Oregon crematory, cemetery and prepaid-plan rights

Oregon law says a person may not operate a crematorium without a certificate of authority, applied for on a form from the State Mortuary and Cemetery Board. Each crematorium location is treated as a separate location and must be licensed separately. Ask which crematorium will carry out the cremation and where it is, then check that location’s own record with the Board. [1]

ORS 97.810 sets the minimum an endowment care cemetery must deposit in its endowment care fund from each sale: at least 15% of the gross sales price for a grave sold without a grave liner installed, with a $5 minimum; at least 9% for a grave sold with a liner installed; and at least 5% for each niche, crypt or private mausoleum. Deposits are due within 30 days of receiving a payment. Ask whether the cemetery is an endowment care cemetery and which rate applies to the space you are buying. [2]

The same section requires the heading of contracts and deeds for plots in an endowment care cemetery to state, “This cemetery is an endowment care cemetery.” An endowment care cemetery may set off a small area sold without endowed care, and contracts for plots in that area must carry the phrase “nonendowed care” at the top. A cemetery may not operate or advertise as an endowment care cemetery until it complies with the section. Read the heading of your contract before you sign. [2]

ORS 97.020 says the endowment care rules in ORS 97.810 to 97.865 do not apply to cemeteries of religious or charitable organizations, county or city cemeteries, or certain historic cemeteries run by tax-exempt nonprofit organizations. A religious, charitable, county or city cemetery may choose, by filing with the state, to come under those rules. The exemption does not by itself tell you what care a cemetery provides. Ask for its written care arrangements and how they are funded. [3][4]

For a prearrangement contract sold by a certified provider, Oregon requires 90% of each amount received on a guaranteed contract to go into trust, with the provider entitled to the other 10%. For a nonguaranteed contract, 100% goes into trust. The money must be paid to a master trustee or depository within five business days, and a guaranteed contract must disclose the provider’s 10%. Ask whether your contract is guaranteed or nonguaranteed and who holds the trust money. [7][6]

Except for an irrevocable contract, the purchaser may cancel a prearrangement contract at any time before the beneficiary’s death. The refund is all amounts paid on the contract, together with the trust earnings described in ORS 97.943(8), less amounts paid for merchandise already delivered or services already performed. Oregon’s definition of delivery can include merchandise stored for you or held by the manufacturer. Ask whether any item on your contract already counts as delivered. [8][5]

A prearrangement contract may be made irrevocable if the beneficiary receives, or reasonably expects to receive, public assistance or medical assistance, and a contract may let the beneficiary make it irrevocable later. The cancellation right described above does not apply to an irrevocable contract. Check whether you are making that choice before you sign. [6][8]

Oregon’s definition of a prearrangement sale excludes the sale and assignment of a life insurance policy or annuity. These trust and refund rules therefore do not establish what you would get back from a plan funded that way. Ask the seller how the plan is funded and for the policy’s own cancellation terms. [5]