Estate Facts

[Yasgur's Farm]

I was just doing a little research on estate taxes... Here's the findings...

Federal:
$5.34M exempt from taxes.
Remainder taxed at 40%.

NYS:
$1M exempt for estate of a person who died prior to April 1, 2014.
First $10.039M (less exemption) taxed at 5.085%.
Remainder taxed at 16%.

To put this in perspective, Ralph'd estate would pay the following based on the Bills selling for $1B...
Federal gets $397,864,000
NYS gets $158,853,393.15
Total taxes = $556,717,393.15 (55.67%)
Total remaining for trust = $443,282,606.85 (44.33%)

That's an obscene government money grab IMO.

[SpikedLemonade]

Sure but the government will end up cutting a cheque for $600M if a new stadium is ever built which is basically what they get now in taxes plus 8 years interest.

[Fletch]

Sure but the government will end up cutting a cheque for $600M if a new stadium is ever built which is basically what they get now in taxes plus 8 years interest.

Cheque

LOL

You really are Canadian.

[Albany,n.y.]

Is it the same for a trust? If there was a way to lower those rates I'm sure Ralph had it covered.

[Bill Cody]

I was just doing a little research on estate taxes... Here's the findings...

Federal:
$5.34M exempt from taxes.
Remainder taxed at 40%.

NYS:
$1M exempt for estate of a person who died prior to April 1, 2014.
First $10.039M (less exemption) taxed at 5.085%.
Remainder taxed at 16%.

To put this in perspective, Ralph'd estate would pay the following based on the Bills selling for $1B...
Federal gets $397,864,000
NYS gets $158,853,393.15
Total taxes = $556,717,393.15 (55.67%)
Total remaining for trust = $443,282,606.85 (44.33%)

That's an obscene government money grab IMO.

The estate tax won't be due until Mary dies, there's an unlimited marital deduction.

[Fletch]

None of this really affects the sale of the team though.

Even if the family only netted $100M it would still be more than enough for everyone in the family to live a ridiculously wealthy lifestyle.

[SpikedLemonade]

Is it the same for a trust? If there was a way to lower those rates I'm sure Ralph had it covered.

An estate freeze or two but we just don't know.

[WagonCircler]

Sure but the government will end up cutting a cheque for $600M if a new stadium is ever built which is basically what they get now in taxes plus 8 years interest.

So what? Rich Stadium cost $22 MIL to build and has paid for itself dozens of times over.

A stadium, unlike most government expenditures, is a revenue generator. There is a net gain.

(Although, maybe not if you're relying on the Argos.)

[Skooby]

Sure but the government will end up cutting a cheque for $600M if a new stadium is ever built which is basically what they get now in taxes plus 8 years interest.

Jacques wrote a cheque, eh?

[SpikedLemonade]

Kiss my stinkin' hairy arse.

[Skooby]

Kiss my stinkin' hairy arse.

LOL, sorry I had too.

[Yasgur's Farm]

zedzedzedzedzedzedzedzedzedzedzedzedzedzed.... Organeyezation, etc.

[Fletch]

So what? Rich Stadium cost $22 MIL to build and has paid for itself dozens of times over.

A stadium, unlike most government expenditures, is a revenue generator. There is a net gain.

(Although, maybe not if you're relying on the Argos.)

Man are you dense, and ignorant.

[Fletch]

Jacques wrote a cheque, eh?

LOL

Regarding the stadium though, it's unlikely that it would cost as little as $600M anyway. That's very low-end for modern NFL stadiums. All we'd need is low-end, but selling that to the NFL may be tough.

[SpikedLemonade]

Regarding the stadium though, it's unlikely that it would cost as little as $600M anyway. That's very low-end for modern NFL stadiums. All we'd need is low-end, but selling that to the NFL may be tough.

$600M +
$150M (from NFL) +
$125M (from selling PSLs) +
$125M (from owner after collecting $50M for 25 year naming rights)
=$1B

[WagonCircler]

Man are you dense, and ignorant.

A typical douchebag response from you, Felch.

You may now resume your whining.

Face it, your dreams are toast, *****.

[don137]

The Steinbrenner estate saved hundreds of millions in 2010 when there was no federal estate tax when George died.
Then again the government is paying 7 billion a week in interest due to the size of this country's debt so I guess that it's not a big deal for the government. That's a discussion for a different forum.

Isnt Mary Wilson fairly young compared to RW? If so could be many years before the government sees it's share.

[WagonCircler]

The Steinbrenner estate saved hundreds of millions in 2010 when there was no federal estate tax when George died.
Then again the government is paying 7 billion a week in interest due to the size of this country's debt so I guess that it's not a big deal for the government. That's a discussion for a different forum.

