{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/54.1-2322.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/54.1-2322.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/54.1-2322.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/54.1-2322.html"}],"law_id":68822,"edition_id":1,"section_id":68822,"structure_id":13695,"section_number":"54.1-2322","catch_line":"Use of income from perpetual care trust fund; distributions","history":"1998, cc. 708, 721; 2004, c. 192; 2012, c. 355; 2017, cc. 12, 65.","full_text":"A\n\nThe income from the perpetual care trust fund shall be used solely and exclusively for the general care, maintenance, administration, and embellishment of the cemetery. Unless prior approval has been obtained from the Board or a court of competent jurisdiction, the principal of the perpetual care trust fund shall only be used for investment purposes.B\n\nA cemetery company may request the trustee of a perpetual care trust fund to elect the distribution of either of the following from the perpetual care trust fund:1\n\nAll net income, which for purposes of this section means the collected dividends, interest, and other income of the perpetual care trust fund less any taxes on income, fees, commissions, and costs. A distribution made under this subdivision shall be referred to as a “net income distribution method”; or2\n\nAn amount not to exceed five percent of the fair market value of the perpetual care trust fund at the close of its fiscal year preceding the distribution year. A distribution made under this subdivision shall be referred to as a “total return distribution method.”C\n\nA cemetery company may request the trustee of a perpetual care trust fund to convert from a net income distribution method to a total return distribution method by delivering written or electronic notice to the trustee. Notice of such conversions shall be provided to the Board at least 90 days prior to implementation of the total return distribution method. Such notices may be written or electronic and shall include a copy of the trust instrument, election of distribution method, and an investment and distribution policy pursuant to subdivision D 1. In the event that a distribution method is not elected, distributions shall be limited to the net income distribution method.D\n\nThe trustee of a perpetual care trust fund may reject a cemetery company’s request to elect a total return distribution method. If a trustee determines that election of a total return distribution method is proper, he shall:1\n\nPrior to implementation of the total return distribution method, adopt a written investment and distribution policy under which the amounts of future distributions from the perpetual care trust fund will be calculated under the total return distribution method rather than net income distribution method. The investment goals and objectives of such policy shall be tailored to achieve (i) principal growth through equity investment; (ii) current income through income investment, as necessary; and (iii) an appropriate balance between (a) maintaining purchasing power through principal appreciation and (b) generating income to support the cemetery company’s care and maintenance. A copy of such policy shall be sent to the Board with the notice required in subsection C;2\n\nEnsure that asset allocation under the perpetual care trust fund includes a diversified portfolio and that investment decisions are made in accordance with all other applicable laws of the Commonwealth;3\n\nDetermine the fair market value of the perpetual care trust fund at least annually using generally accepted valuation methods and such valuation date or dates or averages of valuation dates as are readily ascertainable;4\n\nMake distributions from the perpetual care trust fund on a monthly, quarterly, semi-annual, or annual basis, as agreed upon by the cemetery company and the trustee;5\n\nRequire that both of the following tests be met each fiscal year prior to allowing any distribution from the perpetual care trust fund to the cemetery company: (i) the fair market value of the perpetual care trust fund after the distribution will be greater than the aggregate of 80 percent of the fair market value of the perpetual care trust fund at the close of the preceding fiscal year plus the total contributions made to the trust principal from such date to the date that the method of distribution is elected and (ii) beginning with the third year of using a total return distribution method, a three-year analysis of investment returns and distribution practices indicates that such practices will result in sufficient protection of the trust principal. If either test is not met, distributions for that fiscal year shall be limited to the net income distribution method;6\n\nIn the event that the taxes and fees paid by the perpetual care trust fund are greater than two and one-half percent of the fair market value of the trust at the close of the preceding fiscal year, reduce the distribution by the amount exceeding two and one-half percent; and7\n\nMaintain records documenting the fair market value of the assets held in the perpetual care trust fund at the end of the accounting period immediately prior to conversion to the total return distribution method.E\n\nIn addition to filing an annual perpetual care trust fund financial report with the Board pursuant to § 54.1-2324, a cemetery company that has elected a total return distribution method shall also file a copy of such financial report at the close of each fiscal year with the commissioner of accounts in a jurisdiction in the Commonwealth in which the cemetery company owns a cemetery. The commissioner of accounts shall review the financial report and forward his finalized accounting to the Board, with all reasonable fees and costs for such filing and review borne by the cemetery company. A trustee shall not make any distribution from a perpetual care trust fund under a total return distribution method until the review by the commissioner of accounts has been finalized. A review shall be deemed finalized if the commissioner of accounts has not responded or communicated any deficiencies within 60 days of the submission of the financial report.F\n\nThe Board shall review all notices of conversion or reversion of perpetual care trust fund distribution method for compliance with this section. The Board may engage the services of a professional to review notices of conversion or reversion to a total return distribution method, with all reasonable costs of such review borne by the cemetery company that submitted such notice.