
1. 
Plan requirements. 
ABy Except as provided in subsection 
I-A, 
any 
prearranged 
funeral 
or 
burial 
plan 
contracted 
or 
undertaken within this State must comply with the following. 
Sec. 3. 32 MRS A §1401, sub-§l-A is enacted to read: 
1-A. 
Plan funded with proce~ds of life insurance policy. 
A 
prearranged funeral or burial plan agreement may be funded with 
proceeds of 
a life insurance policy in accordance with this 
subsection. 
A. 
During a person's lifetime, 
a person or that person' s 
legal 
representative 
may 
enter 
into 
an 
agreement 
that 
services will be 
performed or personal property will be 
delivered 
in 
connection 
with 
the 
disposition 
of 
that 
person's body after death by: 
(1) 
Assigning 
the 
mortuary 
trustee 
as 
owner 
and 
beneficiary of a life insurance policy payable to the 
mortuary trustee upon that person's death: or 
( 2) 
Designating the mortuary trustee as a beneficiary 
of 
a 
life insurance policy payable to the mortuary 
trustee upon that person's death. 
B. An agreement under paragraph A must be in writing and a 
copy must be furnished to the person or the person's legal 
representative by the mortuary trustee when the agreement is 
executed. 
The agreement may be revocable or irrevocable; 
however, if the agreement is irrevocable, there must be a 
provision to allow for the transfer of the trust account by 
the appointment of successor trustees. 
The agreement must 
clearly state terms 
providing for disposition of excess 
funds after funeral goods and services have been provided. 
The 
agreement 
must 
clearly state any 
fees 
that may 
be 
charged against the trust account. Fees must be reasonable, 
as defined by the board, and may be charged only: 
( 1) 
Upon 
transfer 
of 
a 
trust 
account 
by 
the 
appointment of a successor trustee; 
(2) 
Upon revocation of the agreement if the agreement 
is revocable; and 
(3) 
For the actual financial and tax administration of 
the trust account. 
C. The mortuary trustee shall maintain a complete record of 
a 
trust account established under this subsection. 
The 
record must be available for inspection by the person, the 
person's legal representative, the commissioner's designee 
or an inspector for the board. 
SUMMARY 
This bill allows prearranged funeral plans to be funded with 
the proceeds of a life insurance policy.