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NOVEMBER 2014
FUNERAL HOME & CEMETERY NEWS
S ec t i on A
By Atty. Harvey I. Lapin
Harvey I. Lapin, P.C., is a member of the Illinois Bar and Florida Bar. He
is a member of the faculty at the John Marshall Law School in Chicago
and is presently teaching the subject of Tax Exempt Organizations. He is
also associated with Florida-based law firm Sachs, Sax & Caplan, leading
the firm’s Funeral, Cemetery and Cremation Practice Group.
He has written numerous articles on the subject of taxation, funeral
and cemetery law.
The subject discussed in this article and future articles resulted from
the questions from readers. If you have any questions about the top-
ics covered in this column or in obtaining professional assistance, please
contact the author c/o Harvey I. Lapin, 2592 Chedworth Ct, Northbrook,
Illinois 60062. Phone (847)509-0501 or fax to (847)509-1027.
`The author wrote articles for the Cemetery and Funeral Business
and Legal Guide (“Guide”) that have been published by CB Legal
Publishing Corporation since 1970. The Editor of the Guide recent-
ly announced the suspension of this publication. However, CB Legal
Publishing Corporation also publishes the Release Form Kit, which was
prepared by the author and has been recently updated and revised by
the author. The publication of the Release Form Kit will be continued.
This Kit contains Release and Hold Harmless forms for Funeral Homes,
Cemeteries and Crematories to use in situations where it has resolved
a complaint with a customer, and wants to be sure that there will be
no further action by the customer or their relatives. The forms can
now be purchased in an electronic format. Anyone interested in pur-
chasing the forms can contact Cheryl Lapin, at the address of CB Legal
Publishing Corporation, 2592 Chedworth Ct, Northbrook, Illinois
60062. The author also continues to practice law and can be contact
by phone at 847-334-1983.
Legal
Speak
Time to Check and Update
Required Forms
The author recently has been involved in several transac-
tions involving the sale or purchase of businesses in the in-
dustry. One of the requirements of any transaction is the
representation by the seller that all of the contracts and
forms used in the business are in compliance with the laws.
Of course a seller will only want to represent that it is to the
best of their knowledge the contracts and forms are in com-
pliance. A buyer, however, wants an unlimited representa-
tion to be sure there will not be any future problems with
consumers or a state regulatory agency.
Whether you are planning on continuing to operate the
business or selling, one of your resolutions for the upcoming
New Year should be to review and update all of the forms that
you use in your business. Of course, state and federal laws and
regulations require some of these forms. Typically a form that
is required must also comply with the format, type sizes and
contain the disclosures required by the law or regulations.
All industry members should review the at need forms that
they customarily use. The first step is to review the laws and
regulations that apply to your business and require forms. If an
industry member sells on a pre-need basis they should review
the pre-need laws that apply in their states. These laws are some-
times revised by a state legislature, so there may be some recent
changes that go into effect in the upcoming year. There usually
are different requirements in cemetery and funeral pre-need laws
so that industry members that engage in both segments should
be careful to comply with the applicable laws and regulations.
Illinois, for example, has two separate pre-need laws. These
laws are similar to laws in other states. The Illinois Preneed
Cemetery Sales Act (“Sales Act”) applies to cemetery pre-
need sellers and the Funeral or Burial Funds Act (“Funer-
al Act”) applies to pre-need funeral sellers. Some licensees
sell products and services that are covered by both laws. The
Sales Act requirements are substantially as follows:
fice and is available to Licensees. Both Acts also require a
Seller to explain the terms of a Contract and it is required
the consumer confirm they have received this information
by initialing a statement in the contract.
If you are selling on a preneed basis and allowing a con-
sumer to pay in four or more installments, even if interest is
not charged, most state consumer credit laws and the Fed-
eral Credit Law requires that specific disclosures be made.
The failure to comply with the requirements of these var-
ious laws and regulation can cause a contract to be void-
able and also subject a seller to penalties. Some state asso-
ciations have written material that is available to members
or can be purchased that explains the requirements of
some of these laws. Complying with other laws may re-
quire a consulting a lawyer for assistance.
Since the laws of the states can differ, every reader should
check the laws and any regulations issued in their own
state to determine if any special requirements apply to
their businesses. It has been the author’s experience that
the failure to comply can be expensive as a buyer might
reduce the price paid for a business because of violations.
Also if there is a complaint filed against a business it is
standard practice for a regulatory agency to review the
documents to make sure they are in compliance with any
requirements of state and federal law.
