X-Message-Number: 11028
Date: Mon, 4 Jan 1999 13:35:42 -0500
From: "Stephen W. Bridge" <>
Subject: More on Escrow Accounts

To CryoNet
From Steve Bridge
Chairman of the Board
Alcor Life Extension Foundation
January 4, 1999
In reply to   Message #11014
              From:   (Rick Pierce)
              Date: Sat, 2 Jan 1999 10:40:19 EST
              Subject: Re: CryoNet #11005 - #11010
>To Steve Bridge:
>I am not an accountant or a lawyer, nor do I know anything about
>estate planning and I do not mean to drag out this discussion of
>escrow accounts however, I am a Real Estate Developer and we do this
>all the time and there is not any work to speak of.  I have clients
>that will enter into a deal and leave a deposit with the Brokerage
>Agency which they put in an escrow account.  This is not income to
>the Brokers and they release it upon request.  For the Brokers it is
>a non-event.  The only work required is to make a record of the
>deposit.  I have monies that have been sitting in there for years
>that I have just never bothered to collect, at least not yet.
Rick, I am also not an accountant or lawyer, merely experienced at
working with those who are, while running Alcor for four years.  Now
that I see your more detailed explanation, I realize that an important
consideration is missing -- have you ever held "escrow" accounts for
people who are *legally dead*?  Escrow accounts are typically for a
specific, temporary purpose such as paying taxes on a house and not
designed as saving accounts or trusts.
In any circumstance I am familiar with, if an individual died with
money in an escrow account for his house payments, that account would
become part of the *estate* of the deceased (or rolled over to
ownership of the wife, if the house was in both names).  At that
point, the escrow account would no longer be under any control of
yours (although possibly under your temporary "management"), but would
eventually become the property of his heirs.  Clearly this would not
work for a reanimation account.
In fact, Alcor *does*, in a sense, have something like escrow accounts
for a few members.  When a member wishes to pay cash for his
cryopreservation in advance of death (a small number of people do
this), Alcor does not spend that money.  We place it into an FDIC-
insured account at a bank and do not touch it until that person's
deanimation.  Until that time, the funds do not belong to Alcor.  We
treat that account as a "conditional donation."  If the condition of
legal death occurs, then this money becomes the property of Alcor as a
donation.  If the individual changes his mind about Alcor or about
cryonics, then he regains custody of the funds.
This is not a HUGE amount of work, it is true, although setting up an
account for each person requires several hours of someone's time (not
a small consideration for a full-time staff of only seven -- only two
of which are involved in banking affairs).  And since these accounts
are usually in CDs of various lengths, Alcor's bookkeeper has to keep
track of them and Alcor's President has to decide with each rollover
how long a certificate to purchase.  But these accounts do not
continue after a person's legal death.  And that, I understood, was
what you were looking for: something that the cryonics company could
hold until the individual's revival, then return it to him.  Trying to
fight relatives and probate courts over the ownership of escrow
accounts ("But he's coming back for this money, your Honor!  Really!")
sounds like a LOT of work to me.
As I understand it, to hold onto funds after legal death, would
require something more like a TRUST.
>So it occurred to me, why couldn't this work for Alcor, an
>organization with an obvious interest in making this work.  If not
>Alcor, a separate entity created for this purpose overseen by Alcor.
>Alcor (or whoever) could even be paid for this service and still be
>non-profit.  Trusting that our money will still be there in 500 years
>is difficult enough, but if we have to trust someone, who can we
>trust more than Alcor?
There may well be something here, Rick; but finding out will be
expensive.  Alcor will have to consult attorneys and accountants, who
will have to research the matter to see if it is possible, and if so
what would have to be done to protect Alcor's tax-exempt status.  The
answer may turn out to be, "No, it has to be a Trust" -- which we
already thought.  If the answer turns out to be, "Yes, there is a
simple way to make this work" -- then we have to draw up standardized
legal paperwork.
Since we already have some systems in place, via trusts, to hold funds
for the future, Alcor is unlikely to spend $2-3K (minimum) to research
escrow funds.  Fred Chamberlain, Alcor's President, has many other
things to do.  However, Rick, you still might be able to influence the
development of this.  This could be your contribution to cryonics.
1.  *Sign up for cryopreservation with a cryonics company*, if you
have not done so already.  No one will fund legal research to benefit
someone who might not join.  It is always better to get the basic
cryonics protection in place first, then to do what you can to make it
better.  If you plan to wait for cryonics or for some cryonics company
to be perfect before you join, then you might as well purchase that
charming corner lot at the cemetery now.
2.  *Tell your cryonics company that you will pay for the research
into the escrow question*.  If your idea is right, you benefit.  The
cryonics company also benefit since they will be able to offer a new
option that may persuade a handful of new people to join them, so the
cryonics company should then be willing to pay for the actual
development of the paperwork.  If escrow cannot work or if it can only
work when combined with a Trust, then the cryonics company has not
compromised other funding needs to find this out.
In reply to:    Message #11018
                From: Thomas Donaldson <>
                Subject: Escrow accounts and the expense of cryonics
                Date: Sun, 3 Jan 1999 22:12:08 +1100 (EST)
>As I understand it, Alcor makes a promise that it will provide you
>with whatever is left after it has suspended you, kept you in
>suspension, and revived you... if you provide more than the minimum
>amount. I would not be surprised if other cryonics societies make a
>similar promise. Because of the problems above, there is no way in
>which such promises can be given any LEGAL FORCE by a cryonics
>society domiciled in a country or state which appropriates money as
>described above.
Sorry, Thomas, that is not correct.  Alcor specifically does NOT make
such a promise, even for funds over the minimum amount.  To make such
a promise would be illegal and probably fraudulent under today's laws.
Suspension funds are a donation to Alcor and cannot be returned.  What
we HAVE discussed is the possibility that:
1) IF the laws change in the future, and
2) IF there are funds left over, and
3) IF some future Alcor Board of Directors is persuaded that this is a
reasonable and legal thing to do,
Then it is POSSIBLE that some of those funds might then be returnable.
However, the default is that the funds are *unreturnable* donations
and the default might well stay that way forever.
Alcor also created something many years ago called a "Suspension
Research Endowment", which, if chosen by the individual member, may
hold some of the funds over the suspension minimums.  This *may* work
to give additional suspension protection to that individual (as
opposed to the pooled group of patients and funds) in case of
financial disaster or the need to pay for another company to provide
care.  Even the legality or practicality of that is unknown and
untested.  Future laws may treat these accounts differently from
minimum suspension funding; however, I do not believe the SRE would be
any more "refundable at reanimation" than any other part of the
suspension funding.  Personally, I have never encouraged SRE's and
consider a Trust to be much safer.
Steve Bridge

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