§ 1507 — Trust funds

§ 1507. Trust funds.\n (a) Maintenance and preservation; permanent maintenance fund; current\nmaintenance fund. Subject to rules and regulations of the cemetery\nboard: (1) Every cemetery corporation shall maintain and preserve the\ncemetery, including all lots, plots and parts thereof. For the sole\npurpose of such maintenance and preservation, every cemetery corporation\nshall establish and maintain (A) a permanent maintenance fund, and (B) a\ncurrent maintenance fund. At the time of making the sale of a lot, plot\nor part thereof, the cemetery corporation shall deposit not less than\nten per centum of the gross proceeds of the sale into the permanent\nmaintenance fund. An additional fifteen per centum of the gross proceeds\nof the sale shall be deposited in the current maintenance fund. In\naddition to the foregoing, at the time the cemetery corporation receives\npayment for the performance of an interment or inurnment, the cemetery\ncorporation shall collect and deposit into the permanent maintenance\nfund the sum of thirty-five dollars. (2) The permanent maintenance fund\nis hereby declared to be and shall be held by the corporation as a trust\nfund, for the purpose of maintaining and preserving the cemetery,\nincluding all lots, crypts, niches, plots, and parts thereof. The\nprincipal of such fund shall be invested in such securities as are\npermitted for the investment of trust funds by section 11-2.3 of the\nestates, powers and trusts law. The income in the form of interest and\nordinary dividends therefrom shall be used solely for the maintenance\nand preservation of the cemetery grounds. In addition, in any year, the\ngoverning board of a qualified corporation, as defined below, may\nappropriate for expenditure solely for the maintenance and preservation\nof the cemetery grounds, and treat as income for all purposes, an amount\nof trust principal equal to the excess, if any, of a percentage of the\nfair market value of the principal of the trust, as of the last day of\nthe cemetery's immediately preceding fiscal year, as is prudent under\nthe standard established by article five-A of this chapter, the prudent\nmanagement of institutional funds act over interest and ordinary\ndividends received in such year; provided, however, that an\nappropriation of an amount (the safe harbor amount) of trust principal\nequal to the excess of up to four percent of the fair market value of\nthe principal of the trust, as of the last day of the cemetery's\nimmediately preceding fiscal year over interest and ordinary dividends\nreceived in such year shall be deemed to be prudent in all events. A\n"qualified corporation" means a cemetery corporation which adopts a\nwritten investment policy setting forth guidelines on investments and\ndelegation of management and investment functions in accord with the\nstandards of article five-A of this chapter. If a cemetery corporation\nseeks to appropriate any percentage of the principal of the permanent\nmaintenance fund in accordance with this subparagraph, the cemetery\ncorporation shall provide notice of such proposed appropriation and\nprovide a copy of its written investment policy by certified mail to the\ncemetery board not less than sixty days in advance of such proposed\nappropriation and shall disclose such appropriation as part of and in\naddition to their annual reporting requirements as defined in section\nfifteen hundred eight of this article, setting forth the amount of\nprincipal to be appropriated for such expenditure and its effect on the\npermanent maintenance fund. Such proposed appropriation shall become\neffective sixty days after receipt of such notice, unless the proposed\nappropriation exceeds the safe harbor amount or the written investment\npolicy is not provided or is not prepared in accordance with the\nstandards of article five-A of this chapter, and the cemetery board\nwithin such sixty-day period notifies the cemetery corporation that the\nboard objects to the proposed appropriation. Except to the extent that\nprincipal is utilized as the result of the foregoing, all principal of\nthe permanent maintenance fund shall remain inviolate, with the further\nexception that, upon application to the supreme court in a district\nwhere a portion of the cemetery grounds is located, the court may make\nan order permitting the principal or a part thereof to be used for the\npurpose of current maintenance and preservation of the cemetery or\notherwise. Such application may be made by the cemetery board on notice\nto the corporation or by the corporation on notice to the cemetery\nboard. Unless the cemetery can clearly demonstrate that it lacks\nsufficient future revenue to make repayment, any such allowance from the\npermanent maintenance fund shall be in the form of a loan, and the court\nshall determine the method for repayment of such a loan by the cemetery\nto the fund. If the cemetery clearly demonstrates it lacks sufficient\nfuture