by Marica l. Sutton, B.A., Communication, University of San Diego Paralegal Student
DeEtte L. Loeffler, J.D., LL.M., Taxation
Usually when a Trustor creates a Trust, there is intent to leave the estate to living beneficiaries or active entities. A recent surge in media focus has put a spotlight on the cryogenic preservation process. Some individuals are creating Personal Revival Trusts (“PRT”s) which name them as both the Trustor and as the future Beneficiary. Legal challenges are surfacing in the structure, enforcement, and termination of PRTs as the popularity and science behind cryogenics seemingly advances.
The effectiveness of a PRT depends on an individual being successfully “revived” after being cryogenically frozen post-mortem. Cryonics is the practice of using liquid nitrogen at incredibly cold temperatures to preserve a recently deceased person. There is a hope by those investing in this technique that, in the future, humans will have advanced scientifically to the point in which all diseases will be cured, age can be reversed, and death can be evaded. The goal for the previously deceased individuals who were frozen is to be revived and live off of the funds in the PRTs they established.
PRTs are often structured like a Dynasty Trust. In Dynasty Trusts, assets are held for many generations and distributed at various points in time. A well-organized plan for the succession of Trustees is needed in order to ensure there will always be someone or some entity to perform the trust administration. Beneficiaries of the trust must be living at the time in which the assets are distributed. In most of these types of trusts, there are provisions for individuals that are not yet born. If the beneficiary is non-existent or deceased, the assets skip to the next generation.
What happens when the deceased Trustor is the beneficiary? If the Trustor is never revived, then the trust could essentially continue to exist for eternity. Many states, including California, put limits on the length of time a trust can exist (also known as the “Rule against Perpetuities). However, at least 20 states have now repealed this rule. In the states where PRTs are legal, construction of the trusts must be very concise and include details of the Trustor’s wishes in every possible situation (i.e. in what circumstances can the Trust be terminated, who receives the balance, etc.).
In states in which PRTs cannot yet be established, provisions for cryogenic preservation can still be made inside a trust and funds can still technically be held for the future benefit of the Trustor until the revival. These trusts would resemble a normal trust, but name the facility in charge of the cryogenic process as the beneficiary. Some popular facilities include Alcor Life Extension Foundation and the Cryonic Institute. This type of trust restricts the use of trust principal and terminates upon the revival of the “patient” in the facility’s care.
Another challenge that comes up when creating PRTs is jurisdiction. Which court, at any point in time, has the legal authority to approve the trustee’s actions or resolve disputes involving cryogenically-preserved Trustors? Obviously, upon the death of the Trustor, probate court is likely to hear all issues concerning the trust. In the case of revival, would the case be heard elsewhere?
If the PRT does not have a living beneficiary, it may also be challenged by potential heirs. Family members or beneficiaries with moral objections to the cryogenic process may claim that the Trustor was subjected to the fairy tale of immortality and under undue influence by money-hungry cryogenic institutions. Will the courts be more sympathetic to the living family members or respect the wishes of the Trustor?
Assuming that the PRT goes unchallenged, another issue arises - who is in charge of the revival and when should the Trustor be revived? The PRT should contain a very detailed description of the Trustor’s intent. Often, the cryogenic institute will be named as Trustee, but various professional Trustees can also be assigned. The Trustor may indicate a specific revival date in his/her Trust (i.e. September 2116) or leave the revival date up to the Trustee’s judgment. This date would be some time in the future in which revivals have a high success rate, most illness has been eradicated, and the effects of aging have either been reversed or minimized. A Trustor can even be as detailed as “Revival should be on the day in which the average age for humans is 220 years old.”
Most cryogenic institutes encourage Trustors to name the institute on insurance policies. The cost of the procedure can range from $30,000 to $150,000 to ensure there are sufficient funds to preserve the Trustor’s body until it is revived. The institutes are not allowed to tap into the PRT funds. These funds are exclusively reserved for post-revival care. In the case that a cryogenic institute goes bankrupt, the Trust should include a provision requiring the assets, be transferred to another comparable facility or, if none, for termination of the Trust.
Finally, the circumstances in which a PRT may be terminated should be explicitly laid out in the articles. The Trustor can allow the Trustees, courts, or heirs to make this decision. There should be a clear indication where the remaining assets should go and what arrangements to make for the Trustor’s body. In drafting a PRT, the Trustor must give thought to every possible situation that could happen in the future before, during, and post-revival.
Cryogenic preservation may seem like science fiction now, but some individuals are taking this fringe-science very seriously. From average citizens to celebrities like Simon Cowell and Larry King, investments for an extended future are becoming increasingly popular. Forming a trust that can properly fund the process, the revival, and life after the revival can be as challenging as the process itself. Personal Revival Trusts cannot be established in many states. For this reason, some people are resorting to loop-hole trusts that name the cryogenic institute as the beneficiary. A lot of consideration must be taken into account when terminating a trust, because it is essentially terminating the Trustor’s second chance at life. The future holds some very interesting possibilities in cryogenic preservation, estate planning, and trust administration.