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| June 27th, 2006 |
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Media Contact(s): Peter Carr (202) 224-9854,
Jared Whitley (202) 224-0134 |
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Printable Version |
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HATCH: ELIMINATE THE DOLLAR LIMIT ON QUALIFIED FUNERAL TRUSTS
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Washington - Sen. Orrin G. Hatch (R-Utah) today introduced a bill, S. 3586, to eliminate the current limit on the amount individuals can place into a trust to provide for funeral expenses.
The following are his introductory floor remarks:
Given the rising costs of funeral expenses, this change would have a positive impact on the lives of older Americans and on their families. In addition, according to the Joint Committee on Taxation, it would have a slight, but positive, impact on the federal treasury.
Current law limits a funeral trust to $8,500, but this is generally no longer sufficient to cover a family’s funeral expenses. In Utah, the average cost of a full funeral and burial is $12,685. I am sure that in many other states it is even higher. Because of this contribution limit, even those who pre-plan their own funerals too often leave their heirs with substantial expenses. Even those who attempt to cover the entire expense may not have enough to cover all costs after administrative fees and taxes are deducted.
This proposal would make Qualified Funeral Trusts more effective. The principal reason individuals set up Qualified Funeral Trust plans is to lift a financial burden from their children.
I recall the case of one constituent who wrote to me about this three years ago. He was suffering from Parkinson's disease began preplanning his own funeral so these decisions and this burden would be lifted from his children. Because of the "QFT Cap" which at the time was $7,800, this Utahn was not able to pre-plan completely the funeral services he desired. It became necessary to have one of his sons complete this pre-planning for him by opening up his own trust that would help to cover all expenses. It seems silly to make families go to these extra steps when they are attempting to make responsible decisions, well in advance of need, for themselves and their families.
For older Americans, the primary benefits of this legislation are the ability to have all the money they have saved in the trust to be applied to final expenses, instead of taxes, and the incentive to increase the amount of their contribution. Sixty percent of pre-funded funerals were funded by trusts and elimination of the cap should raise this percentage. For funeral directors, this change would eliminate the burden and expense of issuing information documents to report income earned from the trust.
I think we can all agree that we should make it easier for those who are willing to provide for these necessary expenses in advance. Today, I ask my colleagues to join me in an effort to enact this important measure.
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