revenue to make repayment such allowance from the permanent\nmaintenance fund shall be in the form of a grant that the cemetery is\nnot required to repay into its permanent maintenance fund. A cemetery,\nincluding a surviving cemetery following a merger or consolidated\ncemetery following a consolidation, may seek a modification of the\nmethod of repayment, or conversion of a loan to a grant, if the cemetery\ncan clearly demonstrate that the cemetery merged or consolidated into\nthe surviving cemetery will not produce sufficient future revenue to\nmake repayment under the existing loan. (3) The current maintenance\nfund shall be used and applied for the sole purpose of ordinary and\nnecessary expenses of the care and maintenance of the cemetery. When all\nburial rights in the cemetery have been conveyed, the fund remaining on\ndeposit or to the credit of the current maintenance fund shall be\ntransferred into the permanent maintenance fund. (4) The percentage of\nthe proceeds of sales required to be deposited in the permanent\nmaintenance fund or current maintenance fund by a particular cemetery\ncorporation may be increased or diminished by order of the supreme court\nin a district where any portion of the cemetery is located. Such\napplication may be made by the cemetery board on notice to the\ncorporation or by the corporation on notice to the cemetery board.\n (b) Perpetual care of lots. (1) Upon the application of a prospective\npurchaser of any lot, plot or part thereof and upon payment of the\npurchase price and the amount fixed as a reasonable charge for the\nperpetual care of any lot, plot or part thereof, every cemetery\ncorporation shall include with the deed of conveyance an agreement\nperpetually to care for such lot, plot, or part thereof, to the extent\nthat the income derived by the corporation from such amount will permit.\n(2) Such corporation also, upon the application of an owner or of the\nexecutor or administrator of a deceased owner of any lot and upon the\npayment of the amount fixed as a reasonable charge for the perpetual\ncare of such lot, shall, and upon the application of any other person\nand the payment of such amount, may enter into a like agreement with\nhim. Such agreement shall be executed and may be recorded in the same\nmanner as a deed. (3) Any corporation organized under or subject to the\nprovisions of this section may enter into an agreement in writing with\nany executor or executors, trustee or trustees, under a last will and\ntestament to whom there has heretofore been, or may hereafter be,\nbequeathed a sum for the perpetual care of any lot, plot or part thereof\nin any such cemetery or with any administrator or administrators with\nthe will annexed under any such will perpetually to care for such lot,\nplot or part thereof under the provisions of the terms of such last will\nand testament, and subject in all cases to the approval of the\nsurrogate's court having jurisdiction over such trust estate. Such\napproval may be evidenced by the written endorsement of the surrogate on\na duplicate original of such agreement filed in the surrogate's court.\nIn case the surrogate shall approve such agreement any such executor,\ntrustee or administrator with the will annexed thereupon shall pay over\nto the treasurer of such perpetual care fund of such cemetery\ncorporation any moneys remaining or being in his hands belonging to such\ntrust, and upon making such payment and accounting therefore to the\nsurrogate's court may be discharged from said trust as such executor,\ntrustee or administrator with the will annexed.\n (c) Perpetual care fund. (1) Every cemetery corporation and every\nreligious corporation having charge and control of a cemetery which\nheretofore has been or which hereafter may be used for burials, shall\nkeep separate and apart from its other funds, all moneys and property\nreceived by it, whether by contract, in trust or otherwise, for the\nperpetual care and maintenance of any lot, plot or part thereof in its\ncemetery, and all such moneys or property so received by any such\ncorporation are hereby declared to be, and shall be held by the\ncorporation as trust funds. Any moneys and property so received, unless\notherwise provided in the instrument under which such moneys or property\nwere received, shall be kept in a separate fund to be known as the\nperpetual care fund. (2) The principal of such funds, whether kept in\nthe perpetual care fund or otherwise, and unless already so invested\nwhen received, shall be invested within a reasonable time after receipt\nthereof, and kept invested, in such securities as are permitted for the\ninvestment of trust funds by sections 11-2.2 and 11-2.3 of the estates,\npowers and trusts law. The income arising therefrom shall be used solely\nfor the perpetual care and maintenance of the lot or plots or parts\nthereof for which such income has been provided. In addition, in any\nyear, the governing board of a