Section 453. Moneys paid in connection with agreements for funeral merchandise or services in advance of need to be kept on deposit pending use or repayment

1. (a) Any and all moneys  paid  to  a  funeral  firm,
  funeral  director,  undertaker,  cemetery,  or any other person, firm or
  corporation, under or in connection with an agreement, or any option  to
  enter  into  an  agreement,  for  the  sale of merchandise to be used in
  connection with a funeral or burial, or for the furnishing  of  personal
  services of a funeral director or undertaker, wherein the merchandise is
  not to be actually physically delivered or the personal services are not
  to be rendered until the occurrence of the death of the person for whose
  funeral or burial such merchandise or services are to be furnished shall
  continue  to be the money of the person making such payment and shall be
  held in trust for such person by the  funeral  firm,  funeral  director,
  undertaker,  cemetery  or  any other person, firm or corporation to whom
  such payment is made and shall, within ten business days of receipt,  be
  deposited  in  an  interest  bearing  account  in a bank, national bank,
  federal savings bank, federal  savings  and  loan  association,  savings
  bank,  savings  and  loan  association,  credit union, or federal credit
  union within the state and duly authorized to receive  deposits  in  the
  state of New York and which shall earn interest at a rate which shall be
  at  not  less  than the prevailing rate of interest earned by other such
  deposits in such banks, savings banks, savings and loan associations, or
  credit unions under this section, or shall be placed in a trust  company
  in an investment backed by the government of the United States and shall
  not  be  commingled  with  other  moneys  of  the  funeral firm, funeral
  director, undertaker, cemetery, or other person, firm or corporation  or
  become  the  funds  of  the  funeral firm, funeral director, undertaker,
  cemetery, or other person, firm or corporation, and shall be so held  on
  deposit,  together with any interest thereon, until said merchandise has
  been actually physically delivered and said personal services have  been
  rendered,  unless  sooner  repaid, in whole or in part. No funeral firm,
  funeral director, undertaker, cemetery or  any  other  person,  firm  or
  corporation,  shall  discharge  the  obligation  established  under this
  section to deposit or place money with a bank,  national  bank,  federal
  savings  bank,  federal  savings  and  loan  association,  savings bank,
  savings and loan association, credit  union,  federal  credit  union  or
  trust  company within the state through a surety bond or other financial
  instrument unless expressly provided under this section.
    (b) Such funeral firm,  funeral  director,  undertaker,  cemetery,  or
  other  person,  firm  or  corporation  which received such moneys shall,
  within thirty business days after the  deposit  or  any  change  in  the
  institution   in   which  such  funds  are  deposited,  provide  written
  notification to the person who made such payment of the  institution  of
  the  deposit  and,  until  such  moneys have been repaid or the personal
  services and merchandise have been provided, shall annually provide  the
  person  who  made such payment with a statement identifying the location
  and annual interest earned by the account.
    (c) Upon request of the person who made such payment, or  his  or  her
  representative, the funeral firm, funeral director, undertaker, cemetery
  or  other  person,  firm or corporation which received such moneys shall
  provide a statement within thirty days of such request  identifying  the
  location  of  the account, amount of such account and interest earned on
  such account. Upon the provision of any merchandise or personal services
  in connection  with  any  such  agreement,  the  funeral  firm,  funeral
  director,  undertaker,  cemetery  or  other  person, firm or corporation
  which received such moneys  shall  provide  a  statement  itemizing  the
  merchandise   or  personal  services  provided  and  the  cost  of  such
  merchandise or personal services and describing the disposition  of  all

  moneys  in  the  account.  Copies  of such statements and the records on
  which they are based shall be made available for inspection and shall be
  made available during ordinary business hours for copying  upon  written
  request  by  any  state  agency  regulating  the  funeral  firm, funeral
  director, undertaker, cemetery or  other  person,  firm  or  corporation
  which received such money or enforcing the requirements of this section,
  provided  a  complaint, either oral or written, has been received, or an
  inspector has grounds to believe that serious or  repeat  violations  of
  this section have occurred.
