Editor’s note: Rudi Hoffman is an insurance salesman specializing in cryonics-related insurance policies. He’s also a deep thinker about cryonics and life extension, and an incredibly funny guy. So, we thought it would be interesting to have Rudi tell our readership about cryonics trusts — the notion of setting up a trust to fund your own revival and post-resuscitation life. He put together a few words on some of the misconceptions he encounters when talking to people about the concept of cryonics trusts.
If you’re not familiar with cryonics in general, you might want to check out the Alcor Cryonics FAQ. It’s an interesting option for those who favor radical life extension, and aren’t confident the Methuselarity will occur during their lifetime. Depending on the provider you choose, it can also be quite expensive, which is where cryonics life insurance providers like Rudi come in.
Seven Silly Superstitions About Cryonics Trusts
“Doctor, it looks like this patient is dead. But there is a cryonics medical team standing by in the hall ready to start him on his ambulance ride to the future.”
Or it could be “He’s dead, Jim… I am a doctor, not a miracle worker!”
These words might be among the last you may hear… or not hear, having given up the proverbial and almost certainly mythical “ghost” a few moments earlier.
The point being, you have signed up and properly funded your cryonic suspension. You have been very precise in handling your affairs, you were clear and unequivocal with your instructions to family and friends, putting your wishes in writing with family as well as your cryonics organization. You have a specially tasked life insurance policy or annuity, designed to avoid hassles of probate as well as unsupportive relatives. You even went the extra step of making a video with witnesses documenting your desire to be cryonically suspended when the time came. You are absolutely determined to get this vital plan right in every way you can.
And now this time has come. Goodness, how could a life go by so fast?
Have you done all you can do to secure the greatest chance of revival, of your personal cryonics program working?
Only if you have established one or more cryonics trusts, well and properly funded with life insurance and assets.
Cryonics trusts are a new idea — no one has thought of this or worked out this idea before.
Cryonics trusts and planning for wealth upon revival is not a new idea. Questions about cryonics estate and trust planning were being asked and explored by pioneers as early as the 1980s. These questions were also asked to me, as well as by me as early as early 1994 when I signed up with Alcor. The history of cryonics back to early days is an series of lessons in real world finance, in many cases hard lessons like the Chatsworth cryonics tragedy, a function of unrealistic funding structure for maintenence of cryonics patients.
Out of these funding tragedies, real world experience has emerged. The cool thing about this is that you and I can benefit from the work that has gone before us. The underbrush has been cleared and a smoother path is now available for us to travel regarding cryonics trusts.
Because I am a Certified Financial Planner as well as the leading writer of life insurance to fund cryonic suspension in the world, with about 83% of the world market in this niche, my clients have continually asked about cryonics trusts and mechanisms to preserve and grow their assets while in suspension.
It is easy to procrastinate on ideas like this, even if you think they are a good idea. I did exactly this from 1994 to 1999. While I continued to talk with attorneys, I was hoping, perhaps just as you are, that a smarter and wealthier cryonicist would magically have some verbiage created I could simply copy.
Sorry. The path is cleared of underbrush, some pavement has been laid, but you still have to walk it yourself.
This “magic verbiage I get for free I can just copy”, of course, did not happen for me… nor will it happen for you. But, there is good news.
In 1999, after extensive interviews with many cryonicists and attorneys, I paid what seemed to me to be a lot of money to have some very high powered estate planning attorneys design the “Hoffman Prototype Cryonics Trust.” This now adds to the growing number of available model trusts designed to safeguard and grow your assets while you are in suspension.
A completely separate initiative, very close to being unveiled, is the “Alcor model trust”, another prototype trust that is designed as a template and starting point for you and your attorney. Having been asked to review the current iteration of this trust (there have been many iterations, Alcor board member Ralph Merkle and his team have worked hard on this), I can say this trust has been well thought out to protect and grow your assets over time. The trustees of the trust… the individuals who are responsible for carrying out your wishes on your behalf, are appointed by both you and Alcor. The trust is designed to protect both your interests and accumulating assets, while maintaining the legal and structural separations necessary to not endanger the 501 (c) (3) charitable status Alcor operates within.
