SB 5016: Prearrangement Funeral Services (2025 Regular Session)

Summary

Senate Bill 5016, State of Washington, 2025 Regular Session, by Senator Lovick, prefiled 12/04/24, is an act relating to prearrangement funeral services and amends the definitions and trust provisions for funeral establishments. The legislature finds that a prearrangement funeral service lets a person plan and purchase a funeral service in advance, and intends to modernize the requirements placed on funeral establishments that offer these services. The amended trust section changes the share of each contract's cash purchase price that the funeral establishment may retain and the share that must be placed in the trust. A contract canceled within thirty calendar days of its signing gets a full refund.

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Full text

     S-0242.1

                               SENATE BILL 5016


     State of Washington       69th Legislature       2025 Regular Session

     By Senator Lovick

     Prefiled 12/04/24.




 1       AN ACT Relating to prearrangement funeral services; amending RCW
 2   18.39.010 and 18.39.250; and creating a new section.


 3   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:


 4       NEW SECTION.      Sec. 1.       The legislature finds that a
 5   prearrangement funeral service allows a person to prepare for, plan,
 6   and purchase their funeral service in advance so that their funeral
 7   preferences are honored. Many families face difficult decisions upon
 8   a loved one's passing. The legislature finds that making and paying
 9   for one's own final wishes can relieve the emotional decisions and
10   financial hardships around funeral services that are typically placed
11   on families. Therefore, the legislature recognizes the benefit and
12   need for prearrangement funeral services and intends to modernize the
13   requirements   placed   upon   funeral   establishments   who   offer
14   prearrangement funeral services.


15       Sec. 2.   RCW 18.39.010 and 2019 c 432 s 36 are each amended to
16   read as follows:
17       The definitions in this section and in chapter 68.04 RCW apply
18   throughout   this  chapter  unless  the   context clearly  requires
19   otherwise.


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 1       (1) "Board" means the funeral and cemetery board created pursuant
 2   to RCW 18.39.173.
 3       (2) "Director" means the director of licensing.
 4       (3) "Embalmer" means a person engaged in the profession or
 5   business   of   disinfecting   and   preserving   human   remains for
 6   transportation or final disposition.
 7       (4) "Funeral director" means a person engaged in the profession
 8   or business of providing for the care, shelter, transportation, and
 9   arrangements for the disposition of human remains that may include
10   arranging and directing funeral, memorial, or other services.
11       (5) "Funeral establishment" means a place of business licensed in
12   accordance with RCW 18.39.145, that provides for any aspect of the
13   care,    shelter,   transportation,    embalming,   preparation,  and
14   arrangements for the disposition of human remains and includes all
15   areas of such entity and all equipment, instruments, and supplies
16   used in the care, shelter, transportation, preparation, and embalming
17   of human remains.
18       (6) "Funeral merchandise or services" means those services
19   normally performed and merchandise normally provided by funeral
20   establishments, including the sale of burial supplies and equipment,
21   but excluding the sale by a cemetery of lands or interests therein,
22   services   incidental   thereto,    markers,   memorials,   monuments,
23   equipment, crypts, niches, or vaults.
24       (7) "Licensee" means any person or entity holding a license,
25   registration, endorsement, or permit under this chapter issued by the
26   director.
27       (8) "Prearrangement funeral service contract" means any contract
28   under which, for a specified consideration, a funeral establishment
29   promises, upon the death of the person named or implied in the
30   contract, to furnish funeral merchandise or services. "Prearrangement
31   funeral service contract" does not include funeral merchandise that
32   is delivered either at the time of sale or within 30 days thereafter,
33   nor does it include a transportation protection agreement.
34       (9) "Public depositary" means a public depositary defined by RCW
35   39.58.010 or a state or federally chartered credit union.
36       (10) "Transportation protection agreement" means an agreement
37   that primarily provides for the coordination and arrangement of all
38   professional services related to the preparation of transportation
39   and subsequent transportation of human remains or cremated remains.


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1        (11) "Two-year college course" means the completion of sixty
2    semester hours or ninety quarter hours of college credit, including
3    the satisfactory completion of certain college courses, as set forth
4    in this chapter.
5        Words used in this chapter importing the singular may be applied
6    to the plural of the person or thing, words importing the plural may
7    be applied to the singular, and words importing the masculine gender
8    may be applied to the female.

