Fourth Asset Preservation Group meeting
On the weekend of April 23-25 I attended a meeting of the cryonics Asset Preservation Group held at the estate of Ken Weiss near Gloucester, Massachusetts
I will try to give a few brief summaries without going into detail about every presentation.
Lori Rhodes, who is Terasem’s Legal Researcher, is working to create legally recognized category of autopsy specific for cryonics projects. I am admittedly somewhat cynical about the prospects of getting the rights of a tiny and ill respected minority such as cryonicists recognized by the legal system, but perhaps I am wrong. Marvin Minsky, who attended this meeting with his wife, has influential friends in high places who might be of help.
Lori mentioned that because of better diagnosis and imaging tools, the autopsy rate has been dropping.
Mike Perry distributed his paper “Options for Brain-Threatening Disorders” and discussed its contents. He mentioned Terasem’s CyBeRev project for storing “mindfiles” from which it is hoped that individuals could be reconstructed. The Society for Universal Immortalism — of which Mike is President — has a similar project, but UI will also store resin-embedded genomic samples at room temperature.
Mike discussed Voluntary Stopping of Eating and Drinking (VSED) as an option from cryonics patients with a brain-threatening disease. He discussed the book A HASTENED DEATH BY SELF-DENIAL OF FOOD AND DRINK by Boudewijn Cabot
In June 1990 Linda Chamberlain’s mother was able to use VSED for cryonics purposes with sympathetic assistance in a hospital because lung cancer had metastasized to the brain and she was legally “terminal”. This might not be so easy for an Alzheimer’s Disease patient who still had enough wits to know what to do, but was not far advanced enough to be classified as terminal. Mike mentioned Switzerland, where assisted suicide is legal, and citizenship in the country is not required. Dignitas is a Swiss organization with medical staff that will even provide assisted suicide for persons with incurable mental illness. Mike hopes for Dignitas or a similar organization to assist with cryonics cases.
Steve Valentine discussed the Timeship project. I have heard him speak of this many times before, but this time I took a special note of his earthquake risk map. I noticed that Alcor and CI are in the second-safest seismic risk category. It may not mean anything, but Alcor is close to the highest seismic risk areas and CI is close to the lowest risk areas.
Bruce Waugh addressed the issue of how to invest for the next hundred years. He gave 2006 inflation-adjusted 205-year return on
$1 invested in 1801 as:
Stocks: $755,163
Bonds: $1,083
Treasuries: $301
Gold: $2
Cash: 6 cents
Bruce said that the historic risk premium on equities is 5%. From the return on treasuries he gave, I calculate a risk-free premium of 1.42%.
For the last ten years he gave the following returns:
Managed futures: 87%
Bonds: 68%
Real Estate: 55%
Bank interest: 34%
Commodities: 33%
World stocks: -6%
US stocks: -12%
Bruce is an independent futures systems trader whose trading falls into the managed futures category.
For the next hundred years nanotechnology, biotechnology and artificial intelligence could have significant impact, especially on equity and commodity values. Bruce suggested making investments into companies that will improve the chances of revival, such as those doing research into nanotechnology and cryobiology.
Political, financial, and social changes are very hard to predict. Bruce would allocate about a third of a 100 year portfolio into the broad stock market, with a switch to cash during downturns (defined as when the S&P 500 falls below its 200 day average). He would put portions of the rest into managed futures, art, commodities and real estate with nothing into bonds or treasuries.
http://www.cryonics.org/images/Asset4_Bruce.jpg
(Bruce Waugh giving his presentation.)
Peggy Hoyt is a Florida lawyer who is working with Rudi Hoffman to write a book about legal and financial issues of concern to cryonicists. She distributed a paper concerning cryonics advanced directives, although she has the unfortunate habit of using the word “cryogenic” for “cryonic”, which is one of my pet peeves. Which reminds me that she has her own law firm and has a special interest in writing trusts that provide for pets.
Of special interest to me was Peggy’s comment that no-contest (in terrorem) clauses in wills are completely unenforceable in Florida. Cryonicists often speak of writing provisions in their wills to disinherit any relative who interferes or tries to interfere with their cryonics arrangements, but apparently this is not possible in Florida. According to Wikipedia, however, such clauses are fully enforceable in California.
