From: John Grigg (email@example.com)
Date: Mon Jan 07 2002 - 05:40:14 MST
This is a great post by Mike Darwin on the harrowing situation people interested in cryonics can find themselves when very dependant on government aid.
Date: Sun, 6 Jan 2002 22:49:05 EST
Subject: Spend Down
Driven from the Pack asks:
> Does anyone have any comments on the possible impact
> of life insurance policies as noted above?
> How about in the case where the cryo org (e.g., Alcor)
> "owns" the policy, but the cryonicist makes the
The problem Jan Cotzee describes is very real and it does apply to the
elderly. In fact, $2,000 in assets are allowed to be retained by Medicare,
but no more. You must spend down to this level of assets before government
financial assistance will kick in.
If you intend to transfer assets to avoid spend down this must have been done
TWO YEARS prior to the start of the illness that causes government assistance
to become necessary. Otherwise, as Jan points out, ALL assets can and likely
will be seized, including insurance money. Further, persons receiving assets
to avoid spend down may have their own assets seized or wages garnished.
If Alcor or your cryonics society owns your policy *and there is no buy back
agreement* then you can escape asset seizure and spendown if the transfer was
made 2 years before the illness... If you have executed a buyback agreement
then the insurance is fair game for the government. If any attorney tells you
otherwise, they are mistaken. I discussed this issue with HHS and California
DHS officials repeatedly. A buy-back agreement is a tactic that has been used
for insurance and other assets in similar contexts (including prepaid funeral
arrangements) and has been found to violate the law. The assets will be
confiscated if they are discovered. This might even happen after
cryopreservation has occurred for several years. It happens routinely to
families who have made such transfers and the Feds or State officials find
out within the status of limitations (which is, I believe, 5 years, possibly
The IRS can seize any assets at any time for taxes owed, including insurance,
even after the death benefit has been paid. They are quite ruthless about
this; I've seen it done several times in non-cryonics situations. (It pays to
investigate the tax status of the person you got a bequest from before you
This kind of tactic used to be less common, however due to drug laws and
tightened control over all aspects of banking and money handling the IRS and
the Feds in general can track every dollar and every asset. They are getting
remarkably good at this.
I have a fair amount of experience in this area (recent) because of friends
with HIV who are in support groups and because I am in a support group for
SOs of people with terminal illnesses. You learn a lot by listening to the
horror stories of others. Also, the social workers are very helpful in
providing detailed information, and additional first hand horror stories.
Big Brother is definitely here, NOW.
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