California Code of Civil Procedure 1518.5 – (a) Subject to Section 1510, funds maintained in a preneed …
(a) Subject to Section 1510, funds maintained in a preneed funeral trust or similar account or plan escheat to the state if, for more than three years after the funds became payable and distributable pursuant to subdivision (b), as established from the records of the funeral establishment or trustee, the beneficiary or trustor has not corresponded electronically or in writing concerning the property or otherwise indicated an interest, as evidenced by a memorandum or other record on file with the funeral establishment or trustee.
(b) For the purposes of this section, the corpus of a preneed funeral trust or similar account or plan, together with any income accrued, less a revocation fee not to exceed the amount reserved pursuant to § 7735 of the Business and Professions Code, becomes payable and distributable under any of the following circumstances:
Terms Used In California Code of Civil Procedure 1518.5
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Escheat: Reversion of real or personal property to the state when 1) a person dies without leaving a will and has no heirs, or 2) when the property (such as a bank account) has been inactive for a certain period of time. Source: OCC
- Holder: means any person in possession of property subject to this chapter belonging to another, or who is trustee in case of a trust, or is indebted to another on an obligation subject to this chapter. See California Code of Civil Procedure 1501
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: means any individual, business association, government or governmental subdivision or agency, two or more persons having a joint or common interest, or any other legal or commercial entity, whether that person is acting in his or her own right or in a representative or fiduciary capacity. See California Code of Civil Procedure 1501
- Personal property: All property that is not real property.
- Personal property: includes money, goods, chattels, things in action, and evidences of debt. See California Code of Civil Procedure 17
- Property: includes both personal and real property. See California Code of Civil Procedure 17
- State: includes the District of Columbia and the territories when applied to the different parts of the United States, and the words "United States" may include the district and territories. See California Code of Civil Procedure 17
- Trustee: A person or institution holding and administering property in trust.
- Trustor: The person who makes or creates a trust. Also known as the grantor or settlor.
- Writing: includes printing and typewriting. See California Code of Civil Procedure 17
(1) The beneficiary of the trust attained, or would have attained if living, 105 years of age.
(2) Forty-five years have passed since execution of the preneed funeral agreement.
(3) The holder received notification of the death or presumed death of the beneficiary and has not provided the contracted funeral merchandise or services.
(4) The preneed funeral trust is a preneed installment trust and the amount due to the funeral establishment from the trustor has not been paid during the three preceding years and neither the trustor nor the beneficiary has communicated with either the funeral establishment or the trustee about the preneed funeral installment trust during that three-year period.
(c) For purposes of this section, except subdivision (d), the funeral establishment obligated to provide preneed funeral services under the trust or similar account or plan is the holder. For purposes of subdivision (d), the trustee is the holder.
(d) (1) All funds, including accrued income and revocation fees reserved pursuant to § 7735 of the Business and Professions Code, maintained in a preneed funeral trust or similar account or plan held by a trustee for a funeral establishment that has been dissolved, closed, or had its license revoked shall escheat to the state if unclaimed by the funeral establishment, beneficiary, trustor, or legal representative of either the beneficiary or trustor within six months after the date of final distribution or liquidation.
(2) Notwithstanding paragraph (1), the revocation fee pursuant to § 7735 of the Business and Professions Code shall not be retained by the funeral establishment.
(e) Escheatment of preneed funeral trust funds to the Controller shall release the funeral establishment from the obligation of furnishing the personal property, funeral merchandise, or services originally arranged in the preneed funeral agreement associated with the trust. However, if the funeral establishment provided personal property, or funeral merchandise or services to the beneficiary after funds have escheated, the funeral establishment shall be entitled to recover the escheated funds upon submission to the Controller of a death certificate and a statement detailing the personal property or funeral merchandise or services provided pursuant to Section 1560.
(f) Nothing in this section, or any other law or regulation, shall require escheatment of any funds received by a funeral establishment, cemetery, or other person from property or funeral merchandise or services provided under Chapter 4 (commencing with Section 8600) of Part 3 of Division 8 of the Health and Safety Code.
(g) A trustee or a funeral establishment shall not charge the trust, a trustor, or a beneficiary any fees or costs associated with a search or verification conducted pursuant to this section. However, a trustee or funeral establishment may incorporate fees or costs associated with a search or verification as part of the administration of the trust pursuant to § 7735 of the Business and Professions Code.
(h) Delivery of the corpus of the trust, and the income accrued to the trust, to the funeral establishment, the trustor, the beneficiary, or the Controller pursuant to this article shall relieve the trustee of any further liability with regard to those funds.
(i) This section shall become operative on January 1, 2023.
(Added by Stats. 2021, Ch. 514, Sec. 5. (AB 293) Effective January 1, 2022. Operative January 1, 2023, by its own provisions.)