I cannot find any website that gives state-by-state information on which states allow such clauses and which ones do not, so a local attorney is advised for someone planning to include such provisions in a will.
Peggy showed me a recent book she has written entitled THANK EVERYBODY FOR EVERYTHING.
Looking at Amazon, it appears that she has written many books, mostly with co-authors.
John Dedon and Ralph Merkle spoke about the wealth preservation trust that they are developing for Alcor Members — the Alcor Model Trust. It is still under review whether the Alcor Model Trust is compatible with Alcor’s 501(c)3 status, although they don’t expect a problem.
Alcor will be given the responsibility for identifying the reanimated cryonicist as being the ultimate beneficiary of a trust. In exchange for a modest payment to Alcor ($500 to $1,000), Alcor will review the individual trust and will appoint Trust Advisors. The Trust Advisors, in turn, will appoint trustees. The Trust Advisors will be empowered to change trustees, if necessary.
Alcor would be the immediate beneficiary of the Alcor Model Trust, which might be 1% of the principle annually, or perhaps a share of the income. Distributions to Alcor from trusts will provide Alcor with financial incentives to be particularly diligent, and will also give Alcor legal standing to go to court if a trust is being mishandled. Of course, persons cryopreserved at Alcor would want to contribute to Alcor’s strength (ability to survive). Furthermore, research money donated to Alcor might hasten the day when the patient is revived. Insofar as Alcor is a charitable 501(c)3 organization, distributions to Alcor are tax deductable.
The Alcor Model Trust would be a revocable trust used in conjunction with a will. This trust is for cryonics revival only, and does not include the kind of tax planning that would be required for those having many millions of dollars in assets. The amount of future estate tax exemptions in the United States is currently highly uncertain. John Dedon advised those having a large taxable estate to get a life insurance policy in an irrevocable trust. The proceeds of a life insurance policy in an irrevocable trust can be outside of the taxable estate.
Ralph Merkle described the trust that he and his wife Carol are developing. Ralph says they are “guinea pigs” for the Alcor Model Trust. Trusts are legal instruments that separate the benefits of property (equitable title) from control of property (legal title), which means that the beneficiary cannot be the trustee, but the settlor can be the trustee. For a revocable trust, the settlor is trustee until the death of the settlor after which time a successor trustee becomes the trustee. Because of their long history of investing with Vanguard they have gotten Vanguard to agree to be successor trustee for their assets. The assets can only be stocks (including private stocks), not real estate or business assets. The trust is in Delaware, Vanguard is in Pennsylvania, and neither state has a rule against perpetuities. It may be that only the situs of the Trust matters, but Ralph feels better that neither state has a rule against perpetuities.
Overwhelmingly, in my opinion, the best presentation at this meeting of the Asset Preservation Group was the one on “Personal Revival Trusts” by Igor Levenberg. I have been working with the thorny problems associated with cryonics reanimation trusts for years and I have never seen such careful and persuasive legal analyses. And I have seem a fair bit of work by some very highly paid trust lawyers.
Igor Levenberg is not himself a cryonicist. He is a law student scheduled to get his J.D. in June 2010. He read THE FIRST IMMORTAL, became interested in the idea of cryonics revival trusts, and would like to work on such trusts as part of his legal practice. The presentation he made at the meeting was a summary of his paper that is being published in the Spring 2010 issue of the journal ST. JOHN’S LAW REVIEW. What follows is my summary of the ideas in Igor’s paper.
A central problem for cryonicists wanting revival trusts is that Cryopreserved Persons (CPs) are legally dead and are not ascertainable beneficiaries under trust law. My solution to this problem has been to have cryonics organizations (rather than the legal system) recognize the reanimated CP as the beneficiary. But finding the right cryonics organization to do this is not always easy.
The courts have recognized cryopreserved embryos as being “intermediate beings”. Igor raised the possibility of persuading courts to recognize CPs as also being “intermediate beings”, but he concedes that courts are unlikely to do this. Even if they did, an “intermediate being” cannot be a beneficiary without a court-appointed guardian.