Isnt Mary Wilson fairly young compared to RW? If so could be many years before the government sees it's share.

But the capital gains tax will be due when she sells the team.

[Bill Cody]

But the capital gains tax will be due when she sells the team.

That will be minimal. Mary receives a "step up" in basis for capital gains purposes to the value of the team at the date of Ralph's death. So she will only pay capital gains on any increase in value of the team from that date.

[Bill Cody]

So what? Rich Stadium cost $22 MIL to build and has paid for itself dozens of times over.

A stadium, unlike most government expenditures, is a revenue generator. There is a net gain.

(Although, maybe not if you're relying on the Argos.)

I don't think the calculations today are remotely like Rich stadium, it's not at all clear it's a revenue generator. If the state ponies up 200m how long will it take them to recover that in taxes? Pretty long time I'd say.

[bob86]

A couple of odds and ends on the estate tax issues:

First the estate tax has two main purposes. One, it raises money for the government from very rich and very dead people. The Tax only applies to the extremely wealthy (less than 1% of the people pay the Federal Tax) and the effective rate of tax has come down from where it was 20 years ago. If anyone one on the broad ever has to pay the Federal Estate tax, I don’t feel sorry for you or your family. You would have lived a privileged and good life and your immediate heirs will never have to work a day in their life. Second, and the original purpose of the tax was to prevent America from turning into Europe in the Middle Ages where a few families controlled all the wealth and past it down for hundreds of years to their good for nothing heirs. The Tax has only been partially successful in stopping American royalty from developing. Whole courses are taught about the theory and application the Estate Tax at NYU.

Next, the tax picture for Wilson’s estate has many more layers than set out above. Besides the Estate Tax, there will be certain capital gains taxes that may be due. The old approach of leaving everything to the Merry Widow to get a stepped up basis and avoiding the capital gains on an asset sale has been limited by recent changes in the Code. Which means that even if Wilson left everything to his wife (which is doubtful) to avoid immediate payment of the Estate Tax, the sale of the Bills will generate tens of millions in cap gains tax liability. Moreover, because Wilson was a Michigan resident at death, Michigan’s estate tax law applies and depending on a number of factors, Michigan may collect most of the state estate tax money and not New York.

Clearly Wilson had an estate plan in place when he passed. From what is known publicly, Wilson’s plan did not focus on limiting has estate’s tax liability. Selling assets with high cap gains right after death normally is something you want to avoid if your desire is to avoid or delay taxes. Wilson had something else in mind when setting up has estate, what that is defies explanation at this point.

[jimmifli]

Wilson had something else in mind when setting up has estate, what that is defies explanation at this point.
How much privacy is typically involved granted to trust?

Specifically, would the NFL have or be able to gain access to the details? Is there ever a circumstance where the details of the trust could become public record?

Asking because you sound like you know a little bit, feel free to pass if you don't know.

[Fletch]

How much privacy is typically involved granted to trust?

Specifically, would the NFL have or be able to gain access to the details? Is there ever a circumstance where the details of the trust could become public record?

http://insurancenewsnet.com/oarticle/2014/08/01/ralph-wilsons-will-leaves-no-clue-about-sale-of-bills-a-538753.html

I posted this in its own thread, you should read it, I think it will answer some of your questions. It sounds as if we will never know some things.

Presumably you're more interested in the process and what it means for us fans than what it means for Wilson's heirs. I know that I don't care what it means for them, they're all set for life on this sale one way or another. I'm only interested in what it means for us as fans.

[AlbanyFan]

Wow - That's incredible. Doesn't seem right that the govt gets so much of the fruit of a man's work over his lifetime. And believe me, my kids do not have to worry about losing any of my estate to taxes when I go. :)

[bob86]

I don’t know Michigan law, but as a general rule in trusts like Wilson’s, if the terms of the trust have become public record, something has gone wrong. High Wealth Trusts are not inherently secret or confidential documents, but lawyers and bankers make extraordinary efforts so the trusts don’t have to be recorded in the County Clerk’s Office or filed with a Probate or Surrogate Court. Trusts controlling the wealth of some of America’s richest and well-known family have remained out of the public record for generations. The Bank of New York’s trust department for example holds trust documents under close control and often the beneficiaries of the trust have never seen the actual document that controls their wealth. Trust like that only are seen by the public when there is a fight among the parties or a lawyer screws up.


Like I said the trust document in Wilson’s case is not in all likelihood protected by law against public disclosure. It is only confidential because Wilson’s lawyers keep close control of it. If the NFL, a bank or the IRS wanted a copy of the trust document, I am sure Wilson’s lawyers would send it right over because they have a need for it and various laws or agreements would keep it private.

