California Funeral Director License Practice Exam

What records must be kept for trust funds?

1. Invoices and receipts

2. Trust policies and account balances

3. Individual contract, ledger account, receipts, disbursements, portfolio of investments

4. Client communication logs

The correct answer is: Individual contract, ledger account, receipts, disbursements, portfolio of investments

The retention of accurate records for trust funds is crucial in the funeral industry to ensure compliance with legal and ethical standards. Choice C includes individual contracts, which outline the specific agreements made with clients, as well as ledger accounts that track all financial transactions related to each trust fund. This is essential for transparency and accountability. Receipts provide documentation of payments received into the trust fund, while disbursements record any withdrawals made from the fund, ensuring that all funds are used according to the clients' wishes. The inclusion of a portfolio of investments is also important as it shows how the trust funds are being managed and what returns are being generated, which is essential for financial oversight and determining the future value of the trust for beneficiaries. Maintaining such comprehensive records not only fulfills regulatory requirements but also builds trust with clients and their families, ensuring that funds meant for funeral services are secure and properly accounted for throughout the life of the trust.