qualified corporation, as defined below,\nmay appropriate for expenditure solely for the maintenance and\npreservation of the cemetery grounds, and treat as income for all\npurposes, an amount of trust principal equal to the excess, if any, of a\npercentage of the fair market value of the principal of the trust, as of\nthe last day of the cemetery's immediately preceding fiscal year, as is\nprudent under the standard established by article five-A of this\nchapter, the prudent management of institutional funds act over interest\nand ordinary dividends received in such year; provided, however, that an\nappropriation of an amount (the safe harbor amount) of trust principal\nequal to the excess of up to four percent of the fair market value of\nthe principal of the trust, as of the last day of the cemetery's\nimmediately preceding fiscal year over interest and ordinary dividends\nreceived in such year shall be deemed to be prudent in all events. A\n"qualified corporation" means a cemetery corporation which adopts a\nwritten investment policy setting forth guidelines on investments and\ndelegation of management and investment functions in accord with the\nstandards of article five-A of this chapter. If a cemetery corporation\nseeks to appropriate any percentage of the principal of the perpetual\ncare fund in accordance with this subparagraph, the cemetery corporation\nshall provide notice of such proposed appropriation and provide a copy\nof its written investment policy by certified mail to the cemetery board\nnot less than sixty days in advance of such proposed appropriation and\nshall disclose such appropriation as part of and in addition to their\nannual reporting requirements as defined in section fifteen hundred\neight of this article, setting forth the amount of principal to be\nappropriated for such expenditure and its effect on the perpetual care\nfund. Such proposed appropriation shall become effective sixty days\nafter receipt of such notice, unless the proposed appropriation exceeds\nthe safe harbor amount or the written investment policy is not provided\nor is not prepared in accordance with the standards of article five-A of\nthis chapter, and the cemetery board within such sixty-day period\nnotifies the cemetery corporation that the board objects to the proposed\nappropriation. (3) The corporation may, for the purpose of investing and\nreinvesting such funds, add the same to any similar trust fund or funds\nand apportion shares or interest to each trust fund, showing upon its\nrecords at all times every share or interest. (4) The corporation may\naccept in trust for the perpetual care of a lot, plot or part thereof in\nits cemetery, property not made eligible for the investment of trust\nfunds under the foregoing provisions of this subdivision and may retain\nsuch property in the form in which received, separate and apart from the\nperpetual care fund, if directed so to do by the instrument under which\nsuch property is received, so long as such property remains in the form\nin which it was received; but whenever such property is sold or\notherwise disposed of, the proceeds of such sale or other disposition\nshall be invested in the manner heretofore provided in this subdivision\nfor the investment of trust funds. The exchange of stock or evidences of\nindebtedness issued by a corporation for stock or evidences of\nindebtedness of the same corporation, or for stock, evidences of\nindebtedness, warrants or script received as a result of merger,\nconsolidation or reorganization of such corporation, or the receipt of\nadditional stock or evidences of indebtedness of such corporation, as a\ndistribution by such corporation, shall not be deemed to be a\ndisposition of the property originally received in trust, and such\nexchanged or additional property may be retained in place and stead of\nthe property originally received, and under the same conditions. The\ncorporation shall keep accurate accounts of all funds for the perpetual\ncare and maintenance of cemetery lots, plots or parts thereof, separate\nand apart from its other funds. A copy of the record pertaining to each\nsuch perpetual care fund shall be at all times available at the office\nof the corporation during usual business hours, for inspection and copy\nby any owner of an endowed lot or his representative.\n (d) Perpetual care fund; allocation of income and cost of care and\nmaintenance. On or before the fifteenth day of March in each calendar\nyear the officers of every cemetery corporation shall fix and determine\nthat portion of the income on the investment of the principal of the\nperpetual care fund during the calendar or fiscal year immediately\npreceding, to be apportioned to each separate lot or part thereof for\nwhich a perpetual care agreement has been made. The cost during such\nprevious calendar or fiscal year of the care of each lot or part thereof\nshall be allocated and charged against the income so apportioned to it.