CHAPTER 55-11
PREARRANGED FUNERAL TRUSTS
55-11-1 End-of-life directives--Prearranged funeral contract--Portion of money paid under contract held in trust.
55-11-1.1 Personal property and professional services to be provided under prearranged funeral trust contract.
55-11-2 Deposit of trust fund in banking institution or association--Violation as misdemeanor.
55-11-3 Contract to be in writing--Copies furnished depository and personal representative of contracting party--Clause concerning trust fund required.
55-11-3.1 Clause required in contract not providing guaranteed price.
55-11-4 Financial institution receiving money in trust--Acknowledgment on copy of prearranged funeral contract.
55-11-5 Cancellation of contract creating revocable trust.
55-11-5.1 Return of payments required on revocation under contract with guaranteed price.
55-11-6 55-11-6. Repealed by SL 1986, ch 408, § 13
55-11-7 Solicitation of funeral trust contracts--Annual registration required--Exception--Unauthorized solicitation or sale prohibited--Violation as misdemeanor.
55-11-8 Information to be submitted upon registration.
55-11-9 Repealed.
55-11-10 Applicability of § 37-24-5.4.
55-11-11 Prearranged funeral contract pooled funds trust--Creation--Separate accounts--When consent of purchaser required.
55-11-12 Death or relocation of beneficiary of irrevocable prearranged funeral trust--Seller's option to provide comparable services or return deposits and interest--Disposition of funds.
55-11-12.1 Disbursement of funds in irrevocable prearranged funeral trust.
55-11-13 Prearranged funeral contract not burial insurance.
55-11-14 Applicability of act to certain contracts.
55-11-15 Certain persons operating cemeteries exempted from provisions regarding sale of merchandise and services--Maintenance of funds.
55-11-1. End-of-life directives--Prearranged funeral contract--Portion of money paid under contract held in trust.
Before a person's death, the person or someone on the person's behalf may direct the location, manner, and conditions of disposition of the person's remains, and the arrangements for funeral goods and services to be provided upon the person's death, and contract with another person for the purchase or rental of personal property or professional services for the final disposition of the person's body. At least eighty-five percent of all money paid under the contract must be held in a revocable or an irrevocable trust, at the purchaser's option. The money must be held in trust until the obligation of the contract is fulfilled according to its terms or, if a revocable trust, the money is refunded to the person who made the payments.
Source: SL 1953, ch 496, § 1; SDC Supp 1960, § 27.1409; SL 1967, ch 104, § 1; SL 1975, ch 302, § 1; SL 1981, ch 355, § 1; SL 1986, ch 408, § 1; SL 2022, ch 113, § 11.
55-11-1.1. Personal property and professional services to be provided under prearranged funeral trust contract.
The personal property to be delivered according to the terms of a prearranged funeral trust contract includes such things as: grave liners, vaults, transportation containers, grave markers, cremation urns or vaults, grave ornamentation, flowers, statuary, floral arrangements, caskets, clothing, memorial items, guest books and other personal property incidental to a funeral or burial service. Professional services to be provided according to the terms of a prearranged funeral trust contract are the embalming of the deceased person's body or the conduct of a funeral service for hire and any other professional services associated with the disposition, storage, preparation or burial of a deceased person's body.
Source: SL 1986, ch 408, § 7.
55-11-2. Deposit of trust fund in banking institution or association--Violation as misdemeanor.
Within ten days after receipt, the person holding money in trust under § 55-11-1 shall deposit it in a banking institution, or place the money in an account in a savings and loan association, or a federal credit union organized under the laws of this state or of the United States of America, provided, however, such institutions are domiciled in the state of South Dakota, and the deposits or accounts of which banking institution, federal credit union or association are guaranteed by the federal government or insured by an instrumentality of the federal government. The money shall be carried in a trust account in the name of the depositor as trustee for the person who will receive the benefit of the property and services upon his death. Any person intentionally violating the provisions of this section is guilty of a Class 1 misdemeanor.
Source: SL 1953, ch 496, §§ 2, 4; SDC Supp 1960, §§ 27.1410, 27.9954; SL 1967, ch 104, § 2; SL 1980, ch 24, § 109; SL 1986, ch 408, § 2.
55-11-3. Contract to be in writing--Copies furnished depository and personal representative of contracting party--Clause concerning trust fund required.
