On examination of annual statements of cemeteries as published in Park and Cemetery and Landscape Gardening, there seem to be two kinds of perpetual care funds:
First, and the most general, are the funds given for the perpetual care of individual lots. Such funds, it seems to me, should be called "Funds for perpetual care of lots."
Second, sums set aside by the cemetery officials for the perpetual care of the whole cemetery. We will call such funds "General reserve or general care of cemetery funds." The existence of either or both of these funds assumes that the location of the cemetery is permanent and that no change in environment will necessitate abandoning the land as a burial place. Before any cemetery officials give a contract or receipt binding the corporation forever, has proper precaution been taken, through legislative action or otherwise, to assure the permanency of the location of the cemetery grounds and their perpetual use as a burial place? We all know of many instances where cemeteries have been condemned, the interments ordered removed to a different location and often the identification of those interred completely lost. Suppose perpetual care had been provided for on lots in such cemeteries, how are the officials to carry out the binding contracts of their predecessors? Is it not paramount to all other considerations that the greatest caution be exercised to insure the permanency of location?
Next to the permanency of location, the permanency of the organization must be considered. Are our cemetery companies or associations so organized that provision is made so that they can carry out the contracts for all time themselves, or turn such funds or obligation over to some organization of an unending nature, which will bind itself and its successors to carry out the original agreement? If permanency in these two vital points has been provided for, we are in a position to accept the trusts imposed upon us, but if not, it were far better for us to be honest and candid and tell our patrons that we are a short-lived body and can only agree to bind ourselves for a specified time. Assuming that perpetuity can be guaranteed, so far as human foresight can guarantee what such a stupendous word implies we are in a position to consider the "proper and legal methods of applying the principle."
The laws of the State of Wisconsin have made provision for cemeteries to accept funds for perpetual care of lots as follows:
"Every such association *** owning and using lands for cemetery purposes shall take, hold and use such gifts, bequests or devises of personal or real property or the income or proceeds thereof, as may be made in trust or otherwise, for the improvement, maintenance, repair, preservation or ornamentation of any lot, vault, tomb, chapel or other structure in such cemetery, according to the terms of the gift, bequest or devise and in accordance with such reasonable rules and regulations as may be made by the officers charged with the duty of caring for the cemetery.
"If money is given or bequeathed for any such purpose and without direction as to the manner of its investment the income of which is directed to be used for any such purposes, it shall be invested by the proper officers in bonds of the United States, of this State, or of some county, city or village, town or school district of this State, or in bond or note secured by mortgage on property in amount not exceeding one-half the value of such property. * * * It shall be the duty of * * * such treasurer or other financial officer of any cemetery association to which any gift, bequest or devise has been made for any purpose within this section, on the first secular day of January in each year to make a written report to the Judge of the County Court of the County in which the cemetery thereof is situated, showing in detail the amount of funds and the value of property which has been received for such purposes and the disposition thereof, * * *. The said Judge shall examine all accounts rendered and audit the same and also examine into the investments made and securities taken hereunder.
"Property given, bequeathed or devised and trusts created for any of the purposes herein authorized shall be exempt from taxation and from the operation of laws against perpetuities, accumulations and mortmain."
Such are the statutory provisions of the State of Wisconsin to safeguard the funds left by individuals for the perpetual care of their lots and are the "legal methods of applying the principle."
The Trustees of Forest Home Cemetery, Milwaukee, gave the matter of perpetual care of lots a great deal of consideration before drawing their contracts, or receipts for funds to be deposited and it is with great pleasure that I give you the following form as a result of their deliberations:
"Received of ________ the sum of _________ dollars to be invested and the income of which is to be expended in the manner hereinafter stated, for the perpetual care of Lot number _____, in Block number _____, in Section number _____ in FOREST HOME CEMETERY, in the County of Milwaukee, WS, in doing work on said lot as follows: _______________________________ ____________________________________________________________________________. Said sum of money has been received on the following condition, to which: That the amount received shall be invested, together with such other sums as have been or shall be received for like purposes, to the best advantage and kept in a separate fund, and the income arising from such invested fund shall, on the first day of May in each year, be apportioned as follows: One percent of the total amount of said fund shall be retained and carried into the General Reserve Fund of the Cemetery, and the balance of the income of such first named fund shall be apportioned pro rata to the several amounts in said funds and the amounts so apportioned shall be the amounts that may be expended during the current year on the lot, lots or graves, for the care of which said sums of money shall have been received. Any amount left over unexpended for any year or years on any given lot or lots or graves shall be added to the amount allowed to be expended in any subsequent year or years.
"No gift or bequest shall be entitled to any benefit from the income of the fund, unless such gift or bequest shall have been received at least one year prior to any first day of May. No gift shall be received for a less sum than one hundred dollars."
The form of contract is so simple that it does not seem to need explanation, but there may be some among us who have an inclination to use the word "why" and I will try to forestall such by giving the reasons before the questions are put. The one percent is carried to the general reserve fund for the purpose of paying the expense of looking after the investment of the moneys left in trust, and for reimbursing any loss that might possibly occur and also for the purpose of helping to maintain the cemetery, when the income from the sale of lots and other receipts have become so small as to be inadequate. While every lot owner, who is willing and wants to have his lot looked after in time to come, is particularly interested in such individual lot, he also wants to know that the drives, approaches and general appearance are kept up, and we have as yet failed to find anyone who does not see the wisdom of such provision and who is not perfectly willing to contribute his share for such purpose.
