2006 New York Code - Moneys Paid In Connection With Agreements For Funeral Merchandise Or Services In Advance Of Need To Be Kept On Deposit Pending Use Or Repayment.

 
    §   453.  Moneys  paid  in  connection  with  agreements  for  funeral
  merchandise or services in advance of need to be kept on deposit pending
  use or repayment.
    1. (a) Any and all moneys paid to a funeral  firm,  funeral  director,
  undertaker, cemetery, or any other person, firm or corporation, under or
  in  connection  with  an  agreement,  or  any  option  to  enter into an
  agreement, for the sale of merchandise to be used in connection  with  a
  funeral  or  burial,  or  for  the  furnishing of personal services of a
  funeral director or undertaker, wherein the merchandise  is  not  to  be
  actually  physically  delivered  or  the personal services are not to be
  rendered until the occurrence of the  death  of  the  person  for  whose
  funeral or burial such merchandise or services are to be furnished shall
  continue  to be the money of the person making such payment and shall be
  held in trust for such person by the  funeral  firm,  funeral  director,
  undertaker,  cemetery  or  any other person, firm or corporation to whom
  such payment is made and shall, within ten business days of receipt,  be
  deposited  in  an  interest  bearing  account  in a bank, national bank,
  federal savings bank, federal  savings  and  loan  association,  savings
  bank,  savings  and  loan  association,  credit union, or federal credit
  union within the state and duly authorized to receive  deposits  in  the
  state of New York and which shall earn interest at a rate which shall be
  at  not  less  than the prevailing rate of interest earned by other such
  deposits in such banks, savings banks, savings and loan associations, or
  credit unions under this section, or shall be placed in a trust  company
  in an investment backed by the government of the United States and shall
  not  be  commingled  with  other  moneys  of  the  funeral firm, funeral
  director, undertaker, cemetery, or other person, firm or corporation  or
  become  the  funds  of  the  funeral firm, funeral director, undertaker,
  cemetery, or other person, firm or corporation, and shall be so held  on
  deposit,  together with any interest thereon, until said merchandise has
  been actually physically delivered and said personal services have  been
  rendered,  unless  sooner  repaid, in whole or in part. No funeral firm,
  funeral director, undertaker, cemetery or  any  other  person,  firm  or
  corporation,  shall  discharge  the  obligation  established  under this
  section to deposit or place money with a bank,  national  bank,  federal
  savings  bank,  federal  savings  and  loan  association,  savings bank,
  savings and loan association, credit  union,  federal  credit  union  or
  trust  company within the state through a surety bond or other financial
  instrument unless expressly provided under this section.
    (b) Such funeral firm,  funeral  director,  undertaker,  cemetery,  or
  other  person,  firm  or  corporation  which received such moneys shall,
  within thirty business days after the  deposit  or  any  change  in  the
  institution   in   which  such  funds  are  deposited,  provide  written
  notification to the person who made such payment of the  institution  of
  the  deposit  and,  until  such  moneys have been repaid or the personal
  services and merchandise have been provided, shall annually provide  the
  person  who  made such payment with a statement identifying the location
  and annual interest earned by the account.
    (c) Upon request of the person who made such payment, or  his  or  her
  representative, the funeral firm, funeral director, undertaker, cemetery
  or  other  person,  firm or corporation which received such moneys shall
  provide a statement within thirty days of such request  identifying  the
  location  of  the account, amount of such account and interest earned on
  such account. Upon the provision of any merchandise or personal services
  in connection  with  any  such  agreement,  the  funeral  firm,  funeral
  director,  undertaker,  cemetery  or  other  person, firm or corporation
  which received such moneys  shall  provide  a  statement  itemizing  the
  merchandise   or  personal  services  provided  and  the  cost  of  such
  merchandise or personal services and describing the disposition  of  all
  moneys  in  the  account.  Copies  of such statements and the records on
  which they are based shall be made available for inspection and shall be
  made  available  during ordinary business hours for copying upon written
  request by  any  state  agency  regulating  the  funeral  firm,  funeral
  director,  undertaker,  cemetery  or  other  person, firm or corporation
  which received such money or enforcing the requirements of this section,
  provided a complaint, either oral or written, has been received,  or  an
  inspector  has  grounds  to believe that serious or repeat violations of
  this section have occurred.
    (d) Moneys paid for such an agreement for an applicant or recipient of
  supplemental security income benefits under section two hundred nine  of
  the  social  services  law  or of medical assistance under section three
  hundred sixty-six of such law shall be placed into a trust  which  shall
  be  irrevocable  but  under  which such applicant/recipient reserves the
  right to select any funeral firm, funeral director, undertaker, cemetery
  or any other person, firm or corporation to whom such  payment  is  made
  and  to  change  such  selection  any time to any type of funeral or any
  funeral firm, funeral director, cemetery or any other  person,  firm  or
  corporation  to  whom  such payment is made, located in the state of New
  York or any other state. Any such change must be carried out within  ten
  business  days  following  receipt  of a request by the purchaser to the
  funeral firm, funeral director, cemetery or any other  person,  firm  or
  corporation  to  whom  such  payment  is made, with which such trust was
  established. This requirement is subject to  any  limits  set  forth  in
  federal law or regulation pertaining to disregarded resources or income.