Additionally, there are private trusts and foundations which are intentionally not publicly known. The discretion regarding these trusts is necessary, but this does not mean that a legitimate cryonicist may not have access to using these.
Cryonics trusts are only for the wealthy and megawealthy.
If the archetypal “Joe Sixpack” has heard of cryonics at all, it is almost a certainty that he thinks this technology is far beyond his financial resources. In a similar manner, many cryonicists think that having a cryonics trust is only for folks much wealthier than they are.
These myths are wrong… and they are wrong for the same reason. The magic of life insurance! Just as you can fund the cost of cryonic suspension with life insurance, you can leverage your resources to fund one or even several cryonics trusts with life insurance! Suddenly, you have an epiphany… this could be doable for folks like you. You of course know that you don’t have to set aside 80 or 110 or 150 thousand dollars away from your family to fund your suspension. And now you understand that you can create a large fund of many thousands or hundreds of thousands of dollars… or millions of dollars… to fund your cryonics trusts in the same brilliant manner.
Additionally, just like your cryonics life insurance funding does not reduce the amount going to your family at death, the additional funds created by your trust policy do not reduce the amount going to your family. In addition to the multiple tax and estate planning benefits of the life insurance proceeds being not subject to income or estate taxes, they allow you to fund your cryonics and cryonics trusts without shortchanging the people you love.
If you are fortunate enough to have substantial assets, doing a single premium policy not only leverages the dollars committed to the trust, but structures the assets outside of your probated and taxable estate. This is why smart and wealthy people typically own good size permanent life insurance plans.
Cryonics trusts are outlandishly expensive to set up and maintain.
Well, at one time they were. I have talked to people who invested between one hundred and two hundred thousand dollars to set up a cryonics trust, and many thousands yearly to maintain it.
There is a reason for the maxim “The pioneers get the arrows.”
The good news for you and I is that we can benefit as early adopters but not initial adopters of this technology.
If your goal is simply adding a cryonics trust and life insurance policy to your plans, this can happen for perhaps one or two thousand to set up and the life insurance premiums of perhaps a thousand a year. Be advised this is different than the complete planning referenced in Superstiton 6… but it may enable you to start getting your head around making this happen.
This means you have waited for this technology to fall in cost perhaps by two orders of magnitude. Like the iPhone 4 on my desk, you can have a technology virtually indistinguishable from magic at an affordable cost due to pioneering visionaries who proceeded you.
“Rules against perpetuities” are a major problem for cryonics trusts.
Did you ever hear the phrase “A little knowledge is a dangerous thing?” Well, if you want this confirmed you may want to talk with someone who has a “little knowledge” about cryonics trusts. In an attempt to advertise their astounding depth of knowledge and extensive research in this arcane field, you may talk to an attorney or layman who gravely intones, “Laws against perpetuities make cryonics trusts illegal or unlikely or unenforceable.”
While there are significant challenges in setting up a viable and effective cryonics trust, the “Rules against perpetuities” are pretty much a non-issue. These laws have been abolished by statute in states including Alaska, Idaho, New Jersey, and South Dakota. If you work with an attorney familiar with and even specializing in cryonics trusts like Peggy Hoyt in Florida, or John Dedon in Virginia, drafting language enabling your trust to go for a very long time… hundreds or thousands of years… is possible. You can have local counsel in your state, and still utilize the expertise of these experienced cryonics trust drafting attorneys.
Cryonics trusts won’t work because dead people have no rights.
Most cryonics model or prototype trusts available utilize a “dynasty trust” format. This basically sidesteps the question of whether someone pronounced dead and currently in biostasis is well and truly, permanently “dead.” This format, used by wealthy folks seeking to control their assets even after traditional death, has been used for many decades. Basically, you direct a trustee to act in your behalf to carry out the terms of the trust. This does not require new law be made determining whether you are “dead enough” or even “too dead to have rights.”
