X-Message-Number: 9860 Date: Sat, 6 Jun 1998 02:01:34 -0800 From: American Cryonics Society <> Subject: Re: Individual Trusts On "Individual Trusts" I wrote: >> Motivation >> >> A lot of us "true believers" are intent on leaving the bulk of our >>assets to benefit cryonics. Other people want other charities, >>relatives, or friends, to get the bulk of their estates, and only provide >>minimum funding for cryonics. It may be that people will be more >>motivated to provide adequate funding if there is the possibility of them >>benefiting more directly from their money and not simply contributing >>more to the "community chest." In Message #9849 John de Rivas responds: >Also it could help divert funds otherwise left to relations to cryonics if >provision could be made for relatives to receive some income from the >funds whilst the relatives are still alive, but the principal remains with >the cryonics organization. Such an arrangement is not uncommon where a >husband leaves his assets to his wife in trust for his children, the >widow getting only the income. This prevents his widow from re-marrying >and leaving the assets she had inherited from her first husband to >someone else's children. My response: The same thing can be accomplished informally by family members agreeing that at the death of the second spouse, all family assets (minus certain specified gifts to children, etc.) will go into a family cryonics trust which will be used to benefit all family members in suspension. This trust could even be added to at the death, and suspension, of any children who choose cryonics. This informal arrangement doesn't prevent a spouse from changing his or her mind, or (with remarriage) the new spouse getting it all by intestate inheritance. The advantage is that the principal sum can be more readily accessed for emergencies. A lot of people want to allow assets to be used by surviving family members for real emergencies (medical emergencies for example), but don't want frivolous use. Yet a third way to achieve the objectives John discusses is through a death benefit insurance policy option. This option (available on most US policies) allow for the yearly interest earned by the policy (capital) to go to the surviving spouse (or other named beneficiary). The principal sum death benefit is not paid until some given time in the future (typically twenty years after the death of the insured), or upon the occurrence of a given event (the spouse's death, for example). The ultimate beneficiary which receives the principal sum, can be a cryonics society, or a trust administered by a cryonics society. For what it is worth, what happens with this option is that the proceeds from the life insurance policy are used to purchase an annuity with the insurance company handling both sides of the transaction! The insurance companies like this option, since they get to keep money longer. The earnings are usually not very exciting: 4-6% is typical. However, there is also not the bite by attorneys and other adminisrators which John warned us about. This means that for fairly small sums (say $300k or less) such administration by the insurance company is an OK deal. For larger amounts, setting up a formal trust and paying the lawyers and other fund administrators (while earning higher return on investment) is the preferred strategy. Long life, Jim Yount =+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+American Cryonics Society (650)254-2001 FAX (650)967-4444 P.O. Box 1509 Cupertino, CA 95015 =+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+ Rate This Message: http://www.cryonet.org/cgi-bin/rate.cgi?msg=9860