    2.  The  amount of any and all moneys paid under or in connection with
  such an agreement, together with interest, if any, accrued thereon while
  on deposit as so required shall be repaid on demand at any time prior to
  the delivery of the merchandise and/or the  rendering  of  the  personal
  services.  No  administrative, consultation or other fee may be assessed
  against the person making such payment in connection  with  or  planning
  for  such agreement. Provided, however, neither the applicant, recipient
  or other purchaser of preneed  funeral  goods  or  services  through  an
  irrevocable  trust,  their  legal  representative  nor the heirs of such
  person, shall be entitled to any repayment of the moneys  which  created
  such trust.
    3. Any such agreement must be in writing and must:
    (a) Identify all moneys paid or to be paid; and
    (b) Identify any fees paid to the person administering such trust fund
  by  a  third  party,  provided,  however, any such fees shall not exceed
  seventy-five hundredths of one percent of the amount of such trust fund;
  and
    (c) Except for an irrevocable trust established  pursuant  to  section
  two  hundred  nine  of  the  social  services  law  or  paragraph (d) of
  subdivision one of this section, notify the person making  such  payment
  of  his  or  her  right  to be repaid moneys paid, together with accrued
  interest, as described in this section  and  of  his  or  her  right  to
  receive an annual statement; and
    (d)  Identify  the  provider of each service or item of merchandise to
  the extent agreed upon, and fully describe the service or merchandise to
  the extent agreed upon; and
    (e) Describe the obligations of each party:
    (i) in the event the service or merchandise described in the agreement
  cannot, for reasons beyond the control of the parties, be provided  when
  needed;
    (ii)  in the event the cost of such services or merchandise, when such
  services or merchandise is to be provided, exceeds  the  amount  of  the
  moneys paid and accrued interest; and
    (iii)  in the event the amount of the moneys paid and accrued interest
  exceeds the cost of such services or merchandise when  they  are  to  be
  provided.  If  the  agreement  does  not  provide  to  the contrary, the
  services or merchandise described in the agreement must be provided  for
  no  more  than the price stated therein. Except for an irrevocable trust
  established pursuant to section two hundred nine of the social  services
  law  or  paragraph (d) of subdivision one of this section, any moneys in
  excess of the amount set forth in the agreement must be  repaid  to  the
  person  who  made  the  payment  or  to  the  estate of such person. The
  agreement must also specify the name and address of a person not  living
  at  the  address  of the person who made payments under or in connection
  with the agreement, to whom required notices may be sent if  the  person
  who  made  payments  under or in connection with the agreement cannot be
  contacted. The person making such payments may  decline  in  writing  to
  specify  the  name  and address of a person not living at the address of
  the person making such payments to whom such notice may be sent; and
    (f) With respect  to  an  agreement  for  an  irrevocable  trust  fund
  pursuant to section two hundred nine of the social services law, include
  the  following  statement  in  the  agreement in conspicuous print of at
  least twelve point type:
                                 DISCLOSURE
    NEW YORK LAW REQUIRES THIS AGREEMENT TO BE IRREVOCABLE FOR  APPLICANTS
  FOR  RECEIPT OF SUPPLEMENTAL SECURITY BENEFITS UNDER SECTION TWO HUNDRED
  NINE OF THE SOCIAL SERVICES LAW OR OF MEDICAL ASSISTANCE  UNDER  SECTION
  THREE  HUNDRED  SIXTY-SIX OF THE SOCIAL SERVICES LAW, AND FOR THE MONEYS
  PUT INTO A TRUST UNDER THIS AGREEMENT TO BE USED ONLY  FOR  FUNERAL  AND
  BURIAL EXPENSES. IF ANY MONEY IS LEFT OVER AFTER YOUR FUNERAL AND BURIAL
  EXPENSES  HAVE  BEEN PAID, IT WILL GO TO THE COUNTY. YOU MAY CHANGE YOUR
  CHOICE OF FUNERAL HOME AT ANY TIME.
    (g) Any promotional literature prepared after January first,  nineteen
  hundred  ninety-seven  by  a funeral firm, funeral director, undertaker,
  cemetery, or any other  person,  firm  or  corporation  for  prearranged
  funeral  and  burial  services  must  contain  language  disclosing  the
  irrevocable nature of burial trusts  established  for  an  applicant  or
  recipient   of   supplemental   security   income  benefits  or  medical
  assistance.
    4. Any provision of any such agreement whereby a person who pays money
  under or in connection therewith waives any provision  of  this  section
  shall be void.
    5. (a) Upon the sale or transfer of any business, firm, corporation or
  other  entity  having received moneys in connection with such agreements
  or the transfer of control over such  money,  both  the  new  owner  and
  former  owner  or  the  estate  of the former owner, or both the persons
  currently and formerly having control over  such  money,  shall,  within
  thirty  days  of  such  sale  or transfer, notify, in writing, each such
  person who has paid moneys of the sale or transfer, including  the  name
  and  address  of  the  new and former owner. Copies of such notification
  shall be made available for  inspection  and  shall  be  made  available
  during  ordinary  business hours for copying upon written request by any
  official or agency having jurisdiction.