    (d) Moneys paid for such an agreement for an applicant or recipient of
  supplemental  security income benefits under section two hundred nine of
  the social services law or of medical  assistance  under  section  three
  hundred  sixty-six  of such law shall be placed into a trust which shall
  be irrevocable but under which  such  applicant/recipient  reserves  the
  right to select any funeral firm, funeral director, undertaker, cemetery
  or  any  other  person, firm or corporation to whom such payment is made
  and to change such selection any time to any  type  of  funeral  or  any
  funeral  firm,  funeral  director, cemetery or any other person, firm or
  corporation to whom such payment is made, located in the  state  of  New
  York  or any other state. Any such change must be carried out within ten
  business days following receipt of a request by  the  purchaser  to  the
  funeral  firm,  funeral  director, cemetery or any other person, firm or
  corporation to whom such payment is made,  with  which  such  trust  was
  established.  This  requirement  is  subject  to any limits set forth in
  federal law or regulation pertaining to disregarded resources or income.
    2. The amount of any and all moneys paid under or in  connection  with
  such an agreement, together with interest, if any, accrued thereon while
  on deposit as so required shall be repaid on demand at any time prior to
  the  delivery  of  the  merchandise and/or the rendering of the personal
  services. No administrative, consultation or other fee may  be  assessed
  against  the  person  making such payment in connection with or planning
  for such agreement. Provided, however, neither the applicant,  recipient
  or  other  purchaser  of  preneed  funeral  goods or services through an
  irrevocable trust, their legal representative  nor  the  heirs  of  such
  person,  shall  be entitled to any repayment of the moneys which created
  such trust.
    3. Any such agreement must be in writing and must:
    (a) Identify all moneys paid or to be paid; and
    (b) Identify any fees paid to the person administering such trust fund
  by a third party, provided, however, any  such  fees  shall  not  exceed
  seventy-five hundredths of one percent of the amount of such trust fund;
  and
    (c)  Except  for  an irrevocable trust established pursuant to section
  two hundred nine  of  the  social  services  law  or  paragraph  (d)  of
  subdivision  one  of this section, notify the person making such payment
  of his or her right to be repaid  moneys  paid,  together  with  accrued
  interest,  as  described  in  this  section  and  of his or her right to
  receive an annual statement; and
    (d) Identify the provider of each service or item  of  merchandise  to
  the extent agreed upon, and fully describe the service or merchandise to
  the extent agreed upon; and
    (e) Describe the obligations of each party:
    (i) in the event the service or merchandise described in the agreement
  cannot,  for reasons beyond the control of the parties, be provided when
  needed;
    (ii) in the event the cost of such services or merchandise, when  such
  services  or  merchandise  is  to be provided, exceeds the amount of the
  moneys paid and accrued interest; and

    (iii) in the event the amount of the moneys paid and accrued  interest
  exceeds  the  cost  of  such services or merchandise when they are to be
  provided. If the  agreement  does  not  provide  to  the  contrary,  the
  services  or merchandise described in the agreement must be provided for
  no  more  than the price stated therein. Except for an irrevocable trust
  established pursuant to section two hundred nine of the social  services
  law  or  paragraph (d) of subdivision one of this section, any moneys in
  excess of the amount set forth in the agreement must be  repaid  to  the
  person  who  made  the  payment  or  to  the  estate of such person. The
  agreement must also specify the name and address of a person not  living
  at  the  address  of the person who made payments under or in connection
  with the agreement, to whom required notices may be sent if  the  person
  who  made  payments  under or in connection with the agreement cannot be
  contacted. The person making such payments may  decline  in  writing  to
  specify  the  name  and address of a person not living at the address of
  the person making such payments to whom such notice may be sent; and
    (f) With respect  to  an  agreement  for  an  irrevocable  trust  fund
  pursuant to section two hundred nine of the social services law, include
  the  following  statement  in  the  agreement in conspicuous print of at
  least twelve point type:
                                 DISCLOSURE
    NEW YORK LAW REQUIRES THIS AGREEMENT TO BE IRREVOCABLE FOR  APPLICANTS
  FOR  RECEIPT OF SUPPLEMENTAL SECURITY BENEFITS UNDER SECTION TWO HUNDRED
  NINE OF THE SOCIAL SERVICES LAW OR OF MEDICAL ASSISTANCE  UNDER  SECTION
  THREE  HUNDRED  SIXTY-SIX OF THE SOCIAL SERVICES LAW, AND FOR THE MONEYS
  PUT INTO A TRUST UNDER THIS AGREEMENT TO BE USED ONLY  FOR  FUNERAL  AND
  BURIAL EXPENSES. IF ANY MONEY IS LEFT OVER AFTER YOUR FUNERAL AND BURIAL
  EXPENSES  HAVE  BEEN PAID, IT WILL GO TO THE COUNTY. YOU MAY CHANGE YOUR
  CHOICE OF FUNERAL HOME AT ANY TIME.
