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. 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, as well as build capital to eventually fund revival and reintegration. 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 (see Schedule A for amounts). 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.
A trust is a legal device by which property is held by one person (the trustee) for the benefit of another (the beneficiary). The person who sets up the trust is called the settlor. The property that is held in trust is known as the corpus or trust fund.
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 December 31, 2013, the Alcor Patient Care Trust Fund had total assets of $9,464,543 dollars, invested as follows:
The balance for the Patient Care Trust Morgan Stanley Investment Account will be posted here monthly. The Investment Account had a total annual return of 17.01% for 2009, 6.18% for 2010, 1.66% for 2011, 10.66% for 2012, and 15.6% for 2013.
Aug 31, 2014
|Cash and Equivalents||$1,506,282.39||17.19%|
|Stocks / ETFs||$5,159,362.10||58.88%|
|Certificates of Deposit||$2,077,375.38||23.71%|
December 31, 2013
|Cash and Equivalents||$511,702.90||6.20%|
|Stocks / ETFs||$4,422,269.95||53.56%|
|Certificates of Deposit||$3,302,497.42||40.00%|
December 31, 2012
|Cash and Equivalents||$486,980.26||6.99%|
|Stocks / ETFs||$3,204,837.30||45.99%|
|Certificates of Deposit||$3,256,691.47||46.73%|
December 31, 2011
|Cash and Equivalents||$14,589.47||.24%|
|Stocks / ETFs||$2,186,516.95||35.88%|
|Certificates of Deposit||$3,835,742.91||62.93%|
December 31, 2010
|Cash and Equivalents||$195,299.93||3.52%|
|Stocks / ETFs||$1,934,387.13||34.83%|
|Certificates of Deposit||$3,311,576.56||59.64%|
January 31, 2009
|Cash and Equivalents||$208,926.86||15.19%|
|Stocks / ETFs||$220,728.20||16.05%|
|Corporate Fixed Income||$191,994.99||13.96%|
|Certificates of Deposit||$575,314.30||41.82%|
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 [Gary served 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 cryopreservation. 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.
Current members of the Alcor Patient Care Trust Board are:
Robert A. Schwarz, Chairman (term expires May 2015). Bob and his spouse Margaret became Alcor members in October 1986. Not long after, Bob and Steve Bridge traveled from Indianapolis to California to attend an Alcor cryopreservation training session. Bob has been to several subsequent training sessions since, in order to keep at least a minimum of expertise for standby support locally in Indianapolis. In 1988 Bob's mother's health took a serious decline. Bob and Steve were able to assist her in completing her Alcor paperwork just in time, and she is now a cryopreservation patient at Alcor. Bob and Steve assisted with her standby and preparation of wash out and cool down which was conducted in Indianapolis before she was transported to Alcor in California to complete her cryopreservation. When the Patient Care Trust was formed in 1997, Steve Bridge, who was at that time President of Alcor, asked Bob to be on the newly formed Trust Board. Bob has been on the Patient Care Trust Board since May 1997 and has served as Chairman since May of 2008. Bob studied electrical engineering at Purdue University, after which he worked for several years as a laboratory technician in a super-conducting laboratory. For most of his working career he worked for the State of Indiana as an HVAC mechanic, retiring in 2006. His main interests are self-studies in nanotechnology, brain research, and stem cell research. He was in the past a marathon runner and although he no longer runs, daily exercise is an important part of his routine.
David Brandt-Erichsen, Secretary (term expires May 2018). David has been signed up with Alcor since 1987 and has been a long-time volunteer for Alcor in various roles, in the past as Sign-Up Coordinator and more recently as a major contributor to creating the new Alcor website, spending many hundreds of hours formatting all of the available material for the web. David's background is as a research technician in molecular genetics. Now retired, he devotes much of his spare time to volunteer work for non-profit websites. Besides his work with the Alcor Website Working Group, he is webmaster for the Natural Arch and Bridge Society, for Compassion & Choices Arizona (which is trying to establish legislation in Arizona for the right to assistance in dying such as currently exists in Oregon, Washington, and Vermont), and for the Elverhøj Museum in Solvang, California (which was formerly the family home he grew up in). In addition, he has almost single-handedly created the world's largest internet source of information about space settlement and space solar power for the website of the National Space Society. David is also an avid hiker and has been a volunteer guide for numerous trips into the canyon country of southern Utah.
Michael Riskin, Ph.D., CPA, Treasurer (term expires May 2019). Michael has been an Alcor member since the mid 1980's and a board member since 1993. Michael has served Alcor in various capacities over the years including that of Membership Ombudsman, Vice President, and Chairman of the Board. He is currently the Alcor Board representative to the Alcor Patient Care Trust Board. Michael's wife, Anita Banker Riskin, also an Alcor member since the 80s, suffered legal death in early 2006 and is now in long term bio-stasis in Scottsdale. He is both a California State Licensed Psychotherapist and Certified Public Accountant, with a private psychology practice in Santa Ana, California. The other half of his professional life is that of a business consultant to startups and more mature companies facing a variety of organizational and marketing challenges. Michael believes that being alive, healthy, and happy is a good thing. He intends to enjoy as much of that trinity as long as is possible.
David A. Kekich (term expires May 2017). Mr. Kekich founded the country's largest life insurance master general agency (which raised $3.1 billion of premium income for First Executive Corp.), co-founded a major financial services company, and has arranged venture capital funding for private companies for 11 years. He is a recognized expert on private investing and authored the venture capital handbook How the Rich Get Richer with Quiet Private Investments. Mr. Kekich founded both public and private companies, was engaged as a consultant and served as director to numerous private and public corporations. He also sold and developed real estate. In 1999, Mr. Kekich founded the Maximum Life Foundation, a 501(c)(3) corporation dedicated to reversing human aging and aging related diseases. In 2006 he co-founded Stem Cell Products, LLC, and in 2008 he published the longevity book, Life Extension Express. He also serves as a Board Member of the American Aging Association. His father is in cryopreservation at Alcor, and his mother resides at Cryonics Institute.
Michael F. Korns (term expires May 2016). Mr. Korns has engaged in advanced computer science research in the areas of pattern recognition, natural language processing, high performance compilers, analytic database engines, machine learning, and computational finance. Mr. Korns has held numerous positions in industry including: research staff member at IBM; Chief Scientist Tymshare Transaction Services; Chief Scientist Xerox Imaging; Chief Scientist Objective Software; and Chief Scientist Investment Science. Mr. Korns has authored numerous publications, and his research interests are currently focused in the areas of: analytic database tool development, machine learning including symbolic regression, and computational finance. His website is www.korns.com. He and his wife have been Alcor members since 1986.