Common Mistakes When It Comes to Perpetual Care Funds: How Can They Be Avoided?

If you own a cemetery or mausoleum and offer perpetual care, it is wise to set aside perpetual care funds with a trustee. It ensures the cemetery’s long-term care and maintenance, giving you peace of mind in a competitive industry.

Proper perpetual care fund management is critical for cemetery upkeep in the long run, but several common mistakes cause unplanned deficits.

Below, we explore common perpetual care fund errors, as well as ways to avoid these pitfalls.

Lacking Trust Performance Tracking

One of the most common perpetual care fund mistakes is failing to measure the trust’s investment performance and returns accurately. If you don’t monitor fund growth, you will not be able to identify potential issues or compare performance trends to previous years.

Keep your finger on the pulse by communicating with your trust officer regularly. You should also measure the fund’s performance against an investment policy statement (IPS).

Underfunding

Cemeteries usually pay the minimum amount that state regulations require. However, these deposits may not be sufficient to meet your future maintenance requirements. You may need to invest more aggressively to meet these types of expenses in a going concern.

Instead, ensure sufficient perpetual care funds by drawing up a long-term maintenance budget. Judge parameters according to your future needs and not the minimum state regulations.

Not Formulating Goals

Proper perpetual care management requires goal formulation as a platform for decisions and fund management. Determine your future maintenance needs and compare this to your capacity in the perpetual care fund. You should regularly revise these objectives, analyzing whether the fund is on track, and making adjustments if you foresee any issues.

Failing to Set Out Team Responsibilities

If each professional involved with the perpetual care fund management lacks specific roles, the fund is more likely to fail. A perpetual care fund team typically consists of several parties, including the trustee, record keeper, attorney, and investment manager. You, as a business owner, should also play an active role on this team.

The roles that the fund management team should fulfill include:

• Deposit and withdrawal management
• Fund investment management
• Fund performance monitoring

Contact MKS&H

As part of our Death Care Services, MKS&H offers perpetual care trust administration solutions. If you want to ensure compliance with state regulations and optimal perpetual care fund management, look no further than our MKS&H experts.

We will also provide you with extensive consultation in this area, and guidance on maintaining profitability in the niche. Contact us today to learn more.