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Is Estate planning for cryonics a cool idea or hot mess?

 

Thursday, 29 November 2018

KHQ Lawyers' Kimi Shah, Senior Associate in Wills & Estates, and Lawyer Darrell Choong discuss how estate planning could apply to the "life extension" technique of Cryonics in Australia.

2018.11.20 Khq Lawyers Cryogenics Co -author Kimi Shah HI RES

Last year, it was announced that a cryonics facility was going to be opened in Holbrook, New South Wales which makes Australia the third country in the world to allow its citizens to be cryogenically frozen. As technology progresses, and the idea of immortality becomes a reality, how does life extension affect your estate planning?

1.      Summary

Cryonics presents certain challenges to the status quo, especially when it comes to estate planning. When you are cryogenically preserved, your heartbeat is stopped. For the purposes of the laws of Victoria, a person has legally died when either of the following has occurred:

Khq Lawyers Darrell -Choong

(a)             irreversiblecessation of circulation of blood in the body of the person; or

(b)             irreversible cessation of all function of the brain of the person.[1]

Hence, when you cryogenically freeze someone, that person is not technically dead even though their death may satisfy the medical definition of death. Further, for the administration of deceased estates, a cryogenically preserved person would be deemed “deceased” for the purposes of the Wills Act 1997 (Vic) and the Administration and Probate Act 1958 (Vic). 

2.      What is cryogenic freezing and what does it entail?

Cryonics is the process of freezing a body at the moment of death with the hope that it will be brought back to life at some future time.[2] It is the preservation of the human body at cryogenic temperatures with the expectation that future medical technology may be able to repair the accumulated damage of ageing or disease at the molecular level, and restore the patient to health. The revival (also known as re-animation) of the corpse may occur hundreds of years from preservation date. Re-animation of a body depends on future medical science, the advancement of technology and the ability of future technology to revive a preserved body.

3.      Difficulties with estate planning

The fundamental thought behind cryonics is that an individual’s body can be preserved to await future medical treatment, regardless of the time it takes for medical science to advance to that stage.

It is unclear what the reanimated person’s legal status would be, given that they were previously legally dead. If all the assets of the person’s estate have been distributed to their beneficiaries, the reanimated person would in effect, be penniless. Would the reanimated individual be entitled to claim some form of financial provision for himself or herself from his family?

The above situation would require the cryogenically frozen testator to make provision for their “future” self if they are re-animated. This accordingly would involve the creation of some form of cryonic trust or a testamentary trust. Yet, the near impossibility of ascertaining the re-animation date of the cryogenically frozen testator presents further challenges in the creation of these trusts.

Trust deeds usually have a vesting date. When a trust has vested, the beneficiaries become absolutely entitled to the property of the trust. In most States in Australia, the vesting date is 80 years from the commencement date of the trust.[3] This is known as the perpetuity period.  Therefore, the perpetuity period in these States prevents the assets held by a trust from being held for more than 80 years.  

South Australia is the only State to have abolished the rule against perpetuities, which means that a South Australian trust can exist indefinitely. However, a South Australian trust would raise concerns as well:

  • Who would act as trustee of the trust?
  • Would you appoint an individual or a corporation?
  • Who oversees their decisions?
  • Is the testator the sole beneficiary? Or should you have a class of general beneficiaries?
  • Does this give them rights to challenge the trust on the notion that you have died?
  • What if your re-animation is not successful?
  • Who will benefit then if your re-animation is not successful?

Further, there still exists uncertainty around the right to re-animate the testator:

  • Can the testator, before being preserved, sign a document which authorises their revival when medical advancements have been made?
  • Who weighs up the risk of revival?
  • Assuming the testator had appointed a medical treatment decision-maker, is that person’s appointment still valid when the testator is cryogenically frozen?
    • If yes, can the decision maker validly pass their power on to another person upon their own death?

4.      What would you need to consider?

As it is uncertain if and when a cryogenically frozen person would be re-animated, special advice should be sought for asset protection.

Cryogenic preservation may seem like it is science fiction, however, it is getting closer to reality. This area of science creates very interesting concepts and opportunities for estate planning and trust advice. If you have any queries about this article, please contact the authors.

  

Kimi Shah is a Senior Associate in the KHQ Wills & Estates Team and a member of the of the Society of Trust and Estates Practitioners. She has invaluable experience in all aspects of succession law including estate planning, wills and powers of attorney, trust reviews, administering deceased estates and estate litigation. Her broad experience allows her to advise clients on ways to minimise risk and plan for the future. Kimi’s client base ranges from families and small managed entities to high net wealth individuals and she approaches each matter in a holistic manner to provide simple, easy to understand solutions. Kimi is currently undertaking her Masters in Applied Law (Wills & Estates). Her passion for succession law is evident to her clients and colleagues alike. Contact Kimi at kshah@khq.com.au or connect via LinkedIn.

Darrell Choong commenced as a graduate lawyer in 2018, having completed a Bachelor of Laws at the University of Tasmania. Prior to this, Darrell worked as an intern clerk at Bespoke Law and at Osborne Clarke in Singapore. He also volunteered at a number of legal not-for-profit organisations such as the Student Legal Service in Hobart, and was an editorial board member for the University of Tasmania Law Review. Darrell is currently rotating through KHQ’s practice areas, and is excited to learn as much as possible during his rotations. Contact Darrell at dchoong@khq.com.au or connect via LinkedIn.

 


[1] Section 41 Human Tissue Act 1982.

[2] Oxford English Dictionary

[3] Section 5 of the Perpetuities and Accumulations Act 1968 (Vic).

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