\n\t\t\tThe Board may limit or prohibit conversion from a net income distribution method to a total return distribution method if the trustee or any investment manager is not able to demonstrate sufficient knowledge and expertise regarding effective implementation of the total return distribution method. The Board may prohibit a reversion from the total return distribution method to the net income distribution method if the trust principal is less than it was at the time the cemetery company converted to the total return distribution method, as adjusted for inflation.\n\t\t\tIf a conversion to the total return distribution method has already been made, the Board may limit or prohibit distributions from the perpetual care trust fund if the trustee or any investment manager is not able to demonstrate sufficient knowledge and expertise regarding the distribution of trust income for the maintenance of the cemetery using the total return distribution method. In deciding whether a distribution should be limited or prohibited, the Board shall consider the presence and stated value of trust assets that do not have an active market and are not traded on a regular basis, the frequency of appraisals and evaluations of such assets, the asset allocation of the trust, and whether trust principal, as adjusted for inflation, is less than it was at the time the cemetery company converted to the total return distribution method.\n\t\t\tThe Board may require a cemetery company to restore a distribution to the perpetual care trust fund if (i) the distribution and all other aspects of the trust were not in compliance with the requirements of this section at the time such distribution was made or (ii) the cemetery company has committed fraud against the trust.G\n\nIf a total return distribution method has been elected, the perpetual care trust fund may not be reverted to a net income distribution method absent approval by the Board. A failure by a cemetery company to file a perpetual care trust fund financial report annually with the Board as required by § 54.1-2324 shall automatically prohibit a conversion to or continuation of a total return distribution method pending further action by the Board.H\n\nNo portion of the perpetual care trust fund shall be used to pay any personal obligation or debt of any officer or owner of the cemetery or any tax obligation incurred by the cemetery or for any purpose other than that expressly described in this section. Nothing in this section shall be construed to limit the ability of the perpetual care trust fund trustee from paying normal operating expenses and income taxes of the trust itself, the trust being a separate legal entity.","order_by":null,"text":{"0":{"id":249115,"text":"The income from the perpetual care trust fund shall be used solely and exclusively for the general care, maintenance, administration, and embellishment of the cemetery. Unless prior approval has been obtained from the Board or a court of competent jurisdiction, the principal of the perpetual care trust fund shall only be used for investment purposes.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":249116,"text":"A cemetery company may request the trustee of a perpetual care trust fund to elect the distribution of either of the following from the perpetual care trust fund:","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"B1"},"2":{"id":249117,"text":"All net income, which for purposes of this section means the collected dividends, interest, and other income of the perpetual care trust fund less any taxes on income, fees, commissions, and costs. A distribution made under this subdivision shall be referred to as a “net income distribution method”; or","type":"section","prefixes":["B","1"],"prefix":"1","entire_prefix":"B1","prefix_anchor":"B1","level":2,"prior_prefix":"B","next_prefix":"B2"},"3":{"id":249118,"text":"An amount not to exceed five percent of the fair market value of the perpetual care trust fund at the close of its fiscal year preceding the distribution year. A distribution made under this subdivision shall be referred to as a “total return distribution method.”","type":"section","prefixes":["B","2"],"prefix":"2","entire_prefix":"B2","prefix_anchor":"B2","level":2,"prior_prefix":"B1","next_prefix":"C"},"4":{"id":249119,"text":"A cemetery company may request the trustee of a perpetual care trust fund to convert from a net income distribution method to a total return distribution method by delivering written or electronic notice to the trustee. Notice of such conversions shall be provided to the Board at least 90 days prior to implementation of the total return distribution method. Such notices may be written or electronic and shall include a copy of the trust instrument, election of distribution method, and an investment and distribution policy pursuant to subdivision D 1. In the event that a distribution method is not elected, distributions shall be limited to the net income distribution method.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B2","next_prefix":"D"},"5":{"id":249120,"text":"The trustee of a perpetual care trust fund may reject a cemetery company’s request to elect a total return distribution method. If a trustee determines that election of a total return distribution method is proper, he shall:","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"D1"},"6":{"id":249121,"text":"Prior to implementation of the total return distribution method, adopt a written investment and distribution policy under which the amounts of future distributions from the perpetual care trust fund will be calculated under the total return distribution method rather than net income distribution method. The investment goals and objectives of such policy shall be tailored to achieve (i) principal growth through equity investment; (ii) current income through income investment, as necessary; and (iii) an appropriate balance between (a) maintaining purchasing power through principal appreciation and (b) generating income to support the cemetery company’s care and maintenance. A