(Bloomberg Law) -- Nobody wants to come back from the dead poor.
Luckily for the rich, making wealth immortal is more solvable than reversing death.
Estate attorneys are creating trusts aimed at extending wealth until people who get cryonically preserved can be revived, even if it’s hundreds of years later. These revival trusts are an emerging area of law built on a tower of assumptions. Still, they’re being taken seriously enough to attract true believers and merit discussion at industry conferences.
“The idea of cryopreservation has gone from crackpot to merely eccentric,” said Mark House, an estate lawyer who works with Scottsdale, Ariz.-based Alcor Life Extension Foundation, the world’s largest cryonics facility with 1,400 members and about 230 people already frozen. “Now that it’s eccentric, it’s kind of in vogue to be interested in it.”
By one estimate, about 5,500 people are planning for cryogenic preservation. House estimates he’s worked with about 100 such people.
He and others are trying to answer questions that at times seem more like prompts in a philosophy class.
Can money live indefinitely?
Are you dead if your body is cryonically preserved?
Are you considered revived if you have only your brain?
And if you’re revived, are you the same person?
How to Hoard Money
For Steve LeBel, a retired hospital executive in Michigan, the chance to join the approximately 500 people already frozen sounds like a dream come true.
LeBel, 76, is always finding new ways to spend his time, most recently as a writer of a young-adult fantasy novel. He loves living and doesn’t want money to stand in the way of a second chance.
LeBel said he has searched for about a year for a trust model most likely to hold up through centuries.
He plans to put $100,000 in his revival trust, with the rest going to his daughter and her husband and his foundation.
“I really want to figure out a solution, otherwise I’ll be in there with my fingers crossed, hoping there’s money left over, 200 years from now, to pay for the resurrection process,” LeBel said.
Who ‘You’ Really Are
The revival trust is a twist on the dynasty trust, a tool used by ultra-wealthy people who plan to pass wealth down to multiple generations.
Both can help avoid the 40% federal tax on estates worth more than $13.6 million, though investment gains are subject to income tax and trustees charge fees that can be steep. (House requires clients to have at least $500,000 to stash in the trust to ensure that fees don’t drain it.)
The difference is the beneficiaries.
House considers the revived person to be different in the eyes of the law, in part because a person can’t be the beneficiary of their own trusts. When he creates these trusts for clients, the only beneficiary is the revived person.
Trying to reverse a death certificate muddies the legal waters, House said. He names a trust protector—some person or entity that can modify the trust agreement—with the power to determine whether revival has happened.
To Peggy Hoyt, a Florida-based estate planner, the revived person is the same person.
She said trusts need active beneficiaries, so she often stipulates that the client’s family members or cryonic facility will receive money while they’re frozen. Including the cryonic facility or a charity allows for some assurance that the trust will have a beneficiary, even if the client’s heirs die. She also requires clients to explain their personal definition of revival.
“Some people will say they consider revival only if they’re the same person they are today with all their memory intact,” Hoyt said. “Some people are content to say that a human clone would be equivalent of revival. Others said they don’t care if they have a body if their brain is uploaded to a computer.”
Perpetual Trusts
Revival trusts also push the limits of laws against perpetual trusts, which are intended to prevent rich families from hoarding money for generations.
Many state laws restrict trusts’ lifespan to 90 to 100 years. But some states have repealed or extended the rule against perpetuities, to compete for the investment income tax from trusts, said George Bearup, a senior legal trust adviser at Greenleaf Trust.
Arizona, where House lives, now allows trusts to continue for 500 years. In Florida, it’s 1,000 years.
“It started to get people thinking, ‘Well, if I had a trust for 1,000 years, what do I want to do?’” Bearup said. “I think that precipitated some of these people thinking about preserving their body.”
What Could Go Wrong
Much like the prospects of revival, the trust structures are a leap of faith that could go sideways if policies or businesses change. That’s one reason Bearup hasn’t attempted one of these arrangements.
“I would probably run the other direction,” he said. “How do you draft for something that could take place in 1,000 years from now? Who knows what the rules will be?”
Cryonic estate planners are grappling with the potential implications of the Alabama Supreme Court’s ruling in February that frozen embryos are children and subject to the state’s wrongful death law.
An arrangement must account for the emergence of technology and medical procedures not yet invented. The federal government could conceivably outlaw perpetuities. Trusts typically are managed by trust companies or banks, but no one knows if a trustee will still exist when a person is revived.
That’s why flexibility and succession planning for trust managers and protectors is key.
“When you start looking at a multi-century time frame, you can’t have anything static,” House said.
LeBel doesn’t want to take the risk of a bank or trust company as the trustee. He’s working with the board of the Michigan-based Cryonic Institute to try to get that preservation facility to double as a trust company, which he sees as a surer model.
House said he’s been working with Alcor to create trust protector committees that would have new members appointed after a certain number of years. When the original protector named in each arrangement dies, the committee takes over.
The revival trust should specify what happens if some term in the trust fails or if, years from now, scientists figure out it’s impossible to resurrect the dead from a frozen head, said Victoria Haneman, a Creighton University trust and estate professor who studies the tax consequences of revival.
If revival isn’t possible, a court would review the trust. The terms of the trust should include what happens to the money in that scenario, such as naming a charity that could receive the funds, Haneman said.
But who decides that revival isn’t possible?
Rich People, Immortality
Still, the fascination with immortality and its implications is undeniable.
As science improves, more people are seeing cryopreservation as their last great experiment. Tech moguls Jeff Bezos, Sam Altman, Larry Ellison, and Larry Page have pledged hundreds of millions of dollars toward companies trying to defy death and aging.
Earlier this month, Cradle Healthcare Co., led by biotech child prodigy and longevity investor Laura Deming, came onto the cryonics scene with $48 million and a promise to develop rewarming technology that’s key to revival. The move added much-needed credibility to the industry.
“I believe the aging process is going to be cured,” LeBel said. “It’s a disease. The technology isn’t there yet, but I can bridge that time gap with cryonics.”
To contact the reporter on this story: Erin Schilling in Washington at eschilling@bloombergindustry.com
To contact the editors responsible for this story: Bernie Kohn at bkohn@bloomberglaw.com ; Martha Mueller Neff at mmuellerneff@bloomberglaw.com
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