This bill amends existing Washington law (RCW 18.39.010 and RCW 18.39.250) to impose detailed regulatory and fiduciary requirements on funeral establishments that sell prearrangement funeral service contracts. It requires such establishments to place at least 80 percent of advance cash payments (excluding sales tax) into one or more Washington prearrangement funeral service trusts held by two or more trustees, permits participation in a master trust if each member complies, and allows the establishment to retain up to 20 percent of the cash purchase price. Trust funds must be deposited in insured accounts at eligible financial institutions, invested consistent with RCW 11.100.020, may not be used for the establishment’s benefit, and administrative fees may not exceed 1 percent per year. Deposits must be made no later than the 20th day of the month following receipt of each payment applied to the last 80 percent of the contract price, and trustees must allow withdrawal when contracted goods/services are furnished or the contract is canceled in accordance with its terms. The bill also prescribes contract and procedural rules: contracts must identify the trust and trustee contact information and state whether the contract is revocable or irrevocable; a full refund is required if a contract is canceled within 30 calendar days of signing; contracts must also state that upon cancellation by a purchaser or beneficiary eligible to cancel, up to ten percent of the contract amount may be retained by the seller to cover necessary expenses (the extracted facts include both statements but do not clarify how they operate together). Trustees must notify the Department of Social and Health Services (DSHS) Office of Financial Recovery when they become aware of a beneficiary’s death and renew notice of any DSHS claim on a beneficiary’s estate at least every three years; DSHS must file any claim within 30 days of that notice. The board may trigger refunds and terminate contracts if an establishment goes out of business or cannot meet obligations, and purchasers/beneficiaries may elect transfer of contracts and trust amounts to another licensed establishment. Prior to sale or transfer of ownership or control, sellers and buyers must apply to the director and provide a board-prescribed trust-status report; failure to comply may cause the establishment to be treated as out of business. This is a procedural and regulatory change to trust, contract, and oversight requirements governing prearranged funeral services rather than a criminal penalty change. The extracted materials are incomplete in at least two respects: a subsection regarding DSHS notification ends mid-sentence and the text referenced by the bill summary saying it "creates a new section" is not included, so additional provisions or clarifications that may be in the full bill are not available in the provided facts.

If enacted, licensed funeral establishments that sell prepaid funeral contracts will have to put the large majority of advance payments into legally designated trusts with at least two trustees, deposit those funds in insured accounts by the 20th of the month after receipt, and limit administrative fees to 1 percent a year. That will reduce the cash those businesses can immediately use (the bill says at least 80 percent must be placed in trust and allows the establishment to retain a portion of the purchase price), require them to set up and manage trust accounts or join a master trust, comply with additional reporting and transfer rules when selling a business, and notify the Department of Social and Health Services when a beneficiary dies so DSHS can file claims; buyers and beneficiaries get stronger refund and transfer protections. Most affected are licensed funeral establishments and the trustees and financial institutions that hold the trusts, because they will face new administrative work, trust setup and reporting costs, tighter cash flow, and potential liability if funds aren’t deposited or reported correctly; purchasers and beneficiaries are likely to see greater protection of prepaid money and clearer refund rights. Important details are missing or unclear in the extracted text—specifically a mid-sentence DSHS notification provision and an apparent conflict about how much a seller may retain (one part says up to 20 percent, another clause references up to 10 percent), so some implementation timing and refund-retention rules are uncertain.