copy of such policy shall be sent to the Board with the notice required in subsection C;","type":"section","prefixes":["D","1"],"prefix":"1","entire_prefix":"D1","prefix_anchor":"D1","level":2,"prior_prefix":"D","next_prefix":"D2"},"7":{"id":249122,"text":"Ensure that asset allocation under the perpetual care trust fund includes a diversified portfolio and that investment decisions are made in accordance with all other applicable laws of the Commonwealth;","type":"section","prefixes":["D","2"],"prefix":"2","entire_prefix":"D2","prefix_anchor":"D2","level":2,"prior_prefix":"D1","next_prefix":"D3"},"8":{"id":249123,"text":"Determine the fair market value of the perpetual care trust fund at least annually using generally accepted valuation methods and such valuation date or dates or averages of valuation dates as are readily ascertainable;","type":"section","prefixes":["D","3"],"prefix":"3","entire_prefix":"D3","prefix_anchor":"D3","level":2,"prior_prefix":"D2","next_prefix":"D4"},"9":{"id":249124,"text":"Make distributions from the perpetual care trust fund on a monthly, quarterly, semi-annual, or annual basis, as agreed upon by the cemetery company and the trustee;","type":"section","prefixes":["D","4"],"prefix":"4","entire_prefix":"D4","prefix_anchor":"D4","level":2,"prior_prefix":"D3","next_prefix":"D5"},"10":{"id":249125,"text":"Require that both of the following tests be met each fiscal year prior to allowing any distribution from the perpetual care trust fund to the cemetery company: (i) the fair market value of the perpetual care trust fund after the distribution will be greater than the aggregate of 80 percent of the fair market value of the perpetual care trust fund at the close of the preceding fiscal year plus the total contributions made to the trust principal from such date to the date that the method of distribution is elected and (ii) beginning with the third year of using a total return distribution method, a three-year analysis of investment returns and distribution practices indicates that such practices will result in sufficient protection of the trust principal. If either test is not met, distributions for that fiscal year shall be limited to the net income distribution method;","type":"section","prefixes":["D","5"],"prefix":"5","entire_prefix":"D5","prefix_anchor":"D5","level":2,"prior_prefix":"D4","next_prefix":"D6"},"11":{"id":249126,"text":"In the event that the taxes and fees paid by the perpetual care trust fund are greater than two and one-half percent of the fair market value of the trust at the close of the preceding fiscal year, reduce the distribution by the amount exceeding two and one-half percent; and","type":"section","prefixes":["D","6"],"prefix":"6","entire_prefix":"D6","prefix_anchor":"D6","level":2,"prior_prefix":"D5","next_prefix":"D7"},"12":{"id":249127,"text":"Maintain records documenting the fair market value of the assets held in the perpetual care trust fund at the end of the accounting period immediately prior to conversion to the total return distribution method.","type":"section","prefixes":["D","7"],"prefix":"7","entire_prefix":"D7","prefix_anchor":"D7","level":2,"prior_prefix":"D6","next_prefix":"E"},"13":{"id":249128,"text":"In addition to filing an annual perpetual care trust fund financial report with the Board pursuant to § 54.1-2324, a cemetery company that has elected a total return distribution method shall also file a copy of such financial report at the close of each fiscal year with the commissioner of accounts in a jurisdiction in the Commonwealth in which the cemetery company owns a cemetery. The commissioner of accounts shall review the financial report and forward his finalized accounting to the Board, with all reasonable fees and costs for such filing and review borne by the cemetery company. A trustee shall not make any distribution from a perpetual care trust fund under a total return distribution method until the review by the commissioner of accounts has been finalized. A review shall be deemed finalized if the commissioner of accounts has not responded or communicated any deficiencies within 60 days of the submission of the financial report.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D7","next_prefix":"F"},"14":{"id":249129,"text":"The Board shall review all notices of conversion or reversion of perpetual care trust fund distribution method for compliance with this section. The Board may engage the services of a professional to review notices of conversion or reversion to a total return distribution method, with all reasonable costs of such review borne by the cemetery company that submitted such notice.\n\t\t\tThe Board may limit or prohibit conversion from a net income distribution method to a total return distribution method if the trustee or any investment manager is not able to demonstrate sufficient knowledge and expertise regarding effective implementation of the total return distribution method. The Board may prohibit a reversion from the total return distribution method to the net income distribution method if the trust principal is less than it was at the time the cemetery company converted to the total return distribution method, as adjusted for inflation.\n\t\t\tIf a conversion to the total return distribution method has already been made, the Board may limit or prohibit distributions from the perpetual care trust fund if the trustee or any investment manager is not able to demonstrate sufficient knowledge and expertise regarding the distribution of trust income for the maintenance of the cemetery using the total return distribution method. In deciding whether a distribution should be limited or prohibited, the Board shall consider the presence and stated value of trust assets that do not have an active market and are not traded on a regular basis, the frequency of appraisals and evaluations of such assets, the asset allocation of the trust, and whether trust principal, as adjusted for inflation, is less than it was at the time the cemetery company converted to the total return distribution method.\n\t\t\tThe Board may require a cemetery company to restore a distribution to the perpetual care trust fund if (i) the distribution and all other aspects of the trust were not in compliance with the requirements of this section at the time such distribution was made or (ii) the cemetery company has committed fraud against the trust.