X-Message-Number: 9869
Date: Sun, 07 Jun 1998 12:26:26 +0100
From:  (John de Rivaz)
Subject: Re: Individual Trusts

Jim Yount mentions the use of insurance products for estates under $300k. 
These products use a mass produced trust document to work. If produced for 
clients individually the cost of the single sheet of paper used by the 
insurance companies would be an appreciable fraction of the $300K or 
probably the whole amount of much smaller sums that may be available to many 
cryonicsts.

Of course what the insurance companies do offer is security in numbers. If 
the millions of clients of a major insurance company were ripped off, then 
the government would have to do something in order to keep public order. If 
on the other hand the clients of a small organisation, such as a cryonics 
trust manager, lost their funds no one would lift a finger. However honest 
the managers, client "investors" "policyholders" or whatever you like to 
call them can still be ripped off as a result of litigation, financial 
manoevers such as takeovers and mergers and so on totally outside the 
control of management.

An annuity is quite amazing in my view. It pays less than (or in the event 
of a highly impaired life) about the same that you can get from agressive 
equity investment if you are willing to sell some of the gains rather than 
rely on dividend income. Yet all the capital goes to the insurance company 
when the annuitant dies. (What I am saying is that if you have a successful 
investment strategy you may as well keep on with that as buy an annuity.)

If it were possible for one individual or one organisation other than an 
insurance company to issue an annuity to another individual this would solve 
the problem of death taxes as well as probate. Unfortunately, as far as I 
can understand, the lawyers have got it wrapped up so this can't be done. 
(The British courts, so I have been told on numberous occasions, "set aside" 
such arrangements in favour of probate lawyers and administrators and death 
tax collectors - their word for denying their citizens freedom to this 
particular form of contract.) 

Also anyone considering a private annuity still has to consider the safety 
aspect mentioned above. The problem with all of this is that people are 
being asked to "put all their eggs in one basket". Normally financial 
security is acheived by diversity, of classes of investment, managers (if 
any), and individual units with classes (eg different stocks).

-- 
Sincerely,     * Longevity Report:  http://www.longevb.demon.co.uk/lr.htm
John de Rivaz  * Fractal Report:    http://www.longevb.demon.co.uk/fr.htm
**************** Homepage:http://ourworld.compuserve.com/homepages/JohndeR
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