North Carolina Funeral Law Practice Exam

How often do burial associations have to place a portion of their assessments into a reserve account?

1. Only once

2. Anually

3. Every assessment cycle

4. Monthly

The correct answer is: Every assessment cycle

Burial associations are required to maintain a reserve account to ensure that they can meet their financial obligations, especially for covering the costs associated with funeral services. The stipulation to place a portion of their assessments into a reserve account every assessment cycle is crucial for the financial health of the organization. By doing so, they ensure that they have sufficient funds available to meet claims as they arise, which promotes both stability and trust among members. This practice also helps safeguard against unforeseen financial shortfalls and ensures that the association can operate effectively over time, providing ongoing support to its members' families at the time of need. Setting aside funds every assessment cycle allows associations to adapt their reserves according to the number of assessments collected and any fluctuations in their expenses or liabilities. This continuous funding mechanism is a sound financial practice, reflecting the best interest of the members who rely on these funds for future services. Other options, such as once, annually, or monthly, do not align with the design of a solid financial strategy that supports the longevity and efficacy of burial associations.