Report Title:

Preneed Funeral Trusts; Unclaimed Property

 

Description:

Includes cemetery property, preneed funeral services, and preneed interment in definition of unclaimed property; requires notice.  Creates presumption.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1565

TWENTY-FIFTH LEGISLATURE, 2009

 

STATE OF HAWAII

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to unclaimed property.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  Section 441-22.5, Hawaii Revised Statutes, is amended to read as follows:

     "§441-22.5  Mortuary, cemetery, or pre-need funeral authority; disclosure requirements.  (a)  No cemetery property, interment services, funeral services, and related commodities shall be sold unless the mortuary, cemetery, or pre-need funeral authority first satisfies the requirements stated in section 441-22.6.

     (b)  Every cemetery or pre-need funeral authority shall be required to provide to the purchaser of cemetery property, pre-need interment, or pre-need funeral services and related commodities a written contract which shall contain the following disclosures:

     (1)  The names and addresses of the cemetery or pre-need funeral authority, purchaser, and contract beneficiary, if the beneficiary is someone other than the purchaser[;], and the date of birth of the purchaser or contract beneficiary if the beneficiary is someone other than the purchaser;

     (2)  A clear and concise itemized statement of the property, including, for cemetery property, the location of the plot, crypt, or niche by its unique identifier, and any services and related commodities to be supplied or not supplied and by whom, particularly if the authority is not to be the provider under the terms of the contract;

     (3)  The purchase price of each item of property, services, and related commodities to be supplied, the total purchase price, and how the total purchase price is payable, including any credit terms, if applicable; provided that, pursuant to section 441-22.7, disclosure shall also be made that further additional charges or fees for perpetual care subsequent to the execution of the contract are prohibited for any purpose and on any occasion, except for reasonable fees related to the administrative costs of transferring ownership rights, including the cost of research, document and file preparation, photocopying, notary fees, records transfer and storage, and any other costs directly related to the transfer of ownership rights;

     (4)  Related costs covered under the contract;

     (5)  The basis on which funds are to be deposited in trust, including:

         (A)  The name and address of the trustee; provided that the disclosure shall not preclude the cemetery or pre-need funeral authority from changing the trustee named;

         (B)  The percentage of the contract price for trustable items to be placed in trust; provided that the percentage shall be no less than seventy per cent;

         (C)  The percentage of the contract price for trustable items that the cemetery or pre-need funeral authority will retain and not deposit into the trust; provided that the percentage shall not be more than thirty per cent; and

         (D)  Where a portion of the contract price relates to property, services, or related commodities that are not trustable items, a clear description of what those non-trustable items are;

     (6)  The refund, cancellation, and default provisions of the contract, including an explanation of the requirements of section 441-22.8, and a statement in twelve-point bold type in substantially the following form:

          "YOU HAVE REFUND, CANCELLATION AND DEFAULT RIGHTS UNDER STATE LAW AND UNDER THE CONTRACT.  PLEASE READ THE CONTRACT CAREFULLY FOR AN EXPLANATION OF THESE RIGHTS";

     (7)  The date and place of execution of the contract;

     (8)  The cemetery or pre-need funeral authority's or its duly authorized agent's signature on the contract and the identification of this person by name and title;

     (9)  A statement that the written contract, when signed, shall constitute the entire agreement between the parties relative to its subject matter and that all obligations of both parties shall be fixed and enforceable by the other parties of the contract; [and]

    (10)  A statement that the contract may not waive any rights of the consumer or duties of the cemetery or pre-need funeral authority under the law[.]; and

    (11)  A statement that cemetery property and moneys paid toward preneed services shall be treated as abandoned property for the purposes of chapter 523A if:

         (A)  The property or preneed services remain unused as of the one hundred fifteenth birthdate of the purchaser or the contract beneficiary, if the beneficiary is someone other than the purchaser, and;

         (B)  The cemetery or preneed funeral authority does not receive a response within ninety days of a written inquiry sent through certified or registered mail to the last known address of the purchaser or contract beneficiary, if the beneficiary is someone other than the purchaser.

     (c)  No mortuary, cemetery, or pre-need funeral authority shall charge a price for the cemetery property, interment, or funeral services, whether it be at-need or pre-need, which is greater than the price on the itemized price list or contract which the purchaser had signed, unless the purchaser or the purchaser's authorized representative requests an additional item, the authority discloses the price for the additional item, and the purchaser or its authorized representative approves the price for the additional item.  The mortuary, cemetery, or pre-need funeral authority may charge the higher price for the additional item but shall collect in payment only that sum which is the difference between the higher price and the price listed on the itemized price list or contract which the purchaser had previously signed."

