We’ve all heard the saying, “you can’t take it with you when you go,” but what if I told you there’s a way you can? Certainly celebrities like Simon Cowell, Seth MacFarlane, and Larry King have indicated they would like to try, and with advances in cryonics, something that has been around for a few decades, it may actually be possible. But it raises the question: how exactly do you go about paying to keep your body preserved, and at the same time growing (or at least preserving) your assets for use when you finally come back to life? The simple answer . . . the aptly named “cryonic preservation trust.”
A cryonic preservation trust (“CPT”) functions similarly to a typical dynasty trust, but with a few different twists. For one, you must consider how to gauge the life of the trust taking into consideration the rule against perpetuities (“RAP”). The logical solution is to make the cryopreservation institution a beneficiary, or simply establish your trust in a state that has done away with the RAP, like Delaware, South Dakota, and Alaska. Of course, the grantor would have to be the primary beneficiary to reclaim his or her assets when he or she awakens from cryopreservation. We really have no idea when revival from cryopreservation will be a viable option, so building in flexibility for a CPT to last 100 or even 1,000 years is necessary.
Another major difference is the list of potential beneficiaries. Whereas a typical dynasty trust’s beneficiaries will be the lineal descendants of the grantor, the purpose of a CPT is to provide the grantor with a trust income stream to pay the annual cryonic preservation fees, and with assets when he or she is revived. Wealthier individuals may still be able to sprinkle some of the income generated from the assets in the CPT to lineal descendants or charity, but because they want access to the corpus when they are revived, this necessitates a reversion provision. But what happens if the grantor is never revived? Logic tells us that the CPT could simply continue on as a traditional dynasty trust. The reversion provision would be based on an event uncertain (the grantor rising from the dead), and if that event never comes to fruition, then the reversion would never happen.
Perhaps the two greatest questions, however, are: 1) how can an individual afford to pay for potentially hundreds of years of cryonic preservation and expect to have assets remaining when they are revived?; and 2) what are the estate tax consequences (if there even is an estate) when the individual is cryogenically preserved?
The answer to the first question is fairly simple. The Alcor Life Extension Foundation (Alcor), perhaps the most well-known cryopreservation organization, requires a minimum initial funding amount of $200,000, of which $115,000 goes to the Patient Care Trust, $60,000 is for cryopreservation, and $25,000 to the Comprehensive Member Standby Fund. These fees are typically paid for with a life insurance policy for the benefit of Alcor, but can also be paid in cash or by using a CPT. It is important to note, however, that these fees are only for cryopreservation and revival, and do not include any medical treatment necessary to cure the previously incurable disease that the grantor died from. For this reason, it would make sense to implement a CPT so that the assets would grow over the course of the individual’s biostasis period.
The second question is probably best answered by going through a hypothetical scenario. Mr. Doe is a retired, 70-year-old widower with two children Jane (40 and married with one child of her own) and John (45 and married with two children). He has a net worth of $5.49 million. Mr. Doe suffers from an incurable disease and wishes to be cryogenically preserved when he dies in hopes that he will be revived when a cure has been discovered. He also wants to provide a little for his children and grandchildren. So how would he go about doing this?
Mr. Doe comes to you asking to design a plan that will allow him to pay for his cryopreservation, provide income to his lineal descendants and charity, and grant him access to his assets once he rises from the dead. You remember hearing about CPTs, and are very familiar with dynasty trusts, so you tell him you know exactly what to do.
You begin drafting an ordinary dynasty trust, but start making modifications to ensure that the trust is valid, and limits beneficiary challenges as much as possible. Below are a few modifications you should consider:
Select an institutional trustee (for continuity);
Nominate a trust protector (typically a law firm) to ensure that Mr. Doe’s wishes are carried out;
Provide beneficiaries with discretionary distributions (perhaps limiting them to an ascertainable standard);
Include an in terrorem clause that would disinherit a beneficiary if he or she challenges the trust’s validity;
Include a charitable beneficiary to further support that the trust has eligible named beneficiaries;
Include a reversion provision (because after all, the primary purpose of the trust is to allow Mr. Doe to have access to his funds when he is revived);
Consider establishing multiple CPTs with different purposes, funded with different assets;
Have the trust purchase a life insurance policy on Mr. Doe’s life with the assets transferred;
Allocate all remaining gift, estate, and generation-skipping transfer tax exemption;
Provide for discretionary distributions to fund technological advances in cryopreservation and medical care so that Mr. Doe may be revived more quickly; and
In the event Mr. Doe is never revived, then provide for the complete distribution of trust assets to named beneficiaries such as his lineal descendants and the named charity or charities.
This list is not meant to be exhaustive, but it does provide you with several considerations when drafting a CPT. Remember that when Mr. Doe is cryogenically frozen, he is legally considered dead, so the usual estate filings will be required. No one has been revived from cryostasis, so it is still to be seen what the tax consequences will be if or when it happens.
For everything necessary to research, plan, and implement strategies for maximizing your clients’ control while minimizing taxes, take a free trial to the Estates, Gifts and Trusts Portfolios Library.
 These trusts are also referred to as “cryonic suspension trusts”, “personal revival trusts”, or just “cryonics trusts.”
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