    (g) Any promotional literature prepared after January first,  nineteen
  hundred  ninety-seven  by  a funeral firm, funeral director, undertaker,
  cemetery, or any other  person,  firm  or  corporation  for  prearranged
  funeral  and  burial  services  must  contain  language  disclosing  the
  irrevocable nature of burial trusts  established  for  an  applicant  or
  recipient   of   supplemental   security   income  benefits  or  medical
  assistance.
    4. Any provision of any such agreement whereby a person who pays money
  under or in connection therewith waives any provision  of  this  section
  shall be void.
    5. (a) Upon the sale or transfer of any business, firm, corporation or
  other  entity  having received moneys in connection with such agreements
  or the transfer of control over such  money,  both  the  new  owner  and
  former  owner  or  the  estate  of the former owner, or both the persons
  currently and formerly having control over  such  money,  shall,  within
  thirty  days  of  such  sale  or transfer, notify, in writing, each such
  person who has paid moneys of the sale or transfer, including  the  name
  and  address  of  the  new and former owner. Copies of such notification
  shall be made available for  inspection  and  shall  be  made  available
  during  ordinary  business hours for copying upon written request by any
  official or agency having jurisdiction.
    (b) Upon the sale or other transfer of any business, firm, corporation
  or  other  entity  having  received  moneys  in  connection  with   such
  agreements  or  upon  any  transfer  of  control  over  such moneys, the
  transferee shall be liable for compliance with all  provisions  of  this
  section  including  the repayment of any moneys and provision of funeral
  merchandise and services, and for compliance with all other requirements
  of this section if the  transferor  or  a  transferor's  predecessor  in
  interest  was  liable  for such compliance with the requirements of this

  section. Such liability shall attach whether or  not  the  successor  in
  interest  has,  upon  conveyance  of such business, firm, corporation or
  other entity, received such moneys or has knowledge of the existence  of
  the  agreement  as  herein  described. Such liability shall attach where
  there is proof of a valid agreement for  providing  funeral  merchandise
  and  services,  and  the funeral director, undertaker, cemetery or other
  person, firm or corporation has not refunded the  moneys  received  from
  the customer.
    (c) Upon the sale or other transfer of any business, firm, corporation
  or  other  entity  having  received  such  moneys, or upon a transfer of
  control of  such  moneys,  the  transferor  shall  disclose  a  complete
  accounting  of  all moneys transferred pursuant to such agreement to the
  transferee, including  the  names  and  addresses  of  all  persons  who
  deposited  moneys with such business, firm, corporation or other entity,
  the amount and location of such  moneys,  the  names  and  addresses  of
  persons who have received refunds and the amount of such refund.
    (d)  Upon the termination, cessation of operation or discontinuance of
  any business, firm, corporation  or  other  entity  which  has  received
  moneys  in  connection  with  such agreements or is otherwise liable for
  compliance with the requirements of this section, such  business,  firm,
  corporation  or  other  entity  shall  repay all such monies and accrued
  interest as if a demand had been made therefor  within  thirty  days  of
  such  termination  or discontinuation. Copies of records relating to the
  repayment of such moneys shall be available for inspection and shall  be
  made  available  during ordinary business hours for copying upon written
  request by the appropriate official or agency having jurisdiction.
