What is the maximum fee that can be imposed upon the revocation of a preneed funeral trust?

• A. 4% of the corpus
• B. 4% of the total trust balance
• C. 10% of the corpus of the trust
• D. 10% of the total trust balance

Answer: (C)

The key point is how revocation fees are capped to protect the purchaser. When a preneed funeral trust is revoked, the administrator can charge an administrative fee, but that fee is limited. The limit is 10% of the corpus of the trust—the principal amount originally deposited. It’s grounded on the idea that the charge should come out of the funds that were put into the trust, not from future earnings or from the current value of the account.

So, the maximum amount you can be charged upon revocation is 10% of the corpus. For example, if the corpus is $10,000, the fee cannot exceed $1,000. The base is the corpus, not the total balance (which would include any earnings).