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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 6240 August 2, 1984 CEMETERIES: Merchandise trust requirements applicable to pre-need sale of catafalque Pre-need sale of a catafalque by a cemetery is subject to the merchandise trust requirements of the Cemetery Regulation Act, 1968 PA 251. Honorable Arthur Miller, Jr. State Senator Capitol Building Lansing, Michigan You have requested my opinion whether the pre-need sale of a catafalque unit by a cemetery is subject to the escrow requirements of 1954 PA 70, as last amended by 1982 PA 366; MCLA 328.201 et seq; MSA 14.527(1) et seq. 'Pre-need' is a term defined in the administrative rules, 1979 MAC, R 456.101(k), to mean 'interment rights, cemetery merchandise or services sold to a purchaser before time of death.' A catafalque unit is an object which functions as a casket liner, and as the bottom part of a vault. It may be purchased from a funeral establishment or a cemetery. Its use was described in OAG, 1979-1980, No. 5461, p 77, 79 (March 9, 1979) as: 'a repository for a dead body which functions as both a casket and a valut. The body is laid directly into a fiberglass or similar container which functions as the casket liner and the bottom part of the vault. A metal or wood device designed to give the appearance of a casket covers the fiberglass unit until the body is ready for interment or cremation. At that time the outer device is removed and a fiberglass vault cover is installed. The outer device is then reused.' 1954 PA 70, supra, Sec. 1, regulates prearranged funeral plan accounts, which are contracts for the final disposition of human bodies: 'All payments made under an agreement providing for the final disposition of a dead human body, as consideration for the purchase of caskets or other personal property, excluding burial space in a cemetery, or services, excluding perpetual care of burial space in a cemetery, which are only to be delivered or performed after the death of the person for whose benefit the agreement is made, shall remain intact as a fund until the death of the person for whose benefit the agreement is made. A deposit made pursuant to this section shall be released upon demand of the person making the deposit unless an irrevocable agreement has been made under section 2. The funds shall be deposited within 7 days after receipt with a state or national bank, a state or federal savings and loan association, or a state or federally chartered credit union, and shall be held in an account for the person for whose benefit the fund was established as a prearranged funeral plan account. A certified copy of the certificate of death or other evidence of death satisfactory to the depository shall be furnished to the depository as evidence of death, and the depository immediately shall pay the funds and accumulated interest or dividends, if any, to the person entitled to the funds under the agreement. The payment of the funds and accumulated interest or dividends pursuant to this section shall relieve the depository of any further liability for the funds or interest or dividends.' (Emphasis added.) By its terms, 1954 PA 70 is applicable solely to prearranged funeral plan accounts 'providing for the final disposition of a dead human body.' In Michigan, a practitioner of mortuary science is the only person authorized to provide for the final disposal of dead human bodies. (1) A cemetery may not enter into any catafalque agreement providing for the final disposition of the human body. When a cemetery sells a catafalque unit to be delivered in future time of need it may agree to do no more than furnish a catafalque unit. It has no authority to direct a funeral or to do any of the things necessary to prepare a body for burial. The fact that the deceased purchased a catafalque unit does not mean that a dead human body may be interred without any further preparation or without making any further purchase of services. A December 27, 1971 letter opinion addressed to Mr. Burton Yungfer, Secretary, State Cemetery Commission, discussing the application of 1954 PA 70, supra, to the pre-need sale of vaults by a cemetery stated: '[1954 PA 70] was not designed nor was it the intent of the Legislature that it apply to isolated sales of merchandise. The Legislature was attempting to regulate the offering of so-called pre-paid funerals where the offeror provided everything including mortician's services, caskets, vaults, cemetery lots and a funeral for an agreed-upon price. Obviously, the mere sale of a cemetery vault is quite different from what the Legislature had in mind.' The letter opinion went on to hold: '[T]he sale of pre-need vaults by a cemetery is not an agreement to provide for the final disposition of a dead body. Therefore, the answer to your second question is that a cemetery is not required to deposit 100% of the purchase price of the burial vault to a fund as required by 1954 PA 70 because that act has no application to such a sale.' Subsequently, a letter opinion issued to Representative William L. Jowett, dated April 9, 1980, addressed the application of 1954 PA 70, supra, to the sale of the catafalque units by a funeral establishment or a cemetery. The opinion stated: 'The burial system described in OAG, 1979, No. 5461, supra, includes a catafalque or covering which gives the appearance of a casket, an inner liner in which the body is placed, and a vault in which the inner liner is placed at the time of burial at the cemetery.' With respect to a catafalque sale by a funeral establishment, the opinion held: 'When all or any portion of this casket/vault system is sold by a funeral association as part of a pre-arranged funeral plan, the requirements of 1954 PA 70, supra, are applicable. Thus, a funeral association must deposit 100% of the proceeds of the sale of a pre-need casket/vault system into a trust account as required by 1954 PA 70, Sec. 1, supra.' The opinion went on to hold that only the vault portion of the catafalque system described in OAG, 1979-1980, No. 5461, supra, is cemetery merchandise, and thus subject to the trust deposit requirements of the Cemetery Regulation Act, 1968 PA 251, as last amended by 1982 PA 132; MCLA 456.521 et seq; MSA 21.820(21) et seq. This is because the law treats the sale of a catafalque sold by a cemetery differently than when sold by a funeral establishment. 1968 PA 251, supra, Sec. 2(1), defines 'cemetery merchandise' as follows: "Cemetery merchandise' means all merchandise sold to the public by a cemetery, including vaults, concrete boxes, monuments, memorials and foundations.' (Emphasis added.) A cemetery selling merchandise is subject to the merchandise trust account provisions found in section 16 of the Cemetery Regulation Act, supra. '(2) A cemetery which is required to register pursuant to this act and an agent which is authorized by a cemetery or acting on its behalf under an agreement or sales contract to sell cemetery merchandise or cemetery services shall establish a merchandise trust account and deposit a percentage of the gross proceeds received from the sales as determined by the commissioner. The merchandise trust account shall be maintained exclusively for the deposit of the money into a bank or trust company located in this state under the terms of a written trust agreement approved by the commissioner. The funds shall be deposited not later than the month following their receipt. '(3) The total deposits to a merchandise trust for the sale of cemetery burial vaults or other outside containers, other than crypts installed underground and sold as part of a cemetery lot, shall at all times be not less than the greater of $100.00 per vault or outside container or 130% of the total costs of the containers covered by the trust. Money deposited in connection with a sale shall be repaid within 30 days upon written demand of purchaser. A burial vault shall be installed only at need or by separate written authorization of the purchaser. The cemetery shall have the right to withdraw the amount on deposit for the delivered vault or outside container.' (Emphasis added.) However, 1954 PA 70, supra, requires that in the sale of a prearranged funeral plan, all payments must be placed in trust until the death of the purchaser, the Cemetery Regulation Act, supra, requires only that the greater of $100.00 or 130% of the total cost of the burial container be covered by the trust. It is my opinion, therefore, that the pre-need sale of a catafalque unit by a cemetery is not subject to the 100% escrow deposit requirement of 1954 PA 70, supra, because a cemetery may not make an agreement for the final disposition of a dead human body. It is my further opinion that a cemetery may make a pre-need sale of a catafalque unit as cemetery merchandise, which sale is instead subject to the merchandise trust deposit requirements of 1968 PA 251, supra. Frank J. Kelley Attorney General (1)
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