    6. Any person, firm or corporation who or which, having  received  any
  moneys  under  or  in connection with such an agreement, shall knowingly
  and willfully fail to deposit or keep such moneys on  deposit  shall  be
  guilty  of  a  misdemeanor  or,  shall  knowingly  and willfully fail to
  provide the notification required pursuant to subdivision five  of  this
  section  shall be guilty of a violation. Any person, firm or corporation
  who or which, having received any moneys under  or  in  connection  with
  such an agreement, or who or which is deemed responsible for such moneys
  pursuant  to  subdivision  five  of  this  section shall, without lawful
  reason, knowingly and willfully fail to repay, upon demand, any and  all
  such  moneys  as  provided  in  this  section,  or  shall  knowingly and
  willfully misappropriate such money for a use  not  authorized  in  this
  section,  shall,  in addition to any other penalties provided by law, be
  guilty of a misdemeanor.
    7. Whenever there shall be a violation of this section an  application
  may  be  made  by  the attorney general in the name of the people of the
  state of New York to a court or justice having jurisdiction by a special
  proceeding to issue an injunction, and upon notice to the  defendant  of
  not  less than five days, to enjoin and restrain the continuance of such
  violation; and if it shall appear to the satisfaction of  the  court  or
  justice  that  the  defendant  has,  in  fact, violated this section, an
  injunction may  be  issued  by  the  court  or  justice,  enjoining  and
  restraining  any  further  violations,  without requiring proof that any
  person has, in fact, been  injured  or  damaged  thereby.  In  any  such
  proceeding,  the  court  may  make allowances to the attorney general as
  provided in paragraph six of subdivision  (a)  of  section  eighty-three
  hundred   three  of  the  civil  practice  law  and  rules,  and  direct
  restitution. Whenever the court shall determine that a violation of this
  section has occurred, the court may impose a civil penalty of  not  more
  than  one  thousand  dollars  for each violation; provided, however, the
  court shall not impose a civil penalty in any case where the  department
  of  health  has imposed such a penalty for an identical violation of the

  provisions of the  public  health  law.  In  connection  with  any  such
  proposed  application  the  attorney general is authorized to take proof
  and make a determination of the relevant facts and to issue subpoenas in
  accordance   with   the   civil  practice  law  and  rules,  and  direct
  restitution.
    8. Records required by this section to be maintained and  true  copies
  of  agreements shall be retained for four years following the provisions
  of funeral merchandise and services. In the event the funds are returned
  to the person who deposited the  money  or  their  representative,  such
  records, including the record of return of funds shall be retained for a
  period of four years after the sale, transfer, termination, cessation of
  operation or discontinuance of the funeral.
    9.  This  section  shall  not apply to the sale of lots or graves by a
  cemetery.
    10. For the purposes of subdivision eleven of this  section,  "preneed
  administrator"  means  any  person, partnership, firm, limited liability
  company or corporation, which is either domiciled in or  doing  business
  in  the  state  of  New  York,  and which has received money under or in
  connection with an agreement executed  pursuant  to  this  section;  and
  "county"  shall  refer  only to a county located within the state of New
  York. For the purposes of subdivision five  of  this  section,  "preneed
  administrator"  shall also include any successor, assignee or transferee
  of funds held pursuant to this section.
    11. Notwithstanding any other provision of law to  the  contrary,  the
  following  provisions  shall be applicable to each preneed administrator
  of written preneed accounts, both revocable and irrevocable:
    (a) The assets of such an account shall be deemed abandoned as of  the
  later of (i) three years after the date of death of the person for whose
  funeral  or  burial  such assets were to be used; or (ii) one year after
  the preneed administrator has  determined  that  the  person  for  whose
  funeral  or  burial  such  assets were to be used has died if such death
  occurred less than two years prior to such  determination.  The  preneed
  administrator  shall make reasonable attempts to determine if the person
  for whose funeral or burial such assets were to be used has died,  using
  available  information from federal and state sources. Upon the death of
  a person for whose funeral or burial such merchandise or services are to
  be furnished, the preneed administrator shall  determine  the  name  and
  address  of  the funeral director who performed the funeral services. If
  the preneed administrator determines that the funeral director has  been
  paid   in  full  for  the  funeral  services,  and  if  the  account  is
  irrevocable, the preneed administrator shall, on or before the tenth day
  of March in each year, transfer  the  assets  of  such  account  to  the
  indigent  care  burial fund for the county in which the person for whose
  funeral or burial such assets were to be used resided at the date of his
  or her death. If the preneed administrator determines that  the  funeral
  director  has  been  paid  in  full for the funeral services, and if the
  account is revocable, the preneed administrator shall, on or before  the
  tenth day of March in each year, pay or deliver to the state comptroller
  pursuant  to section one thousand three hundred fifteen of the abandoned
  property law, the assets of such account which was deemed to  have  been
  abandoned as of the thirty-first day of December of such calendar year.