\nAny excess of the income so apportioned over and above the allocated\ncost of the care and maintenance of such lot or part thereof shall be\ncredited to such lot or part thereof, to be used in any future years to\nmake up the deficiency if the income apportioned to such lot or part\nthereof should, in any year since September first, nineteen hundred\nforty-nine, or in any future year, fall, or have fallen, below the cost\nof care thereof.\n (e) Designation of fiduciary corporation by directors or trustees of\ncemetery corporation to act as custodians of funds. Notwithstanding the\nprovisions of any other law, the directors or trustees of cemetery\ncorporations are hereby authorized to designate a bank or trust company\nto act as custodian and trustee of any or all of the respective funds of\nsuch cemetery corporation received by it for the perpetual care of lots\nin the cemetery thereof pursuant to paragraph (b), of this section, the\npermanent maintenance of such cemetery pursuant to paragraph (a) of this\nsection, and for special purposes pursuant to paragraph (f) of this\nsection. Such corporate trustee shall be designated by a resolution duly\nadopted by the board of directors or trustees and approved by a justice\nof the supreme court of the judicial district in which the cemetery of\nsaid corporation is located or the cemetery board; and the directors or\ntrustees of such cemetery corporation may, with the approval of the\njustice of the supreme court, revoke such trust, and either take over\nsuch trust fund or name another trustee to handle the same, but if not\nso revoked, such trust shall be perpetual. Any bank or trust company\naccepting any such cemetery fund shall keep the same separate from all\nother funds, except that it may, irrespective of any provision contained\nin this article invest the same in a legal common trust fund or in\nshares of a mutual trust investment company organized under the banking\nlaw, and shall pay over the net income to the directors or trustees of\nthe cemetery corporation by whom it shall be expended and applied to the\npurpose for which such trust fund was paid to the cemetery corporations\nand accounted for in accordance with such paragraphs (a), (b) and (f) of\nthis section.\n (e-1) Monument maintenance fund. (1) A cemetery corporation may,\nsubject to the approval of the cemetery board, establish and maintain a\nmonument maintenance fund. Such a fund is hereby declared to be and\nshall be held by the cemetery corporation as a trust fund, for the\npurpose of providing notice if such monuments are damaged or defaced by\nan act of vandalism and for the restoration of such monuments. Two or\nmore cemetery corporations may establish a joint monument maintenance\nfund.\n (2) The principal of the fund shall be invested in securities\npermitted for the investment of trust funds by sections 11-2.2 and\n11-2.3 of the estates, powers and trusts law. The principal of such fund\nshall remain inviolate, except that upon application to the cemetery\nboard, which may make an order permitting the principal or a part\nthereof to be used for the purpose of restoring monuments damaged or\ndefaced by an act of vandalism. The income arising from such investment\nshall be used solely for the costs and expenses resulting from an act of\nvandalism against monuments in such cemetery.\n (3) The fund shall be financed by a charge levied at the time of each\ninterment at a rate established by each cemetery creating such a fund,\nsubject to cemetery board approval pursuant to section fifteen hundred\nnine of this article. Such a charge shall be levied in addition to the\napproved rates for interment. The fund may also accept gifts, donations\nand bequests.\n (4) Each cemetery creating such a fund shall promulgate rules and\nregulations to administer the fund, subject to cemetery board approval\npursuant to section fifteen hundred nine of this article. Such rules\nshall include the conditions under which the income from such fund may\nbe properly expended.\n (5) The cemetery corporation shall keep accurate accounts of all\nmoneys for the fund, separate and apart from its other funds.\n (f) Acquisition of property for special purposes and in trust. (1) A\ncemetery corporation may acquire, otherwise than by condemnation, real\nor personal property, absolutely or in trust, in perpetuity or\notherwise, and shall use the same or the income therefrom in pursuance\nof the terms of the instrument by which it was acquired, for the\nfollowing purposes only: (i) The improvement or embellishment, but not\nthe enlargement, of its cemetery; (ii) The construction, preservation or\nreplacement of any building, structure, fence, wall, or walk therein;\n(iii) The erection, renewal or preservation of any tomb, monument,\nstone, fence, wall, railing or other erection or structure on or around\nits cemetery or any lot or plot therein; (iv) The planting or\ncultivation of trees, grass, shrubs, flowers or plants