A contract pursuant to § 55-11-1 shall be in writing and sufficient copies thereof shall be left with the depository pursuant to § 55-11-2 to comply with the provisions of this chapter, and a copy thereof shall also be furnished, upon request, to any personal representative of the estate of the decedent who contracted for his burial during his lifetime. The contract shall contain the following in twelve point bold type:
IF THIS CONTRACT IS PURCHASED FOR A GUARANTEED PRICE, NO LESS THAN EIGHTY-FIVE PERCENT OF ANY FUNDS RECEIVED UNDER THIS CONTRACT ARE REQUIRED BY LAW TO BE PLACED IN A FUNERAL TRUST FUND IN A DEPOSITORY DESCRIBED IN SDCL 55-11-2, IN EITHER A REVOCABLE OR IRREVOCABLE TRUST. IF THIS CONTRACT IS NOT FOR A GUARANTEED PRICE, ONE HUNDRED PERCENT OF ANY FUNDS RECEIVED UNDER THIS CONTRACT ARE REQUIRED BY LAW TO BE PLACED IN A FUNERAL TRUST FUND IN A DEPOSITORY DESCRIBED IN SDCL 55-11-2 IN EITHER A REVOCABLE OR IRREVOCABLE TRUST. THIS CONTRACT, IF A REVOCABLE TRUST, MAY BE CANCELED AT ANY TIME UPON THIRTY DAYS WRITTEN NOTICE AND ONE HUNDRED PERCENT OF THE MONEY PAID INTO TRUST TOGETHER WITH ONE HUNDRED PERCENT OF ACCRUED TRUST INTEREST SHALL BE RETURNED TO THE CONTRACT PURCHASER.
Source: SL 1953, ch 496, § 1; SDC Supp 1960, § 27.1409; SL 1967, ch 104, § 1; SL 1981, ch 355, § 2; SL 1986, ch 408, § 3.
55-11-3.1. Clause required in contract not providing guaranteed price.
In addition to the requirements of § 55-11-3, any contract entered into pursuant to § 55-11-1, which does not provide for a guaranteed price for services or personal property to be delivered or performed pursuant to the terms of the contract, shall contain the following in twelve point bold type:
ANY FUNDS PAID UNDER THIS CONTRACT ARE ONLY A DEPOSIT TO BE APPLIED TOWARD THE FINAL COSTS OF THE SERVICES OR PERSONAL PROPERTY CONTRACTED FOR. ADDITIONAL CHARGES MAY BE REQUIRED.
Source: SL 1981, ch 355, § 4.
55-11-4. Financial institution receiving money in trust--Acknowledgment on copy of prearranged funeral contract.
When a banking institution, federal credit union or a savings and loan association has received money in trust under § 55-11-2, it shall acknowledge receipt thereof upon the copies of the contract for said prearranged funerals.
Source: SL 1953, ch 496, § 3; SDC Supp 1960, § 27.1411; SL 1967, ch 104, § 3; SL 1981, ch 356; SL 1986, ch 408, § 15.
55-11-5. Cancellation of contract creating revocable trust.
The contract creating a revocable trust mentioned in § 55-11-1 may be canceled by either party thereto at any time upon thirty days' written notice of such cancellation.
Source: SL 1953, ch 496, § 1; SDC Supp 1960, § 27.1409; SL 1967, ch 104, § 1; SL 1975, ch 302, § 2.
55-11-5.1. Return of payments required on revocation under contract with guaranteed price.
A person who revokes a revocable trust under a contract providing a guaranteed price is entitled to receive one hundred percent of all money paid into trust under the contract together with one hundred percent of accrued interest unless a greater amount is specified in the contract.
Source: SL 1981, ch 355, § 3; SL 1986, ch 408, § 4.
55-11-7. Solicitation of funeral trust contracts--Annual registration required--Exception--Unauthorized solicitation or sale prohibited--Violation as misdemeanor.
Notwithstanding the provision contained in subdivision 36-19-38(8), prearranged funeral trust contracts may be solicited. However, no person may sell, offer to sell or solicit a prearranged funeral trust contract unless he registers annually with the State Board of Funeral Service and the person is a funeral establishment licensed in the State of South Dakota or a person, partnership or corporation engaged in the business of the ownership, maintenance or operation of a cemetery or an agent or employee of a funeral establishment licensed in the State of South Dakota or the agent or employee of a person, partnership or corporation engaged in the business of the ownership, maintenance or operation of a cemetery. Any natural person who is licensed to practice funeral service under chapter 36-19 and who is the owner or employee of a funeral home licensed pursuant to § 36-19-14 is exempt from the registration requirements of this section and, as to activities for which such person is licensed pursuant to chapter 36-19, is exempt from the licensing and bonding provisions of chapter 37-13. Failure to annually register is a Class 2 misdemeanor.
No person may sell, offer to sell or solicit a prearranged funeral trust contract for professional services as defined in § 55-11-1.1 unless the seller or the funeral establishment or cemetery of which the seller is an agent or employee is authorized by law to provide and is regularly engaged in the business of providing such services. Any violation of this section is a Class 2 misdemeanor.
Source: SL 1981, ch 355, § 5; SL 1986, ch 408, § 5; SL 1987, ch 366.