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E","next_prefix":"G"},"15":{"id":249130,"text":"If a total return distribution method has been elected, the perpetual care trust fund may not be reverted to a net income distribution method absent approval by the Board. A failure by a cemetery company to file a perpetual care trust fund financial report annually with the Board as required by § 54.1-2324 shall automatically prohibit a conversion to or continuation of a total return distribution method pending further action by the Board.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F","next_prefix":"H"},"16":{"id":249131,"text":"No portion of the perpetual care trust fund shall be used to pay any personal obligation or debt of any officer or owner of the cemetery or any tax obligation incurred by the cemetery or for any purpose other than that expressly described in this section. Nothing in this section shall be construed to limit the ability of the perpetual care trust fund trustee from paying normal operating expenses and income taxes of the trust itself, the trust being a separate legal entity.","type":"section","prefixes":["H"],"prefix":"H","entire_prefix":"H","prefix_anchor":"H","level":1,"prior_prefix":"G"}},"ancestry":[{"id":13695,"edition_id":1,"name":"Cemetery Operators, Perpetual Care Trust Funds and Preneed Burial Contracts","identifier":"23.1","label":"chapter","depth":3,"order_by":1,"parent_id":12755,"metadata":{},"date_created":"2026-06-26 03:45:35","date_modified":"2026-06-26 03:45:35","permalink":{"id":240255,"object_type":"structure","relational_id":13695,"identifier":"23.1","token":"54.1\/II\/23.1","url":"\/54.1\/II\/23.1\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12755,"edition_id":1,"name":"Professions and Occupations Regulated by the Department of Professional and Occupational Regulation and Boards Within the Department","identifier":"II","label":"subtitle","depth":2,"order_by":1,"parent_id":12754,"metadata":{},"date_created":"2026-06-26 03:43:51","date_modified":"2026-06-26 03:43:51","permalink":{"id":239415,"object_type":"structure","relational_id":12755,"identifier":"II","token":"54.1\/II","url":"\/54.1\/II\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12754,"edition_id":1,"name":"Professions and Occupations","identifier":"54.1","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:51","date_modified":"2026-06-26 03:43:51","permalink":{"id":239313,"object_type":"structure","relational_id":12754,"identifier":"54.1","token":"54.1","url":"\/54.1\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":61603,"structure_id":13695,"section_number":"54.1-2310","catch_line":"Definitions","url":"\/54.1-2310\/","token":"54.1\/II\/23.1\/54.1-2310","metadata":false},{"id":72586,"structure_id":13695,"section_number":"54.1-2311","catch_line":"Cemetery operators required to be licensed by the Board","url":"\/54.1-2311\/","token":"54.1\/II\/23.1\/54.1-2311","metadata":false},{"id":81993,"structure_id":13695,"section_number":"54.1-2312","catch_line":"Exemptions","url":"\/54.1-2312\/","token":"54.1\/II\/23.1\/54.1-2312","metadata":false},{"id":85224,"structure_id":13695,"section_number":"54.1-2312.01","catch_line":"Special interments; definitions; regulations by Board","url":"\/54.1-2312.01\/","token":"54.1\/II\/23.1\/54.1-2312.01","metadata":false},{"id":81764,"structure_id":13695,"section_number":"54.1-2312.1","catch_line":"Resale of interment right; conditions for resale transaction; contents of transfer form; approval by cemetery company","url":"\/54.1-2312.1\/","token":"54.1\/II\/23.1\/54.1-2312.1","metadata":false},{"id":78987,"structure_id":13695,"section_number":"54.1-2312.2","catch_line":"Resale of interment right by certain churches and religious organizations","url":"\/54.1-2312.2\/","token":"54.1\/II\/23.1\/54.1-2312.2","metadata":false},{"id":76163,"structure_id":13695,"section_number":"54.1-2313","catch_line":"Board; appointment; terms; vacancies; meetings; quorum; other powers; regulations","url":"\/54.1-2313\/","token":"54.1\/II\/23.1\/54.1-2313","metadata":false},{"id":56354,"structure_id":13695,"section_number":"54.1-2313.1","catch_line":"Protection of preneed burial and perpetual care trust funds; operation of cemetery company; appointment of receiver","url":"\/54.1-2313.1\/","token":"54.1\/II\/23.1\/54.1-2313.1","metadata":false},{"id":59048,"structure_id":13695,"section_number":"54.1-2314","catch_line":"Refusal, suspension or revocation of license or registration","url":"\/54.1-2314\/","token":"54.1\/II\/23.1\/54.1-2314","metadata":false},{"id":68604,"structure_id":13695,"section_number":"54.1-2315","catch_line":"Other prohibited activities","url":"\/54.1-2315\/","token":"54.1\/II\/23.1\/54.1-2315","metadata":false},{"id":68252,"structure_id":13695,"section_number":"54.1-2316","catch_line":"Certain representations unlawful; perpetual care trust fund required","url":"\/54.1-2316\/","token":"54.1\/II\/23.1\/54.1-2316","metadata":false},{"id":77982,"structure_id":13695,"section_number":"54.1-2317","catch_line":"Who may serve as trustee of perpetual care trust fund","url":"\/54.1-2317\/","token":"54.1\/II\/23.1\/54.1-2317","metadata":false},{"id":66009,"structure_id":13695,"section_number":"54.1-2318","catch_line":"Application of Part A (\u00a7 64.2-1200 et seq.) of Subtitle IV of Title 64.2","url":"\/54.1-2318\/","token":"54.1\/II\/23.1\/54.1-2318","metadata":false},{"id":84608,"structure_id":13695,"section_number":"54.1-2319","catch_line":"Deposit in perpetual care trust fund required upon sale of graves, etc","url":"\/54.1-2319\/","token":"54.1\/II\/23.1\/54.1-2319","metadata":false},{"id":69258,"structure_id":13695,"section_number":"54.1-2320","catch_line":"Additional deposit not required upon subsequent sale of same grave, crypt or niche","url":"\/54.1-2320\/","token":"54.1\/II\/23.1\/54.1-2320","metadata":false},{"id":56252,"structure_id":13695,"section_number":"54.1-2321","catch_line":"Recovery of original perpetual care trust fund deposit","url":"\/54.1-2321\/","token":"54.1\/II\/23.1\/54.1-2321","metadata":false},{"id":68822,"structure_id":13695,"section_number":"54.1-2322","catch_line":"Use of income from perpetual care trust fund; distributions","url":"\/54.1-2322\/","token":"54.1\/II\/23.1\/54.1-2322","metadata":false},{"id":82665,"structure_id":13695,"section_number":"54.1-2323","catch_line":"Financial