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Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets
 12 Months Ended
Dec. 31, 2021
Cemetery Perpetual Care Trust Investments And Obligation And Restricted Assets  
Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets

8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets

 

State law requires the Company to pay into endowment care trusts a portion of the proceeds from the sale of certain cemetery property interment rights for cemeteries that have established an endowment care trust. These endowment care trusts are defined as variable interest entities pursuant to GAAP. Also, management has determined that the Company is the primary beneficiary of these trusts, as it absorbs both a majority of the losses and returns associated with the trusts. The Company has consolidated cemetery endowment care trust investments with a corresponding amount recorded as Cemetery Perpetual Care Obligation in the accompanying consolidated balance sheets.

 

The components of the cemetery perpetual care investments and obligation are as follows:

 

   2021   2020 
   December 31 
   2021   2020 
Cash and cash equivalents  $1,059,519   $402,913 
Fixed maturity securities, available for sale, at estimated fair value   784,765    747,767 
Equity securities, at estimated fair value   3,302,480    2,062,303 
Participating interests in residential construction mortgage loans held for investment with Security National Life   1,823,533    1,468,600 
Real estate held for investment   865,424    1,731,584 
Total cemetery perpetual care trust investments   7,835,721    6,413,167 
Cemetery perpetual care obligation   (4,915,285)   (4,087,704)
Trust investments in excess of trust obligations  $2,920,436   $2,325,463 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

 

8) Cemetery Perpetual Care Trust Investments and Obligation and Restricted Assets (Continued)

 

The Company has also established certain restricted assets to provide for future merchandise and service obligations incurred in connection with its pre-need sales for its cemetery and mortuary segment.

 

Restricted cash also represents escrows held for borrowers and investors under servicing and appraisal agreements relating to mortgage loans, funds held by warehouse banks in accordance with loan purchase agreements and funds held in escrow for certain real estate construction development projects. Additionally, the Company elected to maintain its medical benefit fund without change from the prior year and has included this amount as a component of restricted cash. These restricted cash items are for the Company’s life insurance and mortgage segments.

 

Restricted assets are summarized as follows:

 

   2021   2020 
   December 31 
   2021   2020 
Cash and cash equivalents (1)  $9,000,293   $8,842,744 
Fixed maturity securities, available for sale, at estimated fair value   1,601,688    1,473,637 
Equity securities, at estimated fair value   3,603,822    2,515,778 
Participating interests in mortgage loans held for investment with Security National Life   2,732,319    3,317,877 
Total  $16,938,122   $16,150,036 

 

 
(1) Including cash and cash equivalents of $7,869,295 and $852,499 as of December 31, 2021 and 2020, respectively, for the life insurance and mortgage segments.

 

A surplus note receivable in the amount of $4,000,000 at December 31, 2021 and 2020, from Security National Life, was eliminated in consolidation.

 

See Notes 1 and 17 for additional information regarding restricted assets.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020