Friday, April 26, 2019
Article on Winning Starts at the Top: Estate Planning Considerations for the Modern Day Sports Team Owner
Duncan Ternus recently published an Article entitled, Winning Starts at the Top: Estate Planning Considerations for the Modern Day Sports Team Owner, Wills, Trusts, & Estates Law eJournal (2019). Provided below is an abstract of the Article.
Professional sports team owners need to carefully plan their estates in order to win on and off the field. These individuals are arguably the most important figures in a professional sports team because their actions affect everyone associated with the team, from players to fans. Team owners represent some of the wealthiest people in America and have large estates that often include other business ventures besides their sports teams. When team owners take inadequate estate planning steps, their estates are often forced to sell their teams in order to pay estate taxes. This in turn can lead to team instability or, worst case scenario from a fan’s perspective, a forced relocation of the team.
This comment examines some of the ways today’s professional sports team owners can plan their estates in order to not only continue their personal success but their team’s success as well. Federal estate taxes are the largest hurdle for team owners because the tax affects only the wealthiest of estates, and planning one’s estate to avoid these estate taxes is vital for a team owners’ success. The future of the federal estate tax remains to be seen under the Trump administration, which could lead to substantial gain for team owners should the tax be repealed altogether. Team owners also need to consider state estate taxes for the states in which they are domiciled.
Over the past few years, notable professional sports team owners’ estates have experienced varying degrees of success. This comment will examine in detail the estates of Tom Benson and the New Orleans Saints and Pelicans, Ralph Wilson and the Buffalo Bills, William Davidson and the Detroit Pistons, and Jerry Buss and the Los Angeles Lakers. This comment also provides many strategies for sports team owners to limit their estate taxes, such as use of gift giving, charitable donations, family limited partnerships, and irrevocable life insurance trusts. A family business plan can also ensure a stable transition of ownership when the owner dies and passes the team to the family.