Click here to read the entire Trust document

The Alcor Patient Care Trust

In the early days of cryonics, patient storage was paid for by periodic payments from still-living relatives. This system simply did not work, and resulted in the loss of a number of patients – but never at Alcor.

At Alcor, patient storage costs are paid from the Patient Care Trust Fund. This conservative funding arrangement is designed to cover the cost of patient storage solely from the income from the Trust, thereby assuring that such funding will continue indefinitely into the future. The irrevocable Patient Care Trust is included under Alcor's tax-exempt status, but nevertheless is a separate legal entity that provides liability protection for these assets. This arrangement is one of the reasons our members have confidence in Alcor.

It doesn't do any good to use the most advanced techniques to get our members into cryopreservation unless we can keep them there. Ongoing care for cryopreservation patients is the number one element of our purpose in being cryonicists, and financial protection for the patients is a critical component of this. There is no use in starting this possibly centuries-long project, if we don't do centuries-long financial planning. Providing this kind of protection through a conservative, long-term view of storage costs is one of the main reasons why cryopreservation costs so much.

When an Alcor member is cryopreserved, a significant portion of the member's funding is placed into the Patient Care Trust – $65,000 for each whole-body patient and $25,000 for each neuropatient. The investment income from this money is then used for the ongoing storage costs. Alcor accepts only secure funding arrangements where the entire funding amount is available within a few days after the legal death of the patient. Most people arrange this through a simple life insurance policy, with Alcor as the beneficiary, although other arrangements are possible.

Because of our non-profit 510(c)(3) charitable status, Alcor does not keep separate funding accounts by patient. All patient care funding is grouped together in the Patient Care Trust so that all patients are treated equally (with the exception of the inherent differences between whole-body patients and neuro patients).

Creating the Alcor Patient Care Trust

The Patient Care Fund (before it was a separate Trust) was originally part of Alcor's regular internal fund accounting system. By late 1991, this fund approached one million dollars and was by far the largest segment of Alcor's assets. The Alcor Board realized that a better way was needed to protect this money. For one thing, it was a possible "deep pocket" in any potential lawsuit against any part of Alcor's operation. For another thing, there was the potential temptation to raid the fund for other purposes during tight financial times. So the idea was born to create a legally separate Trust to shield the fund from either of these possibilities.

Creating the Trust turned out to be much easier said than done, and the process ended up taking almost eight years. The unique business Alcor was in necessitated the breaking of new legal ground in creating this Trust. For one thing, although the patients are supposed to be the true beneficiaries of the Trust, the patients have no legal existence and hence could not be the beneficiaries (instead, Alcor was made the beneficiary).

Over a period of nearly four years, Alcor consulted with several expert trust attorneys who did nothing more than educate Alcor on the difficulty of creating this Trust. Finally, in 1995, Alcor found an Arizona trust attorney, Larry Stevens, who was willing to take on the task. "Yes, this can be done" he said, "but it will require some unique legal thought." Alcor needed to write much of the Trust itself because only Alcor could understand what it wanted to accomplish, and there was a lot of internal debate on exactly how to do that. Within the next three years, the final draft of the Trust was written by attorney Larry Stevens and former Alcor President Steve Bridge, with input from Alcor Board members, various attorneys, and other thoughtful reviewers.

In May, 1997, the original Trust document was approved unanimously by the Alcor Board of Directors and the five original Trustees. The final amendments made in 1999 were also approved unanimously by both the Alcor Directors and the Trustees.

The Trust Document

You can read the entire Alcor Patient Care Trust document in the Library section of the website. Below are a few highlights of how the Trust operates in practice.

• As of May 1999, the Trust is irrevocable. This means that the Alcor Board cannot ever cancel the Trust until the purposes of the Trust are fulfilled. Since the purposes of the Trust can be summarized as "keep all the patients in cryopreservation until they can all be repaired and revived," this Trust is going to be in existence for a long time.
  
  
• The Trust Board consists of five persons, all of whom must be cryopreservation members of Alcor. One and only one Trustee must be a member of Alcor's Board of Directors. Three of the Trustees must have a relative or significant other currently in cryopreservation.
  
  
• The members of the Trust Board are appointed by the Alcor Board of Directors. They have five year terms, staggered so that one term expires each year. If a suitable person who has a relative in cryopreservation cannot be found, a Temporary Trustee with a term of up to one year can be appointed who is not a relative (so far this has not occurred).
  
  
• No Trust Board member may be an employee or officer of Alcor, or receive any compensation from Alcor or the Trust other than expenses incurred by carrying out duties involved in managing the Trust.
  
  
• If the income from the Trust in any given year exceeds by 30% the actual patient care expenses for that year, the additional income above that 30% can be placed in a separate account to fund research in procedures to revive the patients. If the repair and revival of patients ever becomes feasible, the Trust may expend whatever amount is necessary to accomplish this, provided it is done in such a manner as not to jeopardize the care of any patients remaining in biostasis.
  
  
• Each month, Alcor bills the Patient Care Trust for Alcor's expenses related to patient care. The specific costs related to patient care are itemized according to a formula mutually agreed upon by Alcor and the Patient Care Trust. According to the current formula, the Trust pays for all direct liquid nitrogen costs plus an allocated percentage of staff cost applied to general overhead (currently set at 9.4%). In addition, the Trust pays for direct capital expenditures related to patient care, such as dewars and construction work on the Patient Care Bay.

Trust Assets

As of January 31, 2008, the Alcor Patient Care Trust Fund has assets of 3.2 million dollars, invested as follows:

• The Patient Care Trust owns well over 50% of the shares in Cryonics Properties, LLC, the limited liability company that owns the Alcor building (all other shares are owned by Alcor members). The Trust also owns the mortgage on the building. Alcor pays rent to Cryonics Properties, LLC. Since Alcor does not occupy the entire building, there are additional tenants who also pay rent.
  
  
• The remaining Trust assets (about $1.7 million) are invested in a diversified portfolio professionally managed by the investment firm of Morgan Stanley.

A testimonial by attorney Gary Meade

As an attorney as well as an Alcor member and someone who has a loved one in cryopreservation, I am pleased to give my wholehearted professional and personal endorsement of the Alcor Patient Care Trust. I believe the Trust will provide the best means of legally protecting the patient care fund assets, thereby helping to ensure the long-term care of the patients in cryopreservation. That is the reason I enthusiastically agreed to serve as a Trustee and Chairperson of the Trust [from 1997 to 2002].

Conceptually, the Trust is an excellent idea. The assets in the patient care fund have been placed in trust, to be held by the Patient Care Trust as a separate legal entity. This will provide the maximum legal protection for these assets, both against claims by others as well as possible misuse for purposes other than patient care. The Trust Agreement requires the Trustees to act in accordance with the Trust's legal purpose, which is "providing care" for the patients in cryopreservationMtr1daat. The Alcor Life Extension Foundation is the legal beneficiary of the Trust, and as such has the absolute legal right to enforce the Trust Agreement and ensure that the Trustees act in such a manner.

The Trust itself is well-planned and skillfully crafted. This is the first trust ever established to care for those who are legally dead and who therefore have no rights under the law. This presented some novel legal challenges. The drafters of the Trust overcame these and I believe the completed Trust successfully accomplishes everything it was intended to do.

Everyone with an interest in cryonics owes a tremendous debt of gratitude to those who worked so hard to set up the Trust, including the outside trust counsel, the Alcor Board, and especially Steve Bridge. Of course, those having the greatest such debt are the patients themselves. It may be presumptuous of me to do so, but I would like to extend on their behalf a most sincere "Thank you" to all for a job very well done.

Click here to read the entire Trust document