     SECTION 2.  Section 523A-3, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§523A-3[]]  Presumptions of abandonment.  (a)  Property is presumed abandoned if it is unclaimed by the apparent owner during the time set forth below for the particular property:

     (1)  Traveler's check, fifteen years after issuance;

     (2)  Money order, seven years after issuance;

     (3)  Stock or other equity interest in a business association or financial organization, including a security entitlement under article 8 of the Uniform Commercial Code – Investment Securities, five years after the earlier of:

         (A)  The date of the most recent dividend, stock split, or other distribution unclaimed by the apparent owner; or

         (B)  The date of the second mailing of a statement of account or other notification or communication that was returned as undeliverable or after the holder discontinued mailings, notifications, or communications to the apparent owner;

     (4)  Debt of a business association or financial organization, other than a bearer bond or an original issue discount bond, five years after the date of the most recent interest payment unclaimed by the apparent owner;

     (5)  A demand, savings, or time deposit, including a deposit that is automatically renewable, five years after the earlier of maturity or the date of the last indication by the owner of interest in the property; provided that a deposit that is automatically renewable is deemed matured for purposes of this section upon its initial date of maturity, unless the owner has consented to a renewal at or about the time of the renewal and the consent is in writing or is evidenced by a memorandum or other record on file with the holder;

     (6)  Money or credits owed to a customer as a result of a retail business transaction, five years after the obligation accrued;

     (7)  Gift certificate not exempt under section 523A-3.5, five years after December 31 of the year in which the certificate was sold, but if redeemable in merchandise only, the amount abandoned shall be deemed to be one hundred per cent of the certificate's face value;

     (8)  Amount owed by an insurer on a life or endowment insurance policy or an annuity that has matured or terminated, five years after the obligation to pay arose or, in the case of a policy or annuity payable upon proof of death, three years after the insured has attained, or would have attained if living, the limiting age under the mortality table on which the reserve is based;

     (9)  Property distributable by a business association or financial organization in a course of dissolution, one year after the property becomes distributable;

    (10)  Property received by a court as proceeds of a class action, and not distributed pursuant to the judgment, one year after the distribution date;

    (11)  Property held by a court, government, governmental subdivision, agency, or instrumentality, one year after the property becomes distributable;

    (12)  Wages or other compensation for personal services, one year after the compensation becomes payable;

    (13)  Deposit or refund owed to a subscriber by a utility, one year after the deposit or refund becomes payable;

    (14)  Property in an individual retirement account, defined benefit plan, or other account or plan that is qualified for tax deferral under the income tax laws of the United States, three years after the earliest of the date of the distribution or attempted distribution of the property, the date of the required distribution as stated in the plan or trust agreement governing the plan, or the date, if determinable by the holder, specified in the income tax laws of the United States by which distribution of the property shall begin to avoid a tax penalty; [and]

    (15)  Cemetery property, preneed funeral services, and preneed internment services, ninety days after the one hundred fifteenth birthdate of the purchaser or contract beneficiary, if the beneficiary is someone other than the purchaser; and

   [(15)] (16)  All other property, five years after the owner's right to demand the property or after the obligation to pay or distribute the property arises, whichever first occurs.

     (b)  At the time that an interest is presumed abandoned under subsection (a), any other property right accrued or accruing to the owner as a result of the interest, and not previously presumed abandoned, shall also be presumed abandoned.

     (c)  Property is unclaimed if, for the applicable period set forth in subsection (a), the apparent owner has not communicated in writing or by other means reflected in a contemporaneous record prepared by or on behalf of the holder, with the holder concerning the property or the account in which the property is held, and has not otherwise indicated an interest in the property.  A communication with an owner by a person other than the holder or [its] the holder's representative [who has not in writing identified] and which does not identify the property to the owner in writing shall not be an indication of interest in the property by the owner.

     (d)  An indication of an owner's interest in property includes:

     (1)  The presentment of a check or other instrument of payment of a dividend or other distribution made with respect to an account or underlying stock or other interest in a business association or financial organization or, in the case of a distribution made by electronic or similar means, evidence that the distribution has been received;

     (2)  Owner-directed activity in the account in which the property is held, including a direction by the owner to increase, decrease, or change the amount or type of property held in the account;

     (3)  The making of a deposit to or withdrawal from a bank account; and

     (4)  The payment of a premium with respect to a property interest in an insurance policy; but the application of an automatic premium loan provision or other nonforfeiture provision contained in an insurance policy shall not prevent a policy from maturing or terminating if the insured has died or the insured or the beneficiary of the policy has otherwise become entitled to the proceeds before the depletion of the cash surrender value of a policy by the application of those provisions.

     (e)  Property shall be payable or distributable for purposes of this part notwithstanding the owner's failure to make demand or present an instrument or document otherwise required to obtain payment."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2009.

 

INTRODUCED BY:

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