An Act To Require Funds for Prearranged Funerals To Be Invested Subject to the Requirements of the Maine Uniform Prudent Investor Act and To Update Related Provisions
Maine Legislature, Session 125, LD 1716
Committee: Insurance and Financial Services
Sponsors: BECK, SULLIVAN, DRISCOLL, MARTIN, MORISSETTE, TUTTLE, ALFOND, WHITTEMORE
Amends: 32 MRSA §1401

Legislative Document 
No. 1716 
H.P. 1269 
House of Representatives, December 28, 2011 
An Act To Require Funds for Prearranged Funerals To Be Invested 
Subject to the Requirements of the Maine Uniform Prudent Investor 
Act and To Update Related Provisions 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203. 
Received by the Clerk of the House on December 23, 2011.  Referred to the Committee on 
Insurance and Financial Services pursuant to Joint Rule 308.2 and ordered printed pursuant to 
Joint Rule 401. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative BECK of Waterville. 
Cosponsored by Senator SULLIVAN of York and 
Representatives: CORNELL du HOUX of Brunswick, DRISCOLL of Westbrook, MARTIN of 
Eagle Lake, MORISSETTE of Winslow, TUTTLE of Sanford, Senators: ALFOND of 
Cumberland, WHITTEMORE of Somerset. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  32 MRSA §1401, sub-§1, as amended by PL 2007, c. 402, Pt. J, §1, is 
further amended to read: 
1.  Plan requirements.  Except as provided in subsection 1-A, any prearranged 
funeral or burial plan contracted or undertaken within this State must comply with the 
following. 
A.  All money paid during a person's lifetime to any individual, firm, association, 
partnership or corporation, by that person or by someone on behalf of that person, 
under 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 must be 
deposited by the payee within 10 days after receipt of the money in a separate an 
account in a financial institution or credit union authorized to do business in this 
State, as defined in Title 9-B, section 131, subsections 12-A and 17-A, or in a 
national banking institution authorized to act as a fiduciary pursuant to 12 United 
States Code, Section 92a (2011) and the regulations of the federal Office of the 
Comptroller of the Currency, in the name of the payee as mortuary trustee for the 
person for whose benefit the payment was made and must be held in that account 
together with interest if any.  If money is paid by check, share draft or money order, 
the payee shall instruct the payor to make the instrument payable to the financial 
institution or, credit union or national banking institution into which it is to be 
deposited and to include on the instrument the name of the mortuary trustee and the 
person for whose benefit the payment was made. 
B.  The payee shall deposit the money in either a federally insured deposit or share 
account or a trust account; the type of account must be disclosed to the payor or the 
payor's representative and a deposit in a trust account may be invested in or used to 
purchase only the following: an account in a financial institution or credit union 
authorized to do business in this State, as defined in Title 9-B, section 131, 
subsections 12-A and 17-A, or in a national banking institution authorized to act as a 
fiduciary pursuant to 12 United States Code, Section 92a (2011) and the regulations 
of the federal Office of the Comptroller of the Currency.  The money must be 
invested consistent with the requirements of the Maine Uniform Prudent Investor 
Act. 
(1)  Federally insured deposit or share accounts; 
(2)  Securities issued, insured or guaranteed by the United States or by any 
agency or corporate or other instrumentality of the United States; 
(3)  Municipal securities that are exempt from registration under Title 32, section 
16201, subsection 1; and 
(4)  Permanent life insurance, other than variable life insurance and annuities, 
from an insurer authorized to transact insurance in this State, subject to the 
provisions of Title 24-A, chapter 27.  A payee or mortuary trustee may not 
receive any commission, fee or other consideration from an insurer in connection 
with the procurement or purchase of insurance permitted by this subparagraph. 
Except for fees allowed by this section, all investments made with trust assets remain 
trust assets. 
C.  Within 30 days after the deposit of funds by the payee, the financial institution or, 
credit union or national banking institution shall provide a written confirmation of the 
deposit, including the amount deposited, to the payor or the payor's legal 
representative. Nothing in this section may be construed to prevent the direct transfer 
of these funds to another financial institution or, credit union or national banking 
institution by payee transfer, by financial institution or, credit union or national 
banking institution merger or consolidation or by operation of law, provided that as 
long as within 30 days after the direct transfer of the funds, the recipient financial 
institution or, credit union shall provide or national banking institution provides a 
written confirmation of the deposit, including the amount deposited, to the payor or 
the payor's legal representative. 
D.  The agreement must be in writing and a copy must be furnished to the payor or 
the payor's legal representative by the payee when the agreement is executed.  The 
agreement may be revocable or irrevocable; however, if irrevocable, there must be a 
provision to allow for the transfer of the account by the appointment of successor 
trustees.  The agreement must clearly state the name of the initial financial institution 
or, credit union or national banking institution into which the money will be 
deposited and must direct the payor to send a copy of the agreement to the named 
financial institution or, credit union or national banking institution.  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 account; fees must be reasonable, as defined by the board, and 
may be charged only: 
(1)  Upon transfer of the 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 account. 
The payee shall maintain a complete record of the deposit of all funds, including 
principal and interest.  The record must be available for inspection by the payor, the 
payor's legal representative, the commissioner's designee or an inspector for the board 
and must contain the name and address of the financial institution or, credit union or 
national banking institution currently in possession of the funds and the dates and 
amounts of deposits. 
E.  The funds may be directed by the payee to another financial institution or, credit 
union or national banking institution or directed back to the payor or the payor's legal 
representative, if otherwise lawful and permitted by contract, on written instructions 
of the payor or the payor's legal representative.  The funds may only be withdrawn by 
the payee on presentation of a certified copy of the death certificate of the person for 
whose benefit the funds were paid, in which event they must be used in accordance 
with the agreement. 
Sec. 2.  32 MRSA §1401, sub-§3, as amended by PL 1999, c. 590, §2, is further 
amended to read: 
3.  Financial institution, credit union or national banking institution liability.  
The financial institution or, credit union or national banking institution is discharged from 
liability for direct payment of the funds in an account under subsection 1 to another 
financial institution or, credit union or national banking institution or to the payor, upon 
presentation of a written consent to withdrawal signed by the payor or the payor's legal 
representative and by the payee or upon withdrawal of the funds by the payee upon 
presentation of a certified copy of the death certificate of the person for whose benefit the 
funds were paid. 
SUMMARY 
This bill requires that funds held in prearranged funeral and burial plans be invested 
and managed consistent with the prudent investor rule and related requirements of the 
Maine Uniform Prudent Investor Act.  It also provides that such funds may be deposited 
in a national banking institution authorized to act as a fiduciary pursuant to federal law 
and the regulations of the federal Office of the Comptroller of the Currency.