in or about its\ncemetery or any lot or plot therein; (v) The construction, operation,\nmaintenance, repair and replacement of a crematory or columbarium or\nboth in its cemetery; (vi) The care, keeping in order and embellishment\nof any lot, plot or part thereof or the structures thereon, in its\ncemetery, as prescribed in the instrument transferring such property to\nthe cemetery corporation, or by the person or persons from time to time\nhaving possession, care and control of such lot, plot or part thereof,\nas the case may be. (2) All moneys and property received by a cemetery\ncorporation in trust under this subdivision, unless otherwise provided\nin the instrument under which such moneys or property were received and\nunless already so invested when received, shall be invested within a\nreasonable time after the receipt thereof, and kept invested in such\nsecurities as are permitted for the investment of trust funds by\nsections 11-2.2 and 11-2.3 of the estates, powers and trusts law. The\ncorporation may, for the purpose of investing and reinvesting such\nfunds, add the same to any similar trust fund or funds and apportion\nshares or interests to each trust fund, showing upon its records at all\ntimes every share or interest. The cemetery corporation shall maintain a\nrecord for each such trust fund. Such record shall be at all times\navailable at the office of the corporation during usual business hours,\nfor inspection and copy by any owner of an endowed lot or his\nrepresentative.\n (g) Trust for the care of burial ground. A cemetery corporation,\nincorporated under or by a general or special law, may receive tangible\nproperty, securities or funds in trust, and hold and invest the same and\napply the principal or income thereof, in accordance with the terms of\nthe trust, for the purpose of repairing, maintaining, improving or\nembellishing a burial ground, not constituting a part of the cemetery of\nsuch cemetery corporation, and located outside of a city of more than\none million inhabitants and within ten miles of the cemetery of the\ncorporation accepting such trust. The directors of such corporation, or\na majority of them and the treasurer, shall annually within sixty days\nafter the close of each calendar or fiscal year, make, sign and shall\nfile at the office of the corporation a detailed accounting and report\nof such trust funds held under this subdivision and the use made of such\nfunds or of the income thereof for the preceding calendar or fiscal\nyear, which shall include among other things, properly itemized, the\nsecurities in which the same is then invested, and any purchases, sales\nor other changes made therein during the period covered by such report.\nSuch accounting and report shall be at all times available at the office\nof the corporation, during usual business hours, for inspection and copy\nby any lot owner or any contributor to such trust fund.\n (h) Vandalism, abandonment and monument repair or removal. (1)\nCemeteries incorporated under this article shall contribute to a fund\ncreated pursuant to section ninety-seven-r of the state finance law for\nthe maintenance of abandoned cemeteries, for the restoration of property\ndamaged by acts of vandalism, and for the repair or removal of monuments\nor other markers not owned by the cemetery corporation that have fallen\ninto disrepair or dilapidation so as to create a dangerous condition.\nSuch fund shall be administered by a board of trustees comprised of the\nsecretary of state, the attorney general and the commissioner of health,\nor their designees, who shall serve without additional compensation.\n (2) The fund shall be financed by contributions by the cemetery\ncorporations of not more than five dollars ($5.00) per interment or\ncremation in a manner to be determined by the New York state cemetery\nboard. No contributions shall be collected upon the interment of the\ncremains of a deceased person where a contribution was collected upon\ncremations.\n (3) The moneys of the fund shall be expended equally for the\nmaintenance of abandoned cemeteries previously owned by a corporation\nincorporated pursuant to this chapter or the membership corporations law\nand the repair of cemetery vandalism damage and the repair or removal of\nmonuments or other markers not owned by the cemetery corporation,\nprovided, however, that the cemetery board may determine that\ncircumstances necessitate an unequal distribution due to specific needs\nand may provide for such distribution. For purposes of this section, the\nmaintenance of abandoned cemeteries may include the ordinary and\nnecessary care of a cemetery, such as the construction of cemetery\nfences, placement of cemetery lights, removal of grass and weeds,\ndemolition or restoration of any buildings or structures in disrepair,\nthe refilling of graves, the repair or removal of monuments or other\nmarkers not owned by the cemetery corporation that have fallen into\ndisrepair or dilapidation so as to create a dangerous condition,\nreplacement of cemetery doors and locks, and the care of crypts, niches,\ngrave sites, monuments, and memorials paid for by means of the general\nfund or special fund or the income applied from the permanent\nmaintenance fund, perpetual care fund or monument maintenance fund of\nthe abandoned cemetery. For the purposes of this paragraph, the term\n"abandoned cemetery" may include cemeteries in imminent danger of\nabandonment as determined by the New York state cemetery board.