    (b) Upon the sale or other transfer of any business, firm, corporation
  or  other  entity  having  received  moneys  in  connection  with   such
  agreements  or  upon  any  transfer  of  control  over  such moneys, the
  transferee shall be liable for compliance with all  provisions  of  this
  section  including  the repayment of any moneys and provision of funeral
  merchandise and services, and for compliance with all other requirements
  of this section if the  transferor  or  a  transferor's  predecessor  in
  interest  was  liable  for such compliance with the requirements of this
  section.  Such  liability  shall  attach whether or not the successor in
  interest has, upon conveyance of such  business,  firm,  corporation  or
  other  entity, received such moneys or has knowledge of the existence of
  the agreement as herein described. Such  liability  shall  attach  where
  there  is  proof  of a valid agreement for providing funeral merchandise
  and services, and the funeral director, undertaker,  cemetery  or  other
  person,  firm  or  corporation has not refunded the moneys received from
  the customer.
    (c) Upon the sale or other transfer of any business, firm, corporation
  or other entity having received such  moneys,  or  upon  a  transfer  of
  control  of  such  moneys,  the  transferor  shall  disclose  a complete
  accounting of all moneys transferred pursuant to such agreement  to  the
  transferee,  including  the  names  and  addresses  of  all  persons who
  deposited moneys with such business, firm, corporation or other  entity,
  the  amount  and  location  of  such  moneys, the names and addresses of
  persons who have received refunds and the amount of such refund.
    (d) Upon the termination, cessation of operation or discontinuance  of
  any  business,  firm,  corporation  or  other  entity which has received
  moneys in connection with such agreements or  is  otherwise  liable  for
  compliance  with  the requirements of this section, such business, firm,
  corporation or other entity shall repay  all  such  monies  and  accrued
  interest  as  if  a  demand had been made therefor within thirty days of
  such termination or discontinuation. Copies of records relating  to  the
  repayment  of such moneys shall be available for inspection and shall be
  made available during ordinary business hours for copying  upon  written
  request by the appropriate official or agency having jurisdiction.
    6.  Any  person, firm or corporation who or which, having received any
  moneys under or in connection with such an  agreement,  shall  knowingly
  and  willfully  fail  to deposit or keep such moneys on deposit shall be
  guilty of a misdemeanor  or,  shall  knowingly  and  willfully  fail  to
  provide  the  notification required pursuant to subdivision five of this
  section shall be guilty of a violation. Any person, firm or  corporation
  who  or  which,  having  received any moneys under or in connection with
  such an agreement, or who or which is deemed responsible for such moneys
  pursuant to subdivision five  of  this  section  shall,  without  lawful
  reason,  knowingly and willfully fail to repay, upon demand, any and all
  such moneys  as  provided  in  this  section,  or  shall  knowingly  and
  willfully  misappropriate  such  money  for a use not authorized in this
  section, shall, in addition to any other penalties provided by  law,  be
  guilty of a misdemeanor.
    7.  Whenever there shall be a violation of this section an application
  may be made by the attorney general in the name of  the  people  of  the
  state of New York to a court or justice having jurisdiction by a special
  proceeding  to  issue an injunction, and upon notice to the defendant of
  not less than five days, to enjoin and restrain the continuance of  such
  violation;  and  if  it shall appear to the satisfaction of the court or
  justice that the defendant has,  in  fact,  violated  this  section,  an
  injunction  may  be  issued  by  the  court  or  justice,  enjoining and
  restraining any further violations, without  requiring  proof  that  any
  person  has,  in  fact,  been  injured  or  damaged thereby. In any such
  proceeding, the court may make allowances to  the  attorney  general  as
  provided  in  paragraph  six  of subdivision (a) of section eighty-three
  hundred  three  of  the  civil  practice  law  and  rules,  and   direct
  restitution. Whenever the court shall determine that a violation of this
  section  has  occurred, the court may impose a civil penalty of not more
  than one thousand dollars for each  violation;  provided,  however,  the
  court  shall not impose a civil penalty in any case where the department
  of health has imposed such a penalty for an identical violation  of  the
  provisions  of  the  public  health  law.  In  connection  with any such
  proposed application the attorney general is authorized  to  take  proof
  and make a determination of the relevant facts and to issue subpoenas in
  accordance   with   the   civil  practice  law  and  rules,  and  direct
  restitution.
    8. Records required by this section to be maintained and  true  copies
  of  agreements shall be retained for four years following the provisions
  of funeral merchandise and services. In the event the funds are returned
  to the person who deposited the  money  or  their  representative,  such
  records, including the record of return of funds shall be retained for a
  period of four years after the sale, transfer, termination, cessation of
  operation or discontinuance of the funeral.
    9.  This  section  shall  not apply to the sale of lots or graves by a
  cemetery.