Historically, a wealthy person might establish a dynasty trust to enable “control from the grave.” Such a trust can specify contingencies that must be met for certain things to happen, such as “My son will get his inheritance only if he graduates from Harvard with a B average or better.”
As an interesting personal aside, it is highly confirming to me that three completely separate attorney groupings all arrived independently at this “Dynasty Trust” format when drafting cryonics trusts. These three groups were operating in isolation from each other, in different states and working for interests of three different cryonicists seeking to develop a cryonics trust.
There is no difference between having a cryonics trust vs. having a comprehensive estate plan.
Depending on your assets and size and complications of your personal situation, there is a whopping amount of difference!
I’ll be candid with you, I really should have understood this distinction, both because of my personal trust research and because of thirty two years in financial planning and brokerage. But, embarrassing as this to admit, I did not until recently. Sitting in Peggy Hoyt’s law office with my wife, I finally realized the distinction between simply having access to some trust verbiage, compared to the depth of understanding required to craft a genuine integrated and comprehensive estate plan. Making sure every component of your plan is properly funded, titled, structured, and monitored. Having Peggy ask “what if?” questions to possibilities my wife and I had never considered, I was taken aback to realize the quantity of “unknown unknowns” in legitimate long term planning.
There is a range of quality in nearly everything. Extreme specialty legal planning advice, kind of like heart surgery, is an arena where quality and skill of the practitioner is vital. If you were having heart surgery, you want the most experienced and skilled professional possible, not the cheapest who is learning on your time.
A bicycle and a Learjet are both forms of transportation, but the distinctions in what they cost and what they are designed to do are extreme.
You may need a bicycle. Or you may need a Learjet.
Your interests in a cryonics trust may be served by simply increasing your life insurance and naming an existing foundation as a partial beneficiary. This is equivalent to the bicycle, and may get you where you want to go. Your cost could be exactly zero dollars for the trust part, just a little time to do some research, and some affordable amount for the additional life insurance.
On the other hand, if you have total assets totalling $300,000 or more, or have a complicated family situation, or a family member who is potentially not supportive of your interest in cryonics, you have a different situation. For comprehensive and world class expertise you will need and want, it is reasonable to expect to spend five to twelve thousand dollars. Is this expensive? Compared to what? Compared to creating chaos and broken relationships among the people you love? Compared to tens or hundreds of thousands of dollars… or millions… lost to unnecessary taxes? Compared to your plans for cryonics trusts not being set up correctly, or even your basic suspension being a disaster?
But you are different, right? Your family is not going to do what a recent Alcor member’s daughter did, delaying her suspension by weeks after pronouncement of death, are they?
Right now more than half of fully signed cryonicists are getting suboptimal suspensions, based on the actual case records as recorded on the Alcor and Cryonics Institute websites. Guess what? We all think we are different…our family is different… those things won’t happen to us.
But they can and will. Unless you are smart enough to take advantage of the expertise that has been developed to protect yourself and your loved ones.
My cryonics organization, friends, and rich people in the future will take care of me, and mature nanotech means that money will no longer be needed.
If you have this entitled attitude, as yourself, how do you feel about paying for your sister’s medical bills? You like your cousin, sure, but will you really want to go into debt to pay $250,000 for his long term cancer therapy? You think just because you are so dadgum special that the enormous amount of technical expertise it will take to resuscitate you is a certainty? Would it be unprofessional in this article to say you may be a jerk? I have to believe that most cryonicists are truly smarter than this. I hope you are smarter than this. The cost of resuscitation in an optimal state is a huge unknown. Remember that “range of quality” issue that seems to be a basic principal of the universe? I don’t think this one is going away when Robert Frietas develops nanobots to swim around your bloodstream.