    (1)  Upon  the  death  of  a  person  for whose funeral or burial such
  merchandise  or  services  are  to  be   furnished,   if   the   preneed
  administrator  determines that the funeral director has not been paid in
  full for the funeral services, the preneed administrator shall  pay  the
  funeral  director  for the funeral services upon receipt of the required
  documentation for paying claims for funeral services. If the balance due
  is more than the cost of the funeral services, the preneed administrator

  shall transfer the remaining balance, if an irrevocable account, to  the
  indigent  care  burial  fund  as  provided  in  this paragraph, or, if a
  revocable  account,  to  the  state  comptroller  as  provided  in  this
  paragraph.
    (2)  Upon  the  death  of  a  person  for whose funeral or burial such
  merchandise or  services  are  to  be  furnished,  and  with  reasonable
  efforts, the preneed administrator cannot determine the name and address
  of  the  funeral director who provided the funeral services, the preneed
  administrator, if the account was irrevocable, shall transfer the assets
  of such account to the indigent care burial fund for the county in which
  the person for whose funeral or burial such merchandise or services  are
  to  be  furnished  resided  at  the  time  the  irrevocable  account was
  established, such transfer to be made as described  in  this  paragraph.
  The  preneed  administrator,  if the account was revocable, shall pay or
  deliver the assets of  such  account  to  the  state  comptroller,  such
  transfer to be made as described in this paragraph.
    (b)  If  the  preneed administrator is not able to determine a current
  proper address of an account for the person for whose funeral or  burial
  such  merchandise  or  services are to be furnished such that the annual
  statements mailed regarding the account  are  returned  to  the  preneed
  administrator  as  undeliverable,  and  such administrator cannot, after
  making reasonable efforts, determine a current and  proper  address  for
  the  person for whose funeral or burial such merchandise or services are
  to be furnished, the account shall be deemed dormant if (i) the  preneed
  administrator  has  not been able to determine a correct address for the
  person for whose funeral or burial such merchandise or services  are  to
  be  furnished  for a period of fifteen consecutive years, and (ii) based
  upon the information contained in  the  written  agreement  the  preneed
  administrator  can  determine  that,  if the person for whose funeral or
  burial such merchandise or  services  are  to  be  furnished  were  then
  living,  the  person  for  whose  funeral  or burial such merchandise or
  services are to be furnished would have reached the age of  one  hundred
  fifteen years.
    (1) If the account is deemed dormant as defined in this paragraph, the
  preneed  administrator  shall transfer the assets of such account, if it
  is an irrevocable account, to the indigent  care  burial  fund  for  the
  county  in which the person for whose funeral or burial such merchandise
  or services are to be furnished resided  at  the  time  the  irrevocable
  account  was established. The administrator shall transfer the assets of
  such account, if it is a revocable account, to the state comptroller  as
  provided in paragraph (a) of this subdivision.
    (2)  Nothing  contained in this subdivision shall prevent a person for
  whose  funeral  or  burial  such  merchandise  or  services  are  to  be
  furnished,  if  an irrevocable account, or a funeral home which provided
  funeral services  to  the  person  for  whose  funeral  or  burial  such
  merchandise  or  services  are to be furnished, or a person who has paid
  for funeral services for which an irrevocable account  was  established,
  from  requesting  and  receiving  the  lesser  of (i) the actual cost or
  amount paid for the funeral, or  (ii)  the  amount  transferred  to  the
  indigent  burial fund, in the event that the person for whose funeral or
  burial such merchandise or services are to be furnished  is  living,  or
  that  the  funeral  services  for the person for whose funeral or burial
  such merchandise or services are to be furnished were not paid in  full,
  or  that a person has paid for funeral services for which an irrevocable
  account was established. Nothing contained  in  this  subdivision  shall
  prevent  a  person  otherwise authorized by law to seek reimbursement of
  the funds from a revocable account pursuant to the applicable provisions
  of the abandoned property law.