The wisdom of agreeing to spend only the income less one percent has been already shown; for, when Forest Home began taking funds for perpetual care, the prevailing rate of interest paid on first class mortgages, such as they could accept, was six and seven percent, while now it is only 4½ and five and in some instances they have accepted as low as four. Suppose the Trustees had agreed to spend five percent of the amount deposited; or a sum equal to five percent, which only a few years ago seemed like a reasonable calculation, they could not carry out the trust without loss. The management of every cemetery is now doing and always will do the best they can for their lot owners and they will get the best returns for their money obtainable with good business judgment and so depositors are and should be, satisfied to accept what the principal will bring. In case depositors are not satisfied with the form of contract issued, they have the alternative of depositing special securities and the entire income of such securities will be credited without deduction for the general reserve fund until such time as the securities so given shall mature or be paid, when the amount realized there from will be added to and invested with the special fund and the pro rata amount of the net income will be apportioned as provided for in above form of contract.
Another precaution to be observed is to avoid making contracts providing for too much detail, as they are sure to cause trouble. In a letter from one of the prominent members of our association is the following: "A contract made for setting tulips in a lot where the stone work destroys the greater part of them each year, is now making trouble for me." This contract was probably made during the time of the present incumbent and when it was made no doubt was entertained as to its practicability. If such snags are encountered in so short a time after the contract is issued, what right have we to burden our successors in years to come with provisions that to us seem reasonable, that to them maybe impossible of fulfillment? Were it not the wiser to agree to something like the following, changing the wording to cover the wishes of the depositors:
"The net income to be spent on said lot in keeping the lot, graves, monument and markers in the best possible condition" and then add, "if funds are sufficient, after the foregoing work has been done, plant and care for flower bed, or fill and water flower vase, or do any other special work as may be desired or specified”. The wisest among us cannot tell what conditions may surround our successors, and we must not do for others what we would not like to have done for us.
In one cemetery that I have heard of where contracts were made guaranteeing to "water the lot," the water supply gave out and the guarantee or agreement became, for the time being at least, null and void. Could not the depositor, if he were still living, or his heirs, if he were dead, claim that the contract had been voided by non-fulfillment and demand the refund of the amount deposited? How easily this danger could have been avoided by simply agreeing to give the best care possible to the lot.
No set rules can be made covering all cemeteries and each must work out its own problem. I would most urgently suggest the greatest caution be exercised in not making contracts or agreements that it may not be possible to carry out.
One writer to Park and Cemetery and Landscape Gardening says, "Three percent is a safe rate of interest to be allowed on perpetual care funds." Is any rate safe when United States bonds paying two percent are now selling at a premium? Suppose laws are passed making it obligatory for cemeteries to invest their trust funds in United States bonds, where is the safety of guaranteeing three percent? Not so many years ago, the trustees of a cemetery not five thousand miles away from Milwaukee, accepted funds for the perpetual care of lots and agreed to expend annually a sum equal to five percent of the principal. Fortunately there were not many of those contracts issued, for if there had been, I fear that in a few years, judging from the decline in the rate of interest in the past fifty years, the trustees of that cemetery would think their predecessors were, to say the least, not good business men. Guarantee to do only what is possible and then do it for all time.
The neglected and unsightly appearance of many of our cemetery lots, when the immediate members of the family have passed away or have moved to distant locations, plainly shows the necessity of providing for perpetual care. I heard of a case not long since where the owner of a lot who was possessed of a large portion of this world's goods, stipulated in his will that twenty-five thousand dollars should be spent in the erection of a suitable monument on his lot. The executors faithfully carried out the provision of the will and the "suitable" monument was erected, and the remaining portion of the estate, after paying sundry bequests to charitable institutions, was distributed among the heirs. Nothing was left for the perpetual care of the lot and the monument, and in an incredibly short time the heirs failed to pay any attention to the matter and the twenty-five thousand dollar monument was surrounded by a hay field, which perhaps was fortunate, as it prevented passers-by from seeing that the grave of the one whose money paid for the "suitable" monument, was badly sunken and neglected. It seems to me that this one incident is better than a whole volume on the necessity of providing for perpetual care, and I would strongly urge on each and every cemetery official to advise his lot owners to be sure to provide funds for perpetual care.
Injustice to the purchasers of lots, the subject of "General Reserve Funds" for the perpetual care of the whole cemetery must be carefully and conscientiously considered and as large an amount as possible of the annual receipts should be set aside for this purpose. The Trustees of Forest Home Cemetery set aside 20 percent of the amount received from the sale of lots and single graves, after deducting the amount paid for lots and single graves repurchased and as the general income of Forest Home is still adequate to maintain the cemetery, the income on the principal is added to the principal each year.
We are all vitally interested in making our cemeteries as beautiful as possible and we must see that funds are provided for maintaining the standard in years to come.
I. Make your location and organization permanent.
II. Secure funds for perpetual care. In doing so, first, avoid impossible contracts and, second, thus secure perpetual fine appearance of both individual lots and of the entire cemetery.
From the publication:
AACS - Proceedings of the 19th Annual Convention
Held at Washington, DC
September 19, 20, 21 and 22, 1905