55-11-8. Information to be submitted upon registration.
When a person registers to sell prearranged funeral trust contracts, he shall submit to the State Board of Funeral Service the following information:
(1) The name and address of the funeral establishment or cemetery association which has authorized him to sell prearranged funeral trust contracts;
(2) His name and address;
(3) A sworn statement that he has not been convicted of any crime within the last five years involving the elements of fraud or misrepresentation; and
(4) A statement of compliance with chapter 37-13.
Source: SL 1986, ch 408, § 6.
55-11-10. Applicability of § 37-24-5.4.
Notwithstanding §§ 55-11-1, 55-11-3, 55-11-5 and 55-11-5.1 and notwithstanding that the prearranged funeral trust contract may create an irrevocable trust, all prearranged funeral trust contracts are subject to the requirements of § 37-24-5.4.
Source: SL 1986, ch 408, § 8.
55-11-11. Prearranged funeral contract pooled funds trust--Creation--Separate accounts--When consent of purchaser required.
A prearranged funeral contract pooled funds trust may be created by a funeral director or a funeral establishment licensed in South Dakota, the South Dakota funeral directors association or a cemetery association organized under chapter 55-12. However, separate accounts within the pooled funds trust shall be maintained so that a purchaser whose money has been deposited into the pooled funds trust may identify his money. No purchaser's money may be deposited into a pooled funds trust unless the purchaser signs a form consenting to the deposit of his money into a pooled funds trust. The provision regarding consent shall not apply to prearranged funeral trusts where the personal property and professional services are to be provided for a guaranteed amount of money.
Source: SL 1986, ch 408, § 9.
55-11-12. Death or relocation of beneficiary of irrevocable prearranged funeral trust--Seller's option to provide comparable services or return deposits and interest--Disposition of funds.
If the beneficiary of an irrevocable prearranged funeral trust for a guaranteed price dies outside the general area or moves outside the general area served by the provider designated in a prearranged funeral trust contract, the seller shall either provide for the furnishing of comparable funeral services and merchandise by a licensed mortuary or cemetery selected by the next of kin of the purchaser or, at the seller's option, shall pay over to the purchaser, or upon the death of the purchaser to the next of kin of the purchaser in fulfillment of all obligations under the contract, an amount equal to all deposits made into trust under the prearranged funeral trust contract together with the accrued trust interest to be provided for in the contract. Upon seller's full performance under the provisions of this section, the trustee shall distribute to the seller from the trust an amount equal to all deposits made into the trust together with the accrued trust interest.
Source: SL 1986, ch 408, § 10; SL 1997, ch 278, § 1.
55-11-12.1. Disbursement of funds in irrevocable prearranged funeral trust.
Every trustee of an irrevocable prearranged funeral trust which does not provide for a guaranteed price shall pay from the trust funds and any accrued interest the actual charges incurred for furnishing funeral services and merchandise to the funeral director, funeral establishment, or embalmer, licensed under chapter 36-19, or similarly licensed in any other state that provides funeral services and merchandise for the beneficiary of the irrevocable prearranged funeral trust. The balance of the funds remaining in the prearranged funeral trust, if any, shall be paid by the trustee to the purchaser or to the estate or next of kin of the purchaser, subject to § 28-6-23 and rules pertaining thereto and the terms of the prearranged funeral trust agreement. Payment of all of the trust funds, plus any accrued interest, as provided in this section, within thirty days after receipt of a death certificate, relieves the trustee of any further duties or obligations.
Source: SL 1997, ch 278, § 2.
55-11-13. Prearranged funeral contract not burial insurance.
A prearranged funeral contract sold in compliance with chapter 55-11 is not burial insurance under § 58-9-4.
Source: SL 1986, ch 408, § 14.
55-11-14. Applicability of act to certain contracts.
The terms of each prearranged funeral trust contract in effect before July 1, 1986, is subject to chapter 55-11 in effect as it appeared in the 1980 revision and pocket parts of volume 15B of the South Dakota Codified Laws on June 30, 1986. All prearranged funeral trust contracts entered on or after July 1, 1986, are subject to this chapter.
Source: SL 1986, ch 408, § 12.
55-11-15. Certain persons operating cemeteries exempted from provisions regarding sale of merchandise and services--Maintenance of funds.
Any person, corporation, partnership, association or other entity engaged in the business of owning, maintaining or operating a cemetery in the state of South Dakota prior to July 1, 1986, shall be exempt from the provisions of this chapter for purposes of the sale through the cemetery of merchandise and services incidental to a burial service. Except that such person, corporation, partnership, association or other entity engaged in the cemetery business shall maintain at least seventy percent of all money paid under a prearranged burial contract in the manner set forth in §§ 55-11-1, 55-11-2 and 55-11-5.1.
Source: SL 1986, ch 408, § 15A.