Another option would be to have CPs treated in the same legal category as unborn, unconceived children. A potential parent could create trusts for his or her children, but if he or she never has children, the trusts become invalid. Such trusts are based on a contingency: the event of the settlor having children. A contingent beneficiary cannot be the sole beneficiary of a trust based on contingency. For example, the settlor could name his or her brother as the other beneficiary. The court would appoint a guardian of the unborn children to protect the interests of the contingent beneficiaries should the brother try to challenge the trust. If the settlor dies childless, the brother could challenge the trust on the grounds that the contingency is impossible.
Analogous to the unborn children, a cryonicist could create a trust that names his or her reanimated self as the contingent beneficiary. A cryonics service organization could be named as the other beneficiary, and another cryonics organization such as the Venturists could act as guardian. Igor told me later that if the trust document requested a specific guardian, a court would likely honor the request. An advantage over treating the CP as a contingent beneficiary rather than an “intermediate being” is that anyone challenging the trust would have to prove that the contingency is impossible — whereas the “intermediate being” trust is dependent upon proving that reanimation is possible. Proving that reanimation of a CP is impossible could be very difficult if expert witnesses could be called who attested to the possibility.
Both the “intermediate being” and the contingent beneficiary approach rely on establishing the CP as an ascertainable beneficiary. But trusts can be created that do not have this requirement. “Trusts for purposes” and trusts based on “conditions subsequent” do not require the CP as an ascertainable beneficiary.
A trust with a “condition subsequent” is a trust that has a beneficiary, but which specifies terms under which the trust is terminated. Those terms could provide for the interests of the reanimated CP. For example, a trust could be established which pays income to a cryonics organization as the beneficiary, and has the “condition subsequent” that the trust terminates and pays the principle to the CP settlor when and if the CP is revived. Such a trust would have to be in a state that has no rule against perpetuities.
“Trusts for purposes” include both charitable and non-charitable trusts. Such trusts have no beneficiary to enforce them. A non-charitable trust for the care of a pet relies on the trustee, and is therefore technically not a trust. Non-charitable trusts are subject to the rule against perpetuities even in states where the rule against perpetuities has been repealed. An exception to this, however, is a non-charitable trust for the care of graves, which are exempt from the law against perpetuities. Insofar as the Cryonics Institute is a licensed cemetery in the state of Michigan, a CI patient could conceivably establish a non-charitable trust to provide for liquid nitrogen, cryostat maintenance, and share of facility upkeep costs with the “condition subsequent” that upon reanimation of the CP the trust would terminate and the trust funds would be dispersed to the revived CP. A trust of this nature could not be for millions of dollars insofar as it is unreasonable to think that maintenance would be so expensive. Nonetheless, accounting for inflation and for maintenance for hundreds of years (or in perpetuity) could allow for a sizable trust.
Charitable trusts are enforced by the Attorney General of the state in which they are established (rather than by a beneficiary), and are never subject to the rule against perpetuities, even in states that do not otherwise allow for perpetuities. For example, a charitable trust could be established which uses income from the trust to finance cryonics research (or cancer research) to which is added the “condition subsequent” that the trust will terminate and the principle go to the revived CP when and if the CP is revived. Although such “piggybacking” of a non-charitable purpose onto a charitable trust is generally not allowed, Igor believes it would survive judicial scrutiny because a challenge could not be brought to court until the condition subsequent arose. The world would be a very different place when that happened.
I gave a demonstration of Nick Pavlica’s RescuTel bed alarm system. I badly wanted the demonstration to go perfectly, but it did not. I needed to connect to a telephone jack, but the connection in the meeting room was being used for those attending by teleconference. There was another jack in Ken’s office, but my 100 foot extension cord would not reach. By the time I got a female-female adapter to have a line that was long enough, I did not have time for adequate testing. At least the EMFIT bed pad worked well — setting off the alarm on the pad’s console when I removed myself to stimulate the stopping of my heart.
After the meeting there was a boat cruise off the Gloucester coast that gave participants a chance to see whales and other sea life. I missed the boat cruise because I had to catch a plane to an astrobiology conference in Texas where I was making a presentation:
http://www.lpi.usra.edu/meetings/abscicon2010/pdf/program.pdf
http://www.lpi.usra.edu/meetings/abscicon2010/pdf/sess303.pdf