Digging for Answers 1/12/2011

Digging for Answers -- WHAT IS PERPETUAL CARE?
by Randy Seaver

Welcome to the Digging for Answers column on the Graveyard Rabbit Online Journal.

This column will depend on your submission of questions about cemeteries, gravestones, burial practices, and other topics that concern a Graveyard Rabbit (other than where his next carrot is coming from!). So please send some questions to the editor, who will pass them along and keep the columnist hopping.

Question:  What is perpetual care of graves in cemeteries?

Answer:  By definition, "perpetual care" means "means the care and maintenance and the reasonable administration of the cemetery grounds and buildings at the present time and in the future."  Some cemeteries have sections designated for perpetual care while other sections are not so designated.  "Endowment care" is a synonymous term for "perpetual care" used in some states.

Perpetual care of graves in cemeteries is usually covered by the fees paid by the owners of the burial plots - a certain percentage of the fees go into an investment trust fund held by the cemetery and the perpetual care needs are funded by the interest accrued on the trust fund itself, and the cemetery should not touch the principal. 

In perpetual care cemetery sections, the cemetery is supposed to do the routine maintenance and landscaping around the gravesites, the grass mowing, the leave raking, the tree and bush trimming, road maintenance, water line and drain repair, etc.  using the interest income from the investment trust funds.  Sometimes, the cemetery uses the principal investment for other reasons, or a sexton or other cemetery employee absconds with the funds.

Apparently, there is no federal law governing maintenance and care of cemeteries.  Title 26 of the Internal Revenue Service code has guidelines for cemeteries - paragraph § 1.642(i)-1 Certain distributions by cemetery perpetual care funds and paragraph § 1.642(i)-2 Definitions. It describes how states and other jurisdictions should operate perpetual care cemeteries and how contributions to them should be handled.

There are laws in every U.S. state that define how cemeteries should operate.  They vary from state to state.  For your specific state, I suggest that you use an online search engine to search for [cemetery law statename] and then search for "perpetual" or "endowment" on the site.

For instance, the Georgia law governing perpetual care [O.C.G.A. § 10-14-6, http://sos.georgia.gov/Securities/perpetual_care_cemetery.htm#Perpetual Care Trust Fund] says:

"Each perpetual care cemetery must establish and maintain an irrevocable trust fund. An initial deposit of $10,000.00 must be made before selling or contracting to sell any burial right. See O.C.G.A. § 10-14-6. The trust fund applies to sales or contracts for sale of lots, grave spaces, niches, mausoleums, columbaria, urns, or crypts in which perpetual care has been promised or contracted for or guaranteed. See O.C.G.A. § 10-14-6(b). The cemetery must make deposits to the trust fund that equal 15 percent of the sale price of the burial right or 7.5 percent of the total sales price of any mausoleums, niches, columbaria, urns, or crypts, provided that the minimum deposit for each burial right must be $55.75 effective July 1, 2006. The minimum deposit rate is adjusted every three years according to the consumer Price Index. See O.C.G.A. § 10-14-6(b). Deposits to the trust fund must be made no later than 30 days following the last day of the month in which payment is received, or, in the case of a free space, the month in which the space is given."

A search for California's laws about perpetual or endowment care resulted in a long search to find the text of Senate Bill 1490, enacted in 2006.  It doesn't provide specific requirements, only requires the existing Cemetery and Funeral Bureau to adopt further regulations concerning endowment care. 

In Illinois, the Illinois Cemetery Perpetual Trust Authorization Act (see http://ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2135&ChapterID=61) seems to be the operative law at this time.  The recently passed Cemetery Care Act (see http://codes.lp.findlaw.com/ilstatutes/760/100) provides endless definitions and requirements for cemeteries to follow. 

A layman, like this graveyard rabbit,. finds it nearly impossible to discern actual requirements from these legal sites.

There may be problems with perpetual care requirements for some cemeteries.  The section on "Maintenance Funds: on the USLegal.com website (http://cemeteries.uslegal.com/cemetery-maintenance/maintenance-funds/) notes:

"The flow of funds becomes an obvious problem when the cemetery is full and no additional plots can be sold. At that point the cemetery must rely only on investment returns to cover maintenance costs. But this under-funding is a problem for other stakeholders at other times, too. Plot owners and relatives need to be assured that perpetual maintenance funds do not run out of money and that cemetery owners will not be coming back to the descendants asking for funds for upkeep."

This rabbit is not sure that "perpetual care" really means "forever" in reality!