§ 10-14-6 - Irrevocable trust fund
O.C.G.A. 10-14-6 (2010)
10-14-6. Irrevocable trust fund
(a) (1) Each cemetery or cemetery company required to be registered by this chapter shall establish and maintain an irrevocable trust fund for each cemetery owned.
(2) For trust funds established on or after July 1, 2000, the initial deposit to said irrevocable trust fund shall be the sum of $10,000.00 and the deposit of said sum shall be made before selling or contracting to sell any burial right. No such initial deposit shall be required with respect to any cemetery for which there is an existing perpetual care account on July 1, 2000. The trust fund shall apply to sales or contracts for sale of lots, grave spaces, niches, mausoleums, columbaria, urns, or crypts in which perpetual care has been promised or guaranteed.
(3) The initial corpus of the trust fund and all subsequent required deposits shall be deposited in a state bank, state savings and loan institution, savings bank, national bank, or federal savings and loan institution, whose deposits are insured by the Federal Deposit Insurance Corporation or other governmental agency, or a state or federally chartered credit union insured under 12 U.S.C. Section 1781 of the Federal Credit Union Act, or other depository or trustee which is approved by the Secretary of State or which meets the standards contained in the rules and regulations promulgated by the Secretary of State.
(4) Each perpetual care trust fund established on or after July 1, 2000,
shall be named "The Cemetery Perpetual Care Trust Fund" with
the first blank being filled by the name of the cemetery and the second blank
being filled by the month and year of the establishment of such trust fund. If
a cemetery has a perpetual care trust fund existing on July 1, 2000, and the
perpetual care trust fund agreement permits, the cemetery may make additional
deposits to such a trust fund on the condition that the entire corpus of the
trust fund, any income earned by the trust fund, and any subsequent deposits
to the trust fund are thereafter governed by the provisions of this chapter,
the "Georgia Cemetery and Funeral Services Act of 2000," as it existed on July
1, 2000, except for the amount of the initial deposit to the trust fund. If a
cemetery owner or company elects to establish a new perpetual care trust fund
subject to the provisions of this chapter, the "Georgia Cemetery and Funeral
Services Act of 2000," as it existed on July 1, 2000, any perpetual care trust
fund which existed on July 1, 2000, is subject to the provisions of law in
effect on the date of its establishment, and deposits for sales transacted on
or after July 1, 2000, shall be deposited in the trust fund established on or
after July 1, 2000. If a cemetery existing on July 1, 2000, has an existing
perpetual care trust fund which complies with provisions of law in effect on
the date of its establishment, a new trust fund created in compliance with
this chapter shall not require an initial deposit.
(b) Whenever any burial right, cemetery lot, grave space, niche, mausoleum, columbarium, urn, or crypt wherein perpetual care or endowment care is promised or contracted for or guaranteed is sold by any cemetery, the cemetery shall make deposits to the trust fund that equal 15 percent of the sales price of the burial right or 7.5 percent of the total sales price of any mausoleums, niches, columbaria, urns, or crypts, provided that the minimum deposit for each burial right shall be $50.00; provided, further, that on July 1, 2003, and every three years thereafter, the amount of said minimum deposit shall be adjusted by the rate of change in the Consumer Price Index as reported by the Bureau of Labor Statistics of the United States Department of Labor. The Secretary of State shall adopt such adjustment to the amount of said minimum deposit by rule. Deposits to the trust fund shall be made not later than 30 days following the last day of the month in which payment therefor is made, or, in the case of a free space, the month in which the space is given. In the event any sale is made on an installment basis, not less than a pro rata share of the principal portion of each payment made and allocated to the lot, grave, space, niche, mausoleum, columbarium, urn, or crypt shall be allocated to the required trust fund deposit, provided that all deposits to the trust fund shall be completed within six years from the date of the signing of the perpetual care contract. The manner of any such allocation shall be clearly reflected on the books of the registrant.
