Facts Exposed in Sacramento Funeral Funding Controversy
By Paul Larson
MILLBRAE Ive been getting calls and inquiries from families asking what I know about the California Master Trust controversy that has recently been circulating in the news. This topic sparks a bit of fear into those who may have set funeral / cremation funds aside using California MasterTrust. Ive been receiving various updates from those in-the-know at the California Funeral Directors Association in Sacramento, and in a letter to a concerned family I wrote the following:
Regarding the audit of California Master Trust (CMT): This audit has been going on between the State and CMT since 2007 and is not considered unusual. CMT is among a number of options used to hold pre-need funds designated for future funeral or cremation costs (like a bank account or insurance policy). The information that the auditor released to the newspapers was pre-mature and unnecessarily alarmed the public. I spoke directly to Robert Achermann with the California Funeral Directors Association in Sacramento and was told that CMT has always been a reliable organization and continues to be. Any details that were mentioned in the newspaper were about funds that CMT saw as legally used according to the way the trust was set up 25 years ago. All funds relating to funeral costs are still being held safely and as normal are released upon request. In reality this is a non-issue, and the discrepancy between CMT and the auditor is currently being worked out between the attorneys. CMTs purpose is to hold funds designated for costs necessary at the time of death, and CMT wishes to abide by any rules that ar necessary. This audit does not directly involve any funeral homes or cremation societies.
When ever a family wishes to make funeral or cremation arrangements in advance (referred to as a Pre-Need arrangement) they have the option to pay for our services and merchandise also in advance. As customary this pre-payment in-full locks most costs in at todays prices which helps to avoid any future price increases or inflation. Since the law states that money can not be accepted for services that havent been provided yet then any funds must be held for future use and thats where organizations like California Master Trust come into the picture. At the time of death California Master Trust will release the funds that were held, and those funds are used for the funeral or cremation expenses.
I hope this clears up any misconceptions that have been floating around. When ever news is reported using partial info I get calls from families whove been panicked for no reason.
If you ever wish to discuss cremation, funeral matters or want to make preplanning arrangements please feel free to call me and my staff at the CHAPEL OF THE HIGHLANDS in Millbrae at (650) 588-5116 and we will be happy to guide you in a fair and helpful manner. You may also visit us on the internet at www.chapelofthehighlands.com.