What is a fertility trust and how does it differ from clinic or RTL consent forms?
“Why would I establish a trust when I signed a form at the clinic/RTL form stating disposition wishes?”
- Consent forms by nature must remain general in order to broadly cover the needs of all clients. Using a trust, clients can consider a wider range of options and customize their trust provisions to match their particular life circumstances and family dynamic. As life changes, the client can easily change the trust with an addendum.
- Unlike the consent form, which becomes void upon the death of the client, the trust can survive death, and the clients wishes can continue to be carried out by a trusted individual, named by the client in the trust, for up to 100 years. Also, unlike the consent form, the trust is an entity which can be funded after death to continue payment of storage fees. Liquid assets to pay storage fees can either be allocated to the trust from the estate, or by naming the trust as beneficiary of a new or existing life insurance policy. The amount can be calculated during life based on the terms of the trust and set into place while the client is living. This reduces the possible financial burden on the family after death.
- Another benefit at death: trust assets are not probate assets. The terms of the trust control without court interpretation. Courts are inconsistent (to put it gently) when interpreting consent forms, and sometimes refuse to honor the client’s wishes listed on the form. Using a trust, ownership passes per the trust automatically without the necessity of a court order.
- Divorce: We’ve all seen the headlines. Divorce is a legal matter. A trust can provide the legal language that judges understand in a divorce proceeding, such as the clients intend that the trust may be introduced as a settlement agreement in a divorce proceeding with specific regard to their stored specimens. This is, at the least, very persuasive to the judge and should greatly limit extended disputes over specimens in a divorce.
Who controls the trust? Do I have to give the power to someone else?
No. This is a revocable trust. The client (or if co-creators such as couple storing embryos, both clients) remains in control of the trust, as Trustee, while the client is living and competent to be Trustee (if Co-Trustees, the survivor will generally serve after death of the other Trustee.) Once the client dies, if the trust continues, it becomes irrevocable. This insures the Successor Trustee can only carry out the terms of the trust as written, and not amend at will or misappropriate the funds which are intended for storage fees.
Will I need to file a tax return on the trust? Are there any reporting requirements?
No, this is a private trust, and while there are no liquid assets in the trust (generally during the life of the client), the trust contains no income producing property. No Federal Taxpayer Identification Number is required and no tax return is due unless the trust produces income.
If I’m storing gametes, what are the advantages a trust can offer?
- Survival after death. Some clients, especially oncology patients, would like for their spouse to be able to use their gametes to conceive after their death. If this is the case, it is very important that they have specified this in writing. It’s not always sufficient to check the box stating the surviving spouse receives the gametes at death. Some states require that this is in writing in order to treat the decedent as the parent of that child. If the decedent is not treated as the parent this could affect social security benefits and rights of inheritance to which the child would otherwise be entitled. The best practice is to address the intent to parent after death in writing. Consent forms don’t always take the client down that path, but should.
- Restrictions on donation. If gametes are available for anonymous donation, the client can be very specific regarding geographical restrictions, or even ethnicity or sexual orientation if that is important to the client. Using a trust, the client can get very specific regarding recipients.
- Oncology patients who are minors. Parents, as legal guardians, have the right to make decisions on behalf of their child with regard to the child’s gametes/tissue. Parents need to relinquish control when the child reaches majority, and establishing a trust which names the child as Trustee upon majority makes this transition seamless. The child then has the ability to use the gametes/tissue at will, or change the terms of the trust in any way to accommodate his or her current or future circumstances.
How does the fertility trust work together with ReproTech Storage Agreements?
The trust only addresses term of storage and specific disposition wishes (to whom, under what circumstances, etc.) By the terms of the trust, ReproTech retains complete control over storage and release protocol, fees, collection of fees and consequences of nonpayment, etc. The client will authorize Ms. Pittman's firm to share the trust for ReproTech files, or will personally remain responsible for sharing the trust with ReproTech. Ms. Pittman's firm will ask for authorization to share (technically it’s privileged) when the client establishes the trust, but the acting Trustee will always have the authority to share so that ReproTech can rely on those provisions when it becomes necessary. In short, if a ReproTech client has established a trust, it should be “business as usual” for ReproTech, and the trust would only need consideration when confirming disposition wishes.