1. The contract must be in writing and in 11-point type ex-
cept that some of the disclosures must be in 12-point type;
2. The contract must state the name and address of the seller
and the provider and the relationship between the seller
and provider;
3. All contracts entered into under the Sales Act must be
guaranteed and there is a specific disclosure that must be
in the contract;
4. The contract must disclose any penalties and restrictions;
5. The contract must disclose how if the merchandise, spac-
es and services purchased are not available at the time re-
quired, the seller must provide merchandise, spaces and
services that are similar in style and equal in quality.
6. If the contract allows the seller to deliver the merchan-
dise to a bonded warehouse or install on site as provided
in the Sales Act, then specific disclosures must be in the
Contract.
7. The contract must disclose the relationship among the en-
tity funding the preneed funeral contract, the provider
and the seller.
8. The Seller must explain the terms of the Contract before it
is signed and a purchaser must confirm they received the
explanation.
The Funeral Act requirements are substantially as follows:
1. The contract must be in writing and in 11-point type, ex-
cept that some of the disclosures must be in 12-point type;
2. The contract must state the name and address of the seller
and the provider or that the provider will be selected at the
time the services and merchandise are provide;
3. The contract must state whether the contract price is guar-
anteed or not guaranteed;
4. The contract must disclose any penalties and restrictions;
5. The contract must disclose how if the merchandise, ser-
vices purchased are not available at the time required, the
seller must provide merchandise and services that are simi-
lar in style and equal in quality of material and workman-
ship.
6. The contract must disclose how the preneed funeral con-
tract will be funded;
7. The contract must disclose the relationship among the en-
tity funding the preneed funeral contract, the provider
and the seller.
8. The contract must disclose the method of changing or se-
lecting the designation of a provider; and
9. The contract must disclose the impact on the purchaser if
there are (i) changes in the funding mechanisms; (ii) pen-
alties for failure to make payments; (iii) penalties resulting
from cancellation; and (iv) information on obligations or
entitlements if there is a difference between proceeds of
the funding arrangement and the actual cost needed to
pay for the merchandise or services at need.
Both Acts require a Seller to distribute an explanatory booklet
that has been prepared by the Illinois State Comptroller’s Of-
but societal history as well. The book concludes with
Frank’s message about the crisis of our current times
and his hopes for a bright future.
Author Frank Sturtevant Waterman III was born in
Boston in 1921 and grew up in Chestnut Hill, MA.
He was educated at the Rivers School, Nobles and Gre-
enough School, Harvard College, Babson Institute of
Business Administration and
New England Institute.
As
an entrepreneur in his own rite, Frank not only served as
the CEO and director of
J.S. Waterman and Sons,
but
was a general partner of Waterman Realty Management.
At 92 years of age, Frank has a colorful history and
many insights to share with the reader. A lifespan of
more than nine decades has overlapped with the bet-
ter part of the American Century, a period when this
nation rose to become a beacon for the rest of the
world: a symbol of the triumph of good over evil; lib-
erty over tyranny; faith over cynicism.
Frank’s life and observations yield a message to this
great country about the crisis of our times: the wan-
ing light of American Exceptionalism. It is an espe-
cially timely message as we approach the 2014 mid-
Waterman Family Business Chronicled in New Book
Frank Sturtevant Waterman III
CHATHAM,MA AND STUART,FL—
Frank Sturtevant
Waterman III,
a West Chatham, MA and Stuart, FL
resident and patriarch of a family that has both ex-
perienced and impacted the growth of America, had
mulled this book in his head for several decades. After
three years of research and compilation,
“378 Years
in America.
The Watermans from 1636, The Funeral
Business from 1832
and the
Future of America in the
New World”
has been published by
Bespoke History
of Sturbridge, MA and is available as a handsome,
136 page, fully illustrated, full color book.
Frank is fourteen generations removed from the first
Waterman to arrive in America.
Robert Waterman
sailed to the New World in 1636 aboard the Spar-
row,
which left the same Dutch port city from which the
Pilgrims sailed in 1620.
Joseph Sampson Wa-
terman
established one of
the earliest funeral service
operations in the mid-
19th
century.
The Wa-
terman funeral business,
with locations through-
out Greater Boston, was
among the most highly
regarded in the country.
Frank was the last Water-
man to serve as president
of the business.
The volume chron-
icles not only a fami-
ly and business history,