X-Message-Number: 9861
Date: Sat, 6 Jun 1998 06:08:43 -0400 (EDT)
From: Ben Best <>
Subject: Trusts in CANADIAN CRYONICS NEWS
On Fri, 5 Jun 1998, Ettinger wrote:
> Some things remain unclear to me. For example, Ben seems to indicate that,
> after CryoCare failed to get 501 ( c )3 status (tax exempt as scientific,
> educational, or charitable), it tried to get 501 ( c) 13 (cemetery) status and
> failed in that also.
Actually, CryoCare never attempted to get 501(c)3 status and, as I
stated in CANADIAN CRYONICS NEWS, such status was regarded as undesirable
in part because we felt that 501(c)3 status could not be justified. You
seemed to accept the validity of this interpretation after the Cryonics
Institute failed to get 501(c)3 status. Alcor seems to encompass the
functions of both the Cryonics Institute and the Immortalist Society by
virtue of its educational efforts. Whether or not 501(c)3 status can
really be justified for a cryonics organization, Steve Bridge assured me
that such status, once given is rarely removed. People at CryoCare simply
felt that 501(c)13 status made more sense and was more readily defensible,
so 501(c)13 status was sought rather than 501(c)3.
> He says, "But after a long court battle, the IRS ruled
> that neither CryoCare Foundation nor the Independent Patient Care Fund (IPCF),
> could have cemetery status, because they are in the reanimation business."
>
> If there was a court battle, then the court ruled, not the IRS.
I'm not sure that "court battle" is the right term, but a number of
hearings were held and lawyers were involved in preparing and pleading the
case. In the end the ruling against 501(c)13 status was made by an
individual IRS bureaucrat. It seemed almost like an impulsively
conservative decision, made with some impromptu rationalizations. This is
in the nature of the power of bureaucrats.
> In any case,
> Ben goes on to say that "CryoCare/IPCF is now facing the necessity of
> individual trusts for its members." He discusses some problems, including the
> fact that an individual trust in Liechtenstein would have a minimum (annual?)
> fee of $4,500, plus a tax of $750. Pooled trusts could pay only one minimum
> fee, but Ben's comments seem to indicate that IPCF cannot pool the trusts
> because of the IRS ruling.
The IRS ruling has no bearing on Liechtenstein trusts. It is the
Liechtenstein government which will not allow pooling of trusts for tax
purposes, even though the trust company we contacted would allow such
pooling. The $750 is normally included in the $4,500 minimum, but this
could not be done for pooled trusts. I did not make this as clear as I
could have in my summary, so I apologize for any confusion I may have
created.
> Of course, I am already somewhat biased against trusts for funding (except
> the revocable living trust that CI lawyers have drawn for those who want to
> use certain types of assets without losing control); but it appears to me that
> the continuing trust route is not a simple "sign here" proposition with an
> assured outcome, but just another complex set of options with their own
> special possible advantages and possible drawbacks.
I'll have to agree to this. The legal system was not designed with
cryonics in mind. Technical innovation often forces legal modifications,
but cryonics does not have anywhere near the clout of computer technology,
so our risks are greater. Somebody had to take the initiative to perfuse
humans and store them in liquid nitrogen. Seeking bureaucratic approval
before taking any innovative action is often a recipie for failure.
Bureaucrats will be very negative about matters for which there is no
precedent. (This may have been what happened in France.) These may be
matters of life & death, so we cannot afford to avoid taking chances.
--------------------------------------------
Ben Best ()
http://www.benbest.com/
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