In honor of the kick off of the 2010 NFL season, it's time to discuss a CNBC video clip that I viewed a few weeks ago. In the clip Sal Galatioto, of Galatioto Sports Partners, said that he knows for sure that one NFL franchise is going to be shopped around beginning this month because the owner is working on his estate plan and is looking to sell a 30% interest in the team.
Reading between the lines, while I have no idea which NFL franchise Mr. Galatioto was talking about, apparently the owner doesn't think he's going to die this year, like Yankees' owner George Steinbrenner did, thereby avoiding federal estate taxes altogether. Instead, the owner must be thinking ahead to when the estate tax comes back and will take a huge bite out of his estate. This has been the case for many professional teams, including Joe Robbie and the Miami Dolphins, Jack Kent Cook and the Washington Redskins, and more recently Bill Davidson and the Detroit Pistons. With professional sports franchises being multi-million dollar or even in some cases billion dollar businesses, they show on a grandiose scale how estate taxes can devastate a business and force a sale when the family really doesn't want to sell. I have witnessed this many times in my estate planning practice on a much smaller scale, and yet it still ticks off the surviving family members just as much when their family's small business has to be sold because there is not enough cash available to pay the estate tax bill. And do you think in these situations the heirs receive top dollar for the family business? Absolutely not.
To anyone who says that the estate tax doesn't hinder small businesses, I can say for a fact that I have witnessed families forced to sell their business in order to pay the estate tax bill. So yes, it does happen, but yes, with proper planning the owner could have reduced or even eliminated estate taxes and yet chose to do nothing. So hats off to that NFL franchise owner who is thinking ahead about the estate tax bill that will due when he dies. I can only hope that this story will help to open up some eyes and encourage business owners to start making their business exit plan and estate tax plan now.
- Death, the Future of Estate Taxes, and NFL Football
- Death, Estates Taxes, and the Super Bowl
- Death, Estate Taxes, and the Pittsburgh Steelers
- Death, Estate Taxes, and the St. Louis Rams
- Death, Estate Taxes, and NBA Basketball
- 6 Steps to Exiting Your Business if You Become Disabled or Die
- Where Will the Cash Come From to Pay Your Estate Tax Bill?
- How to Reduce or Even Eliminate Your Estate Tax Bill
Or they can just take the George Steinbrenner approach and die this year. However, none of my clients seem to like that advice.