Ohio cemetery endowment care and prepaid-funeral rights

Ohio requires a cemetery to establish and maintain an endowment care trust in order to operate. The cemetery must place at least 10% of the gross sales proceeds from each burial lot, burial right, entombment right or columbarium right into the trust, no later than 30 days after the month in which the entire sale price is received. Annual reports of the trust’s assets and investments must be available for inspection at reasonable times by any owner of interment rights in the cemetery. If you own interment rights, you can ask to see the latest report. [3]

At the time of sale, the cemetery must give you a written agreement that identifies and unconditionally guarantees the specific location of the lot or right you are buying. Check that the agreement names the exact location before you pay. [3]

The endowment care trust requirement does not apply to family cemeteries, national cemeteries, or cemeteries owned and operated entirely and exclusively by churches, religious societies, established fraternal organizations, municipal corporations or other political subdivisions. That exemption does not mean such a cemetery provides no care. Ask whether and how it funds long-term care. [3]

Anyone entering into a preneed funeral contract in Ohio may rescind it within seven days and receive 100% of the payments made. The contract must include a boldface notice of that right. A contract may not restrict you from making it irrevocable. Note the date you sign so you know when the seven days end. [1]

For preneed contracts funded by any means other than insurance or annuities, payments must generally be made payable to the trustee of the preneed trust, and the seller must send payments to the trustee within 30 days unless you rescind. A seller offering a fixed, firm or guaranteed price may charge an initial service fee of up to 10% of the total payments, and on an installment contract it may collect that fee only after all installments are paid. Ask whether your contract has a guaranteed price and whether an initial service fee applies. [2]

To cancel a revocable trust-funded contract, give written notice to both the seller and the trustee; you may cancel 15 days later. If the contract does not guarantee the price, the trustee gives you all the trust’s assets at cancellation, less trustee fees, distributions paid and expenses. If it does guarantee the price, the seller may also take a cancellation fee, and that fee plus any initial service fee may not exceed 10% of the trust’s value on the cancellation date. Ask the trustee for a written estimate of what you would receive. [2]

That cancellation rule is for revocable contracts. If your contract is irrevocable, you may transfer it to a successor seller by written notice to the trustee and the original seller, and the trustee must list the new seller within 15 days. For a guaranteed-price contract, the original seller may take a transfer fee of up to 10% of the trust’s value, counting any initial service fee toward that limit; no transfer fee is allowed if the price was not guaranteed. Ask about transfer fees before you make a contract irrevocable. [2]