 9       Sec. 3.   RCW 18.39.250 and 2012 c 206 s 2 are each amended to
10   read as follows:
11       (1) Any funeral establishment selling funeral merchandise or
12   services by prearrangement funeral service contract and accepting
13   moneys   therefore   must  establish  and   maintain   one  or   more
14   prearrangement funeral service trusts under Washington state law with
15   two or more designated trustees, for the benefit of the beneficiary
16   of   the    prearrangement   funeral   service    contract.   Funeral
17   establishments may join with one or more other Washington state
18   licensed funeral establishments in a "master trust" provided that
19   each member of the "master trust" complies individually with the
20   requirements of this chapter. A funeral establishment shall not be
21   required to trust moneys received for funeral merchandise that is
22   delivered within 30 days of the sale nor shall a funeral
23   establishment   be  required   to   trust  moneys   received  for   a
24   transportation protection agreement.
25       (2) Up to ((ten)) 20 percent of the cash purchase price of each
26   prearrangement funeral service contract, excluding sales tax, may be
27   retained by the funeral establishment unless otherwise provided in
28   this chapter. If the prearrangement funeral service contract is
29   canceled within thirty calendar days of its signing, then the
30   purchaser must receive a full refund of all moneys paid under the
31   contract.
32       (3) At least ((ninety)) 80 percent of the cash purchase price of
33   each prearrangement funeral service contract, paid in advance,
34   excluding sales tax, shall be placed in the trust established or
35   utilized by the funeral establishment. Deposits to the prearrangement
36   funeral service trust must be made not later than the twentieth day
37   of the month following receipt of each payment made on the last
38   ((ninety)) 80 percent of each prearrangement funeral service
39   contract, excluding sales tax.
                                     p. 3                          SB 5016
 1       (4) All prearrangement funeral service trust moneys must be
 2   deposited in an insured account in a commercial bank, trust company,
 3   mutual savings bank, savings and loan association, or credit union,
 4   whether state or federally chartered. The account or investments
 5   shall be designated as the prearrangement funeral service trust of
 6   the funeral establishment for the benefit of the beneficiaries named
 7   in the prearrangement funeral service contracts. The prearrangement
 8   funeral service trust shall not be considered as, or used as, an
 9   asset of the funeral establishment. All prearrangement funeral
10   service trust moneys must be invested in accordance with the
11   provisions of RCW 11.100.020 subject to the following restrictions:
12       (a) No officer or director of the funeral establishment, trustee
13   of the prearrangement trust funds, or spouse, sibling, parent,
14   grandparent, or issue of such officer, director, or trustee, may
15   borrow any of such funds for himself or herself, directly or
16   indirectly;
17       (b) No funds may be loaned to the funeral establishment, its
18   agents, or employees, or to any corporation, partnership, or other
19   business entity in which the funeral establishment has any ownership
20   interest; and
21       (c) No funds may be invested with persons or business entities
22   operating in a business field directly related to funeral homes.
23       (5) After deduction of reasonable fees for the administration of
24   the trust, taxes paid or withheld, or other expenses of the trust,
25   all interest, dividends, or growth earned by a trust become a part of
26   the trust. Adequate records must be maintained to allocate the share
27   of principal and interest to each contract. Fees deducted for the
28   administration of the trust may not exceed one percent per year of
29   the amount in trust. In no instance may the administrative charges
30   deducted from the prearrangement funeral service trust reduce,
31   diminish, or in any other way lessen the value of the trust so that
32   the services or merchandise provided for under the contract are
33   reduced, diminished, or in any other way lessened.
34       (6) Except as otherwise provided in this chapter, the trustees of
35   a prearrangement funeral service trust must permit withdrawal of all
36   funds deposited under a prearrangement funeral service contract, plus
37   accruals thereon, under the following circumstances and conditions:
38       (a) If the funeral establishment files a verified statement with
39   the trustees that the prearrangement funeral merchandise and services


