NRS 689.565 Prepaid contracts: Distributions to seller from trust fund; required amounts for reserve and liabilities in trust fund; filing of financial reports by trustee; fee and penalty related to such reports; determination of total value of trust.

520 words·~2 min read·/nv/chapter-689-funeral-and-burial-services/689-565·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

1. Not more than 60 percent of the earnings of such investments, including capital gains, as they accrue and are received, may be disbursed by the trustee to the seller or his or her designee. The remainder of any earnings must be held by the trustee to establish a reserve for securities valuation until the reserve equals 40 percent of the total trust liabilities.

2. The trustee shall maintain in the trust fund an amount of money equal to 125 percent of the total trust liabilities.

3. If money in the trust fund is invested or reinvested in:

(a)Securities which are issued or guaranteed by the United States of America;

(b)Bonds of this state or the bonds of any other state;

(c)Bonds of counties or municipalities of any state;

(d)Deposits in any bank, credit union, savings and loan association or savings bank that is federally insured or insured by a private insurer approved pursuant to NRS 672.755 ; or

(e)With the written approval of the Commissioner, any investment which has guaranteed liquidity,

Ê then no earnings of those investments, including capital gains, if any, as such earnings accrue and are received, may be disbursed by the trustee to the seller or his or her designee which would reduce the corpus of the trust fund below 100 percent of the required value of the trust. Earnings in excess of 100 percent of the required value of the trust or 125 percent of the total trust liability, whichever is appropriate, may be distributed annually.

4. Earnings are defined as any sum remaining in the trust fund after deducting costs of administration over and above 100 percent of the required value of the trust.

5. Every trustee handling money in a trust fund pursuant to NRS 689.450 to 689.595 , inclusive, shall file with the Commissioner, within 15 days after the first day of each calendar quarter, a financial statement showing the activity of all trusts required to be maintained by any seller and the total market value of each trust as of the first day of the calendar quarter. The statement for the fourth quarter must be a summary of all transactions involving the account. The statement must be on forms prescribed and adopted by the Commissioner.

Every quarterly report must be accompanied by a fee of $10. If the statement is not received by the Commissioner as required, the Commissioner may, after giving the seller 10 days’ written notice, revoke the seller’s permit.

6. The trust must be valued quarterly and averaged annually to determine the total value of the trust. If the average market value of the trust as of December 31 of each year is below 100 percent of the required value of the trust or 125 percent of the total trust liability, the Commissioner may suspend the seller’s permit until the deficiency is made up.