\n (4) Authorization for payments by the fund for maintenance of an\nabandoned cemetery shall be made by the secretary of state only upon\napproval by the cemetery board of an application by a municipality or\nother solvent not-for-profit cemetery corporation, or a solvent\nnot-for-profit cemetery corporation that merges with an abandoned\ncemetery in a city pursuant to section fifteen hundred six-d of this\narticle, for fair and reasonable expenses required to be made by the\nmunicipality, other solvent not-for-profit cemetery corporation for\nmaintenance of an abandoned cemetery, or a solvent not-for-profit\ncemetery corporation that merges with an abandoned cemetery in a city\npursuant to section fifteen hundred six-d of this article; provided,\nhowever, that the cemetery board shall not approve any such application\nunless the municipality, other solvent not-for-profit cemetery\ncorporation, or solvent not-for-profit cemetery corporation that merges\nwith an abandoned cemetery in a city pursuant to section fifteen hundred\nsix-d of this article acknowledges that the responsibility for\nrestoration and future care, preservation, and maintenance of such\ncemetery has been assumed by the municipality or other solvent\nnot-for-profit cemetery corporation, or the solvent not-for-profit\ncemetery corporation that merges with an abandoned cemetery in a city\npursuant to section fifteen hundred six-d of this article. For the\npurposes of this paragraph, such cemetery shall always be deemed an\nabandoned cemetery.\n (5) Authorization for payments by the fund for the repair of vandalism\ndamage shall be made by the secretary of state only on approval by the\nNew York state cemetery board which shall determine:\n (i) that an act of vandalism to the extent described by the cemetery\ncorporation did take place;\n (ii) that either a written report of the vandalism was filed with the\nlocal police or sheriff's department, or, that the cemetery, upon\nconsent of the division, made a determination not to file the report\nbecause the publicity generated by filing the report would have adverse\nconsequences for the cemetery;\n (iii) that the cost of repairs is fair and reasonable; and\n (iv) that the cemetery corporation has been unable to obtain funds\nfrom the lot owner, his spouse, devisees or descendants within a\nreasonable period of time nor are there adequate funds in the cemetery\ncorporations monument maintenance fund, if such a fund has been\nestablished by the cemetery.\n (6) Authorization for payments by the fund for the repair or removal\nof monuments or other markers not owned by the cemetery corporation\nshall be made by the secretary of state only on approval by the New York\nstate cemetery board on application by the cemetery corporation showing:\n (i) that the monuments or markers are so badly out of repair or\ndilapidated as to create a dangerous condition;\n (ii) that the cost of remedying the condition is fair and reasonable;\n (iii) that the cemetery corporation has given not less than sixty days\nnotice to the last known owner to repair or remove the monument or other\nmarker and the said owner has failed to do so within the time prescribed\nin said notice.\n (7) The New York state cemetery board shall promulgate rules defining\nstandards of maintenance, as well as what type of vandalism or out of\nrepair or dilapidated monuments or other markers shall qualify for\npayment of repair or removal by the fund and the method and amount of\npayment of contributions described in subparagraph two of this paragraph\nupon the recommendation of the state cemetery board citizens advisory\ncouncil created by section fifteen hundred seven-a of this article\n(State cemetery board citizens advisory council). The New York state\ncemetery board shall approve or deny any application made pursuant to\nthis section no later than sixty days after receipt of a completed\napplication.\n (8) Nothing contained in this paragraph is to be construed as giving a\ncemetery corporation an "insurable interest" in monuments or other\nembellishments on a plot, lot or part thereof, nor is it meant to imply\nthat the cemetery corporation has any responsibility for repairing\nvandalism damage not covered by this fund, nor for repairing or removing\nout of repair or dilapidated monuments or other markers not owned by the\ncemetery corporation, nor shall it constitute the doing of an insurance\nbusiness.\n