records required","url":"\/54.1-2323\/","token":"54.1\/II\/23.1\/54.1-2323","metadata":false},{"id":77504,"structure_id":13695,"section_number":"54.1-2324","catch_line":"Financial report and report of independent certified public accountant required for perpetual care trust funds","url":"\/54.1-2324\/","token":"54.1\/II\/23.1\/54.1-2324","metadata":false},{"id":78778,"structure_id":13695,"section_number":"54.1-2325","catch_line":"Deposit in preneed trust required upon sale of property or services not to be delivered within 120 days","url":"\/54.1-2325\/","token":"54.1\/II\/23.1\/54.1-2325","metadata":false},{"id":81056,"structure_id":13695,"section_number":"54.1-2326","catch_line":"Who may serve as trustee of preneed trust fund","url":"\/54.1-2326\/","token":"54.1\/II\/23.1\/54.1-2326","metadata":false},{"id":75693,"structure_id":13695,"section_number":"54.1-2327","catch_line":"Itemized statement and general price list of burial fees to be furnished; solicitations prohibited","url":"\/54.1-2327\/","token":"54.1\/II\/23.1\/54.1-2327","metadata":false},{"id":65840,"structure_id":13695,"section_number":"54.1-2328","catch_line":"Requirements of preneed burial contracts","url":"\/54.1-2328\/","token":"54.1\/II\/23.1\/54.1-2328","metadata":false},{"id":80895,"structure_id":13695,"section_number":"54.1-2329","catch_line":"Identification of specific funds","url":"\/54.1-2329\/","token":"54.1\/II\/23.1\/54.1-2329","metadata":false},{"id":80662,"structure_id":13695,"section_number":"54.1-2330","catch_line":"Specific funds and income to remain in preneed trust account; exception","url":"\/54.1-2330\/","token":"54.1\/II\/23.1\/54.1-2330","metadata":false},{"id":54782,"structure_id":13695,"section_number":"54.1-2331","catch_line":"Disbursement of trust funds upon performance of contract","url":"\/54.1-2331\/","token":"54.1\/II\/23.1\/54.1-2331","metadata":false},{"id":66596,"structure_id":13695,"section_number":"54.1-2332","catch_line":"Seller required to keep records","url":"\/54.1-2332\/","token":"54.1\/II\/23.1\/54.1-2332","metadata":false},{"id":58614,"structure_id":13695,"section_number":"54.1-2333","catch_line":"Financial report and report of independent certified public accountant required for preneed trust accounts","url":"\/54.1-2333\/","token":"54.1\/II\/23.1\/54.1-2333","metadata":false},{"id":69291,"structure_id":13695,"section_number":"54.1-2334","catch_line":"Inclusion of property and services to be delivered within 120 days","url":"\/54.1-2334\/","token":"54.1\/II\/23.1\/54.1-2334","metadata":false},{"id":75017,"structure_id":13695,"section_number":"54.1-2335","catch_line":"Breach of contract by seller; trust to be single purpose trust","url":"\/54.1-2335\/","token":"54.1\/II\/23.1\/54.1-2335","metadata":false},{"id":74745,"structure_id":13695,"section_number":"54.1-2336","catch_line":"Trustee may rely on certifications and affidavits","url":"\/54.1-2336\/","token":"54.1\/II\/23.1\/54.1-2336","metadata":false},{"id":70137,"structure_id":13695,"section_number":"54.1-2337","catch_line":"Transfer of trust funds to another trustee","url":"\/54.1-2337\/","token":"54.1\/II\/23.1\/54.1-2337","metadata":false},{"id":55080,"structure_id":13695,"section_number":"54.1-2338","catch_line":"Use of trustee's name in advertisements","url":"\/54.1-2338\/","token":"54.1\/II\/23.1\/54.1-2338","metadata":false},{"id":70915,"structure_id":13695,"section_number":"54.1-2339","catch_line":"Construction and development of mausoleums and garden crypts","url":"\/54.1-2339\/","token":"54.1\/II\/23.1\/54.1-2339","metadata":false},{"id":63571,"structure_id":13695,"section_number":"54.1-2340","catch_line":"Waiver of chapter void","url":"\/54.1-2340\/","token":"54.1\/II\/23.1\/54.1-2340","metadata":false},{"id":77379,"structure_id":13695,"section_number":"54.1-2341","catch_line":"Exemption from levy, garnishment and distress","url":"\/54.1-2341\/","token":"54.1\/II\/23.1\/54.1-2341","metadata":false},{"id":54676,"structure_id":13695,"section_number":"54.1-2342","catch_line":"Penalties","url":"\/54.1-2342\/","token":"54.1\/II\/23.1\/54.1-2342","metadata":false}],"previous_section":{"id":56252,"structure_id":13695,"section_number":"54.1-2321","catch_line":"Recovery of original perpetual care trust fund deposit","url":"\/54.1-2321\/","token":"54.1\/II\/23.1\/54.1-2321","metadata":false},"next_section":{"id":82665,"structure_id":13695,"section_number":"54.1-2323","catch_line":"Financial records required","url":"\/54.1-2323\/","token":"54.1\/II\/23.1\/54.1-2323","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/54.1-2322\/","history_text":"

This law was first created in 1998. The record of its establishment is cataloged in chapters 708<\/a> and 721<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. It has been modified 3 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 2004, chapter 192<\/a>; in 2012, chapter 355<\/a>; in 2017, chapters 12<\/a> and 65<\/a>.<\/p>","references":[{"id":77504,"section_number":"54.1-2324","catch_line":"Financial report and report of independent certified public accountant required for perpetual care trust funds","order_by":null,"url":"\/54.1-2324\/"},{"id":54676,"section_number":"54.1-2342","catch_line":"Penalties","order_by":null,"url":"\/54.1-2342\/"}],"refers_to":[{"id":77504,"section_number":"54.1-2324","catch_line":"Financial report and report of independent certified public accountant required for perpetual care trust funds","order_by":null,"url":"\/54.1-2324\/"}],"permalink":{"id":240321,"object_type":"law","relational_id":68822,"identifier":"54.1-2322","token":"54.1\/II\/23.1\/54.1-2322","url":"\/54.1-2322\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/54.1-2322\/","token":"54.1\/II\/23.1\/54.1-2322","dublin_core":{"Title":"Use of income from perpetual care trust fund; distributions","Type":"Text","Format":"text\/html","Identifier":"\u00a7 54.1-2322","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> The income from the perpetual care trust fund<\/span> shall be used solely and exclusively for the general care, maintenance, administration, and embellishment of the cemetery<\/span>. Unless prior approval has been obtained from the Board<\/span> or a court<\/span> of competent jurisdiction<\/span>, the principal of the perpetual care trust fund<\/span> shall only be used for investment purposes. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> A cemetery company<\/span> may request the trustee of a perpetual care trust fund<\/span> to elect the distribution of either of the following from the perpetual care trust fund<\/span>: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> All net income, which for purposes of this section means the collected dividends, interest, and other income of the perpetual care trust fund<\/span> less any taxes on income, fees, commissions, and costs. A distribution made under this subdivision shall be referred to as a “net income distribution method<\/span>”; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> An amount not to exceed five percent of the fair market value of the perpetual care trust fund<\/span> at the close of its fiscal year preceding the distribution year. A distribution made under this subdivision shall be referred to as a “total return distribution method.” <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> A cemetery company<\/span> may request the trustee of a perpetual care trust fund<\/span> to convert from a net income distribution method<\/span> to a total return distribution method by delivering written or electronic notice to the trustee. Notice of such conversions shall be provided to the Board<\/span> at least 90 days prior to implementation of the total return distribution method. Such notices may be written or electronic and shall include a copy of the trust instrument, election of distribution method, and an investment and distribution policy pursuant to subdivision D 1. In the event that a distribution method is not elected, distributions shall be limited to the net income distribution method<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> The trustee of a perpetual care trust fund<\/span> may reject a cemetery company<\/span>’s request to elect a total return distribution method. If a trustee determines that election of a total return distribution method is proper, he shall: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Prior to implementation of the total return distribution method, adopt a written investment and distribution policy under which the amounts of future distributions from the perpetual care trust fund<\/span> will be calculated under the total return distribution method rather than net income distribution method<\/span>. The investment goals and objectives of such policy shall be tailored to achieve (i) principal growth through equity<\/span> investment; (ii) current income through income investment, as necessary; and (iii) an appropriate balance between (a) maintaining purchasing power through principal appreciation and (b) generating income to support the cemetery company<\/span>’s care and maintenance. A copy of such policy shall be sent to the Board<\/span> with the notice required in subsection C; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Ensure that asset allocation under the perpetual care trust fund<\/span> includes a diversified portfolio and that investment decisions are made in accordance with all other applicable laws<\/span> of the Commonwealth; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Determine the fair market value of the perpetual care trust fund<\/span> at least annually using generally accepted valuation methods and such valuation date or dates or averages of valuation dates as are readily ascertainable; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Make distributions from the perpetual care trust fund<\/span> on a monthly, quarterly, semi-annual, or annual basis, as agreed upon by the cemetery company<\/span> and the trustee; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> Require that both of the following tests be met each fiscal year prior to allowing any distribution from the perpetual care trust fund<\/span> to the cemetery company<\/span>: (i) the fair market value of the perpetual care trust fund<\/span> after the distribution will be greater than the aggregate of 80 percent of the fair market value of the perpetual care trust fund<\/span> at the close of the preceding fiscal year plus the total contributions made to the trust principal from such date to the date that the method of distribution is elected and (ii) beginning with the third year of using a total return distribution method, a three-year analysis of investment returns and distribution practices indicates that such practices will result in sufficient protection of the trust principal. If either test is not met, distributions for that fiscal year shall be limited to the net income distribution method<\/span>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

6.<\/span> In the event that the taxes and fees paid by the perpetual care trust fund<\/span> are greater than two and one-half percent of the fair market value of the trust at the close of the preceding fiscal year, reduce the distribution by the amount exceeding two and one-half percent; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

7.<\/span> Maintain records documenting the fair market value of the assets<\/span> held in the perpetual care trust fund<\/span> at the end of the accounting period immediately prior to conversion to the total return distribution method. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> In addition to filing an annual perpetual care trust fund<\/span> financial report with the Board<\/span> pursuant to § 54.1-2324<\/a>, a cemetery company<\/span> that has elected a total return distribution method shall also file a copy of such financial report at the close of each fiscal year with the commissioner of accounts in a jurisdiction<\/span> in the Commonwealth in which the cemetery company<\/span> owns a cemetery. The commissioner of accounts shall review the financial report and forward his finalized accounting to the Board<\/span>, with all reasonable fees and costs for such filing and review borne by the cemetery company<\/span>. A trustee shall not make any distribution from a perpetual care trust fund<\/span> under a total return distribution method until the review by the commissioner of accounts has been finalized. A review shall be deemed finalized if the commissioner of accounts has not responded or communicated any deficiencies within 60 days of the submission of the financial report. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> The Board<\/span> shall review all notices of conversion or reversion of perpetual care trust fund<\/span> distribution method for compliance with this section. The Board<\/span> may engage the services of a professional to review notices of conversion or reversion to a total return distribution method, with all reasonable costs of such review borne by the cemetery company<\/span> that submitted such notice.\n\t\t\tThe Board<\/span> may limit or prohibit conversion from a net income distribution method<\/span> to a total return distribution method if the trustee or any investment manager is not able to demonstrate sufficient knowledge and expertise regarding effective implementation of the total return distribution method. The Board<\/span> may prohibit a reversion from the total return distribution method to the net income distribution method<\/span> if the trust principal is less than it was at the time the cemetery company<\/span> converted to the total return distribution method, as adjusted for inflation.\n\t\t\tIf a conversion to the total return distribution method has already been made, the Board<\/span> may limit or prohibit distributions from the perpetual care trust fund<\/span> if the trustee or any investment manager is not able to demonstrate sufficient knowledge and expertise regarding the distribution of trust income for the maintenance of the cemetery using the total return distribution method. In deciding whether a distribution should be limited or prohibited, the Board<\/span> shall consider the presence and stated value of trust assets<\/span> that do not have an active market and are not traded on a regular basis, the frequency of appraisals and evaluations of such assets<\/span>, the asset allocation of the trust, and whether trust principal, as adjusted for inflation, is less than it was at the time the cemetery company<\/span> converted to the total return distribution method.\n\t\t\tThe Board<\/span> may require a cemetery company<\/span> to restore a distribution to the perpetual care trust fund<\/span> if (i) the distribution and all other aspects of the trust were not in compliance with the requirements of this section at the time such distribution was made or (ii) the cemetery company<\/span> has committed fraud<\/span> against the trust. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> If a total return distribution method has been elected, the perpetual care trust fund<\/span> may not be reverted to a net income distribution method<\/span> absent approval by the Board<\/span>. A failure by a cemetery company<\/span> to file a perpetual care trust fund<\/span> financial report annually with the Board<\/span> as required by § 54.1-2324<\/a> shall automatically prohibit a conversion to or continuation of a total return distribution method pending further action by the Board<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

H.<\/span> No portion of the perpetual care trust fund<\/span> shall be used to pay any personal obligation or debt of any officer or owner of the cemetery or any tax obligation incurred by the cemetery or for any purpose other than that expressly described in this section. Nothing in this section shall be construed to limit the ability of the perpetual care trust fund<\/span> trustee from paying normal operating expenses and income taxes of the trust itself, the trust being a separate legal entity. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nUSE OF INCOME FROM PERPETUAL CARE TRUST FUND; DISTRIBUTIONS (\u00a7 54.1-2322)\n\nA. The income from the perpetual care trust fund shall be used solely and\nexclusively for the general care, maintenance, administration, and embellishment\nof the cemetery. Unless prior approval has been obtained from the Board or a\ncourt of competent jurisdiction, the principal of the perpetual care trust fund\nshall only be used for investment purposes.\n\nB. A cemetery company may request the trustee of a perpetual care trust fund to\nelect the distribution of either of the following from the perpetual care trust\nfund:\n\n 1. All net income, which for purposes of this section means the collected\n dividends, interest, and other income of the perpetual care trust fund less\n any taxes on income, fees, commissions, and costs. A distribution made under\n this subdivision shall be referred to as a “net income distribution\n method”; or\n\n 2. An amount not to exceed five percent of the fair market value of the\n perpetual care trust fund at the close of its fiscal year preceding the\n distribution year. A distribution made under this subdivision shall be\n referred to as a “total return distribution method.”\n\nC. A cemetery company may request the trustee of a perpetual care trust fund to\nconvert from a net income distribution method to a total return distribution\nmethod by delivering written or electronic notice to the trustee. Notice of such\nconversions shall be provided to the Board at least 90 days prior to\nimplementation of the total return distribution method. Such notices may be\nwritten or electronic and shall include a copy of the trust instrument, election\nof distribution method, and an investment and distribution policy pursuant to\nsubdivision D 1. In the event that a distribution method is not elected,\ndistributions shall be limited to the net income distribution method.\n\nD. The trustee of a perpetual care trust fund may reject a cemetery\ncompany’s request to elect a total return distribution method. If a\ntrustee determines that election of a total return distribution method is\nproper, he shall:\n\n 1. Prior to implementation of the total return distribution method, adopt a\n written investment and distribution policy under which the amounts of future\n distributions from the perpetual care trust fund will be calculated under the\n total return distribution method rather than net income distribution method.