(c) The initial $10,000.00 corpus of the perpetual care trust fund shall not be counted as part of the required periodic deposits and shall be considered to be corpus or principal.
(d) The income earned by the trust fund shall be retained by the trust fund. At such time as either:
(1) The cemetery owner is not licensed and has not been licensed for 90 or more consecutive days to sell burial rights;
(2) The cemetery is under the management of a receiver; or
(3) Less than 50 percent of available lots are unsold,
95 percent of the income from the trust fund shall be paid to the owner or receiver exclusively for covering the costs of care and maintenance of the cemetery, including reasonable administrative expenses incurred in connection therewith. The income of the trust fund shall be paid to the owner or receiver at intervals agreed upon by the recipient and the trustee, but in no case shall the income be paid more often than monthly.
(e) There shall be no withdrawals from the trust fund except pursuant to the provisions of this chapter or by court order.
(f) (1) The assets of a trust fund shall be invested and reinvested subject to all the terms, conditions, limitations, and restrictions imposed by the laws of the State of Georgia upon executors and trustees regarding the making and depositing of investments with trust moneys pursuant to Code Sections 53-8-1 through 53-8-4 of the "Pre-1998 Probate Code," if applicable, Code Section 53-8-1 of the "Revised Probate Code of 1998," or Code Section 53-12-340 of "The Revised Georgia Trust Code of 2010." Subject to said terms, conditions, limitations, and restrictions, the trustee of the perpetual care trust fund shall have full power to hold, purchase, sell, assign, transfer, reinvest, and dispose of any of the securities and investments in which any of the assets of said fund are invested, including proceeds of investments.
(2) Any state bank, national bank, or other financial institution authorized to act in a fiduciary capacity in this state, which presently or in the future serves as a fiduciary or cofiduciary of the trust fund of a perpetual care cemetery, may invest part or all of such trust fund held by it for investment in interests or participation in one or more common trust funds established by that state bank, national bank, or other financial institution for collective investment, if such investment is not expressly prohibited by the instrument, judgment, decree, or order creating the fiduciary relationship and if, in the case of cofiduciaries the trust institution procures the consent of its cofiduciary or cofiduciaries to such investment, and notwithstanding the fact that such common trust funds are not invested and reinvested subject to all the terms, conditions, limitations, and restrictions imposed by the laws of the State of Georgia upon executors and trustees in the making and disposing of their investments.
(3) Notwithstanding any other provision of this subsection, the Secretary of State shall establish rules and regulations for investments of a trust fund established on or after July 1, 2000, or otherwise governed by this chapter, the "Georgia Cemetery and Funeral Services Act of 2000," as it existed on July 1, 2000, as necessary to preserve the corpus and income of such a fund and for determining what restrictions are necessary for such purpose.
(4) At any time, in the event that the perpetual care trust fund contains an amount less than the amount required by this Code section, the cemetery owner shall, within 15 days after the earlier of becoming aware of such fact or having been so notified by the Secretary of State, deposit into the perpetual care trust fund an amount equal to such shortfall. In the event that the Secretary of State and the cemetery owner disagree regarding the amount of such shortfall, no penalty shall be imposed upon the cemetery owner for any failure to comply with this paragraph unless such failure occurs after notice and opportunity for a hearing as provided in Code Section 10-14-23.
(g) Moneys of the perpetual care trust fund shall not be invested in or loaned to any business venture controlled by the cemetery owner, a person who owns a controlling interest of a cemetery owner that is not a natural person, or an affiliate of any of these persons or entities.
(h) The trustee shall furnish yearly to the Secretary of State a financial report in a form designated by the Secretary of State with respect to the perpetual care trust fund.
(i) Upon a finding by a court of competent jurisdiction of failure to deposit or maintain funds in the trust account as required by this chapter or of fraud, theft, or misconduct by the owners of the cemetery or the officers or directors of a cemetery company which has wasted or depleted such funds, the cemetery owners or the officers or directors of a cemetery company may be held jointly and severally liable for any deficiencies in the trust account as required in this chapter.