                                     p. 4                          SB 5016
 1   covered by the contract have been furnished and delivered in
 2   accordance therewith; or
 3       (b) If the funeral establishment files a verified statement with
 4   the trustees that the prearrangement funeral merchandise and services
 5   covered by the contract have been canceled in accordance with its
 6   terms.
 7       (7) Subsequent to the thirty calendar day cancellation period
 8   provided for in this chapter, any purchaser or beneficiary who has a
 9   revocable prearrangement funeral service contract has the right to
10   demand a refund of the amount in trust.
11       (8) Prearrangement funeral service contracts which have or should
12   have an account in a prearrangement funeral service trust may be
13   terminated by the board if the funeral establishment goes out of
14   business, becomes insolvent or bankrupt, makes an assignment for the
15   benefit of creditors, has its prearrangement funeral service
16   certificate of registration revoked, or for any other reason is
17   unable to fulfill the obligations under the contract. In such event,
18   or upon demand by the purchaser or beneficiary of the prearrangement
19   funeral service contract, the funeral establishment must refund to
20   the purchaser or beneficiary all moneys deposited in the trust and
21   allocated to the contract unless otherwise ordered by a court of
22   competent jurisdiction. The purchaser or beneficiary may, in lieu of
23   a refund, elect to transfer the prearrangement funeral service
24   contract and all amounts in trust to another funeral establishment
25   licensed under this chapter which will agree, by endorsement to the
26   contract, to be bound by the contract and to provide the funeral
27   merchandise or services. Election of this option does not relieve the
28   defaulting funeral establishment of its obligation to the purchaser
29   or beneficiary for any amounts required to be, but not placed, in
30   trust.
31       (9) Prior to the sale or transfer of ownership or control of any
32   funeral establishment which has contracted for prearrangement funeral
33   service contracts, any person, corporation, or other legal entity
34   desiring to acquire such ownership or control must apply to the
35   director in accordance with RCW 18.39.145. Persons and business
36   entities selling or relinquishing, and persons and business entities
37   purchasing or acquiring ownership or control of such funeral
38   establishments must each verify and attest to a report showing the
39   status of the prearrangement funeral service trust or trusts on the
40   date of the sale. This report must be on a form prescribed by the
                                     p. 5                          SB 5016
 1   board and shall be considered part of the application for a funeral
 2   establishment license. In the event of failure to comply with this
 3   subsection, the funeral establishment is deemed to have gone out of
 4   business and the provisions of subsection (8) of this section apply.
 5       (10) Prearrangement funeral service trust moneys may not be used,
 6   directly or indirectly, for the benefit of the funeral establishment
 7   or any director, officer, agent, or employee of the funeral
 8   establishment including, but not limited to, any encumbrance, pledge,
 9   or other use of prearrangement funeral service trust moneys as
10   collateral or other security.
11       (11)(a) If, at the time of the signing of the prearrangement
12   funeral service contract, the beneficiary of the trust is a recipient
13   of public assistance as defined in RCW 74.04.005, or reasonably
14   anticipates being so defined, the contract may provide that the trust
15   will be irrevocable. If after the contract is entered into, the
16   beneficiary becomes eligible or seeks to become eligible for public
17   assistance under Title 74 RCW, the contract may provide for an
18   election by the beneficiary, or by the purchaser on behalf of the
19   beneficiary, to make the trust irrevocable thereafter in order to
20   become or remain eligible for such assistance.
21       (b) The department of social and health services must notify the
22   trustee of any prearrangement service trust that the department has a
23   claim on the estate of a beneficiary for long-term care services.
24   Such notice must be renewed at least every three years. The trustees
25   upon becoming aware of the death of a beneficiary must give notice to
26   the department of social and health services, office of financial
27   recovery, who shall file any claim there may be within thirty days of
28   the notice.
29       (12) Every prearrangement funeral service contract financed
30   through a prearrangement funeral service trust must contain language
31   which:
32       (a) Informs the purchaser of the prearrangement funeral service
33   trust and the amount to be deposited in the trust;
34       (b) Indicates if the contract is revocable or not in accordance
35   with subsection (11) of this section;
36       (c) Specifies that a full refund of all moneys paid on the
37   contract will be made if the contract is canceled within thirty
38   calendar days of its signing;
39       (d) Specifies that, in the case of cancellation by a purchaser or
40   beneficiary eligible to cancel under the contract or under this
                                     p. 6                          SB 5016
1   chapter, up to ten percent of the contract amount may be retained by
2   the seller to cover the necessary expenses of selling and setting up
3   the contract;
4       (e) Identifies the trust to be used and contains information as
5   to how the trustees may be contacted.

                                --- END ---




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