LongevityFP Plans Tontine-Style Fund That Cancels Shares at Zero When Investors Die

No money changes hands until 2040, and the fund acknowledges that its structure has never been tested by a court, a state insurance regulator, or the IRS.

August 17, 2026

Longevity Financial Advisors is bringing a tontine to the registered fund market.

The Minnetonka, Minnesota adviser has registered the LongevityFP US Equity Large-Cap 500 Index Fund (1960), a non-diversified closed-end fund that will operate as a tender offer fund and pay distributions only to investors who live into their eighties, nineties and beyond. Every share is tied to a designated natural person born in 1960, the reference life. When a reference life dies after the offering closes, the associated shares are canceled at zero per share, and their economic value stays in the fund and accretes to the shares of surviving reference lives.

That is the whole mechanism, and it is unusually blunt. A shareholder whose reference life dies on or after the offering close date but before age 80 loses the entire investment — no death benefit, no return of premium, no surrender value. The prospectus states that the fund is not an annuity, not an insurance contract and not backed by any guarantor, and that shareholders will have none of the protections of state insurance law, including state guaranty funds.

Twenty-one payments, spread across two decades

The fund’s primary objective is twenty-one annual survival-contingent distributions to shareholders whose reference lives reach ages 80 through 100. Its secondary objective is to track the VettaFi US Equity Large-Cap 500 Index, a rules-based, market-cap-weighted index of the 500 largest U.S. public companies, licensed from VettaFi. At least 80 percent of net assets go into large-cap U.S. equities, and the fund does not take defensive positions.

Net proceeds are split across twenty-one distribution sleeves in fixed percentages the adviser and board cannot change. Each sleeve funds one distribution, stays fully invested in index constituents until its distribution year, then sells down in roughly equal monthly increments into money market instruments. Allocations rise from 3.94 percent for the 2040 payment at age 80 to a peak of 5.88 percent for the 2050 payment at age 90, then fall to 2.24 percent for the final payment in 2060. The sleeves are book-entry units of account, not segregated pools; the fund holds one commingled portfolio and strikes NAV at the fund level.

The fund runs in three phases:

• Offering period — continuous sales and discretionary tender offers; the board expects to begin considering a close once subscriptions reach $200 million, the level at which it believes fixed costs can be spread economically.
• Pre-distribution period — runs to the end of 2039, with no new subscriptions and no tender offers.
• Distribution period — begins in 2040 and runs through wind-down, which the board may trigger early if surviving reference lives fall below 5 percent of the original group.

Terms built for the fee-based channel

Shares are offered initially at $10.00 and thereafter at NAV, with a 7.00 percent front-end load waived in full for fee-based registered investment adviser accounts. The minimum investment is $5,000 and the maximum $100,000, applied per investor and in the aggregate across every share tied to a single reference life. Each subscriber must also represent that the purchase does not exceed 5 percent of liquid net worth, excluding a primary residence, furnishings and automobiles.

The management fee moves through three segments: 1.00 percent of average daily net assets during the offering period, 0.25 percent during the pre-distribution period, and 0.50 percent once distributions begin. Total annual fund-level operating expenses are estimated at 1.56 percent during the offering period, against a contractual 1.75 percent cap running three years, with a three-year recoupment right. That estimate assumes average net assets of $35 million in the first fiscal year, well short of the offering-close target.

Liquidity is close to nonexistent. Shares are unlisted, will not be listed, and transfer only in narrow circumstances. Tender offers are discretionary, subject to proration, priced at NAV less a 2.00 percent repurchase fee retained by the fund, and they stop permanently at the offering close date; the sales load is not refunded. After that, the only liquidity is the annual distributions beginning in 2040 and whatever remains at liquidation.

Guardrails against speculating on a stranger

The fund is designed for people investing on their own lives, but it accommodates trusts, family entities and spousal accounts through a qualifying connection test. A holder other than the reference life must be a spouse or domestic partner, a close blood relative, someone related in a way giving rise to a substantial interest engendered by love and affection, someone with a lawful and substantial economic interest in the continued life, or an entity maintained for the benefit of such persons. Control of an entity alone does not qualify, and documentation is required at subscription.

The consequence of getting this wrong is severe. If the adviser determines, subject to board approval and a 30-day notice-and-response process, that a qualifying connection representation was untrue when made, the reference life is treated as having died and the shares are canceled at zero. That determination can come years later, including during the survivorship verification before any distribution.

An untested structure

The fund is candid that it is building on unsettled ground. The survivorship structure and the zero-price cancellation are novel, untested in litigation, and could be recharacterized by a court or regulator, forcing a restructuring, a halt to sales in some states, or a wind-down. The prospectus works through state insurance law at length, arguing that because nobody indemnifies anyone or pays on a contingent event, neither the fund nor its shares constitute insurance, while conceding a regulator or court could disagree. It also raises the common-law rule against wagering on human life. Shares are covered securities and largely exempt from blue-sky registration, but the fund will not accept subscriptions from Louisiana residents, the one state identified as prohibiting the sale of tontine funds.

Tax treatment is similarly open. The fund intends to qualify as a RIC and expects NAV accretion from canceled shares to be treated as unrealized appreciation, with cancellation at zero producing no gain or loss. Neither position has been confirmed by the IRS or addressed in a published ruling. Meanwhile, RIC distributions default into a reinvestment plan and are taxable when paid, while the survival-contingent distributions may be largely return of capital — a mismatch that can leave shareholders owing tax on cash they never received.

Much of the operating apparatus is also still blank. The adviser was organized in Delaware only in October 2025, and the distributor, administrator, transfer agent, custodian, auditor and chief compliance officer are all unnamed, as are the expense example figures and the seed capital amount. Jon Sabes controls the adviser through parent LongevityFP, LLC, and serves as the fund’s president, sole portfolio manager and only interested trustee on a three-member board. LongevityFP, LLC owns the fund’s name and operating intellectual property, has patent applications pending on the structure, and licenses both royalty-free only while Longevity Financial Advisors remains adviser.

For advisors, the underwriting question is not the portfolio, which is a plain index sleeve, but the population. Returns depend on how the 1960 cohort actually dies, and the fund sets no minimum number of reference lives, makes no attempt to diversify the pool beyond birth year, and explicitly declines to adjust for known longevity differences between demographic groups.