Posted: August 2, 2017 at 6:43 am

Weve all heard the saying, you cant take it with you when you go, butwhat if I told you theres a way you can? Certainly celebrities like SimonCowell, Seth MacFarlane, and Larry King have indicated they would like to try,and with advances in cryonics, somethingthat has been around for a few decades, it may actually be possible. But it raisesthe question: how exactly do you go about paying to keep your body preserved, andat the same time growing (or at least preserving) your assets for use when youfinally come back to life? The simple answer . . . the aptly named cryonicpreservation trust.[1]

A cryonic preservation trust (CPT) functions similarly to a typical dynastytrust, but with a few different twists. For one, you must consider how to gaugethe life of the trust taking into consideration the rule against perpetuities(RAP). The logical solution is to make the cryopreservation institution abeneficiary, or simply establish your trust in a state that has done away withthe RAP, like Delaware, South Dakota, and Alaska. Of course, the grantor would have to be theprimary 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 viableoption, so building in flexibility for a CPT to last 100 or even 1,000 years isnecessary.

Another major difference is the list of potential beneficiaries. Whereasa typical dynasty trusts beneficiaries will be the lineal descendants of thegrantor, the purpose of a CPT is to provide the grantor with a trust incomestream to pay the annual cryonic preservation fees, and with assets when he orshe is revived. Wealthier individuals may still be able to sprinkle some of theincome generated from the assets in the CPT to lineal descendants or charity,but because they want access to the corpus when they are revived, thisnecessitates a reversion provision. But what happens if the grantor is neverrevived? Logic tells us that the CPT could simply continue on as a traditionaldynasty 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 anindividual afford to pay for potentially hundreds of years of cryonicpreservation 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 theindividual 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 fundingamount of $200,000, of which $115,000 goes to the Patient Care Trust, $60,000 isfor cryopreservation, and $25,000 to the Comprehensive MemberStandby Fund. These fees are typically paid for with a life insurancepolicy for the benefit of Alcor, but can also be paid in cash or by using aCPT. It is important to note, however, that these fees are only forcryopreservation and revival, and do not include any medical treatmentnecessary 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 assetswould grow over the course of the individuals biostasis period.

The second question is probably best answered by going through ahypothetical scenario. Mr. Doe is a retired, 70-year-old widower with twochildren Jane (40 and married with one child of her own) and John (45 and marriedwith two children). He has a net worth of $5.49 million. Mr. Doe suffers froman incurable disease and wishes to be cryogenically preserved when he dies inhopes that he will be revived when a cure has been discovered. He also wants to provide a little for hischildren 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 payfor his cryopreservation, provide income to his lineal descendants and charity,and grant him access to his assets once he rises from the dead. You rememberhearing about CPTs, and are very familiar with dynasty trusts, so you tell himyou know exactly what to do.

You begin drafting an ordinary dynasty trust, but start makingmodifications to ensure that the trust is valid, and limits beneficiarychallenges as much as possible. Below are a few modifications you shouldconsider:

Select an institutional trustee (forcontinuity);

Nominate a trust protector (typically a lawfirm) to ensure that Mr. Does wishes are carried out;

Provide beneficiaries with discretionarydistributions (perhaps limiting them to an ascertainable standard);

Include an interrorem clause that would disinherit a beneficiary if he or she challengesthe trusts validity;

Include a charitable beneficiary to furthersupport that the trust has eligible named beneficiaries;

Include a reversion provision (because afterall, the primary purpose of the trust is to allow Mr. Doe to have access to hisfunds when he is revived);

Consider establishing multiple CPTs withdifferent purposes, funded with different assets;

Have the trust purchase a life insurance policyon Mr. Does life with the assets transferred;

Allocate all remaining gift, estate, andgeneration-skipping transfer tax exemption;

Provide for discretionary distributions to fundtechnological advances in cryopreservation and medical care so that Mr. Doe maybe revived more quickly; and

In the event Mr. Doe is never revived, thenprovide for the complete distribution of trust assets to named beneficiariessuch as his lineal descendants and the named charity or charities.

This list is not meant to be exhaustive, but itdoes provide you with several considerations when drafting a CPT. Remember thatwhen Mr. Doe is cryogenically frozen, he is legally considered dead, so theusual 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 ithappens.

Foreverything necessary to research, plan, and implement strategies for maximizingyour clients control while minimizing taxes, take a freetrial to the Estates,Gifts and Trusts Portfolios Library.

[1]These trusts are also referred to as cryonic suspension trusts, personalrevival trusts, or just cryonics trusts.

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