\n The investment goals and objectives of such policy shall be tailored to\n achieve (i) principal growth through equity investment; (ii) current income\n through income investment, as necessary; and (iii) an appropriate balance\n between (a) maintaining purchasing power through principal appreciation and\n (b) generating income to support the cemetery company’s care and\n maintenance. A copy of such policy shall be sent to the Board with the notice\n required in subsection C;\n\n 2. Ensure that asset allocation under the perpetual care trust fund includes a\n diversified portfolio and that investment decisions are made in accordance\n with all other applicable laws of the Commonwealth;\n\n 3. Determine the fair market value of the perpetual care trust fund at least\n annually using generally accepted valuation methods and such valuation date or\n dates or averages of valuation dates as are readily ascertainable;\n\n 4. Make distributions from the perpetual care trust fund on a monthly,\n quarterly, semi-annual, or annual basis, as agreed upon by the cemetery\n company and the trustee;\n\n 5. Require that both of the following tests be met each fiscal year prior to\n allowing any distribution from the perpetual care trust fund to the cemetery\n company: (i) the fair market value of the perpetual care trust fund after the\n distribution will be greater than the aggregate of 80 percent of the fair\n market value of the perpetual care trust fund at the close of the preceding\n fiscal year plus the total contributions made to the trust principal from such\n date to the date that the method of distribution is elected and (ii) beginning\n with the third year of using a total return distribution method, a three-year\n analysis of investment returns and distribution practices indicates that such\n practices will result in sufficient protection of the trust principal. If\n either test is not met, distributions for that fiscal year shall be limited to\n the net income distribution method;\n\n 6. In the event that the taxes and fees paid by the perpetual care trust fund\n are greater than two and one-half percent of the fair market value of the\n trust at the close of the preceding fiscal year, reduce the distribution by\n the amount exceeding two and one-half percent; and\n\n 7. Maintain records documenting the fair market value of the assets held in\n the perpetual care trust fund at the end of the accounting period immediately\n prior to conversion to the total return distribution method.\n\nE. In addition to filing an annual perpetual care trust fund financial report\nwith the Board pursuant to § 54.1-2324, a cemetery company that has elected\na total return distribution method shall also file a copy of such financial\nreport at the close of each fiscal year with the commissioner of accounts in a\njurisdiction in the Commonwealth in which the cemetery company owns a cemetery.\nThe commissioner of accounts shall review the financial report and forward his\nfinalized accounting to the Board, with all reasonable fees and costs for such\nfiling and review borne by the cemetery company. A trustee shall not make any\ndistribution from a perpetual care trust fund under a total return distribution\nmethod until the review by the commissioner of accounts has been finalized. A\nreview shall be deemed finalized if the commissioner of accounts has not\nresponded or communicated any deficiencies within 60 days of the submission of\nthe financial report.\n\nF. The Board shall review all notices of conversion or reversion of perpetual\ncare trust fund distribution method for compliance with this section. The Board\nmay engage the services of a professional to review notices of conversion or\nreversion to a total return distribution method, with all reasonable costs of\nsuch review borne by the cemetery company that submitted such notice.\n\t\t\tThe Board may limit or prohibit conversion from a net income distribution\nmethod to a total return distribution method if the trustee or any investment\nmanager is not able to demonstrate sufficient knowledge and expertise regarding\neffective implementation of the total return distribution method. The Board may\nprohibit a reversion from the total return distribution method to the net income\ndistribution method if the trust principal is less than it was at the time the\ncemetery company converted to the total return distribution method, as adjusted\nfor inflation.\n\t\t\tIf a conversion to the total return distribution method has already been\nmade, the Board may limit or prohibit distributions from the perpetual care\ntrust fund if the trustee or any investment manager is not able to demonstrate\nsufficient knowledge and expertise regarding the distribution of trust income\nfor the maintenance of the cemetery using the total return distribution method.\nIn deciding whether a distribution should be limited or prohibited, the Board\nshall consider the presence and stated value of trust assets that do not have an\nactive market and are not traded on a regular basis, the frequency of appraisals\nand evaluations of such assets, the asset allocation of the trust, and whether\ntrust principal, as adjusted for inflation, is less than it was at the time the\ncemetery company converted to the total return distribution method.\n\t\t\tThe Board may require a cemetery company to restore a distribution to the\nperpetual care trust fund if (i) the distribution and all other aspects of the\ntrust were not in compliance with the requirements of this section at the time\nsuch distribution was made or (ii) the cemetery company has committed fraud\nagainst the trust.\n\nG. If a total return distribution method has been elected, the perpetual care\ntrust fund may not be reverted to a net income distribution method absent\napproval by the Board. A failure by a cemetery company to file a perpetual care\ntrust fund financial report annually with the Board as required by §\n54.1-2324 shall automatically prohibit a conversion to or continuation of a\ntotal return distribution method pending further action by the Board.\n\nH. No portion of the perpetual care trust fund shall be used to pay any personal\nobligation or debt of any officer or owner of the cemetery or any tax obligation\nincurred by the cemetery or for any purpose other than that expressly described\nin this section. Nothing in this section shall be construed to limit the ability\nof the perpetual care trust fund trustee from paying normal operating expenses\nand income taxes of the trust itself, the trust being a separate legal entity.\n\nHISTORY: 1998, cc. 708, 721; 2004, c. 192; 2012, c. 355; 2017, cc. 12, 65.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}