[jimmifli]

Like I said the trust document in Wilson’s case is not in all likelihood protected by law against public disclosure. It is only confidential because Wilson’s lawyers keep close control of it. If the NFL, a bank or the IRS wanted a copy of the trust document, I am sure Wilson’s lawyers would send it right over because they have a need for it and various laws or agreements would keep it private.
Thank you. I was wondering if he used this structure to limit the pool of bidders without having to disclose that fact to other parties (ie NFL). But it sounds like no.

It seems a strange way to wrap things up. Maximizing taxes owed, and dictating who the team can be sold to.

Rich people do weird things with their money, but this is a new one.

- - - Updated - - -


http://insurancenewsnet.com/oarticle/2014/08/01/ralph-wilsons-will-leaves-no-clue-about-sale-of-bills-a-538753.html

I posted this in its own thread, you should read it, I think it will answer some of your questions. It sounds as if we will never know some things.

Presumably you're more interested in the process and what it means for us fans than what it means for Wilson's heirs. I know that I don't care what it means for them, they're all set for life on this sale one way or another. I'm only interested in what it means for us as fans.
Yes I read it. There isn't anything in the article that answers my questions.

[Fletch]

Yes I read it. There isn't anything in the article that answers my questions.

Sorry bout that. Sounds like you want specifics, the specifics that it says likely are not forthcoming, now or ever. Prepare to be disappointed.

[jimmifli]

Sorry bout that. Sounds like you want specifics, the specifics that it says likely are not forthcoming, now or ever. Prepare to be disappointed.
I wanted specifics about estate law. Bob sounds like he knows what he's talking about and provided me an answer.

[Fletch]

I wanted specifics about estate law. Bob sounds like he knows what he's talking about and provided me an answer.

Again, sorry. I was responding to your questions


How much privacy is typically involved granted to trust?

Specifically, would the NFL have or be able to gain access to the details? Is there ever a circumstance where the details of the trust could become public record?

I was referring to these parts of that article:


They said that most wealthy people plan their estates the exact same way, leaving their assets in the hands of a trust in order to maintain privacy.

But the legal structure Wilson set up leaves a huge question unanswered:

Did the Bills founder -- whose loyalty to Buffalo was legendary -- plan his estate to include a provision encouraging or even requiring the trust that now controls the team to sell it to an owner who would agree to keep it in Buffalo?


We may never know the answer to that question, even if Wilson's estate sells the Bills to an owner who vows that the team will remain in Buffalo for decades to come.


That's because, in most cases in Michigan and elsewhere, trusts remain private, whereas wills are public documents.



I thought that that addressed it, again, at least superficially. Sorry to have wasted your time.

[POTLAND PSILBYLO]

http://www.economist.com/blogs/lexington/2010/10/estate_tax_and_founding_fathers

People are generally unaware of the founding fathers' support of the estate tax.


"If there was one thing the Revolutionary generation agreed on — and those guys who dress up like them at Tea Party conventions most definitely do not — it was the incompatibility of democracy and inherited wealth.

With Thomas Jefferson taking the lead in the Virginia legislature in 1777, every Revolutionary state government abolished the laws of primogeniture and entail that had served to perpetuate the concentration of inherited property. Jefferson cited Adam Smith, the hero of free market capitalists everywhere, as the source of his conviction that (as Smith wrote, and Jefferson closely echoed in his own words), "A power to dispose of estates for ever is manifestly absurd. The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural." Smith said: "There is no point more difficult to account for than the right we conceive men to have to dispose of their goods after death."


Part of the problem of feudalism is the ability for wealth, or the means to obtain it, is kept from successive generations, by binding it up within a few families. They soon make themselves kings.

[stuckincincy]

http://www.economist.com/blogs/lexington/2010/10/estate_tax_and_founding_fathers

People are generally unaware of the founding fathers' support of the estate tax.

Part of the problem of feudalism is the ability for wealth, or the means to obtain it, is kept from successive generations, by binding it up within a few families. They soon make themselves kings.

I understand that, but add that the Founding Fathers didn't envision income taxation. You earn money, you get taxed. The business you have or you work for gets taxed (and not just taxes on income). Buy some equities, dividends get taxed. Purchase goods or services, you get taxed. Tax after tax after tax. Then you die - taxed again.

Death/Inheritance/Estate taxes by State:

http://wills.about.com/od/stateestatetaxes/fl/2014-State-Death-Tax-Exemption-and-Top-Tax-Rate-Chart.htm



The Founding Fathers were keen about limited government. About it becoming the de facto royalty. But now it is. I chuckle when I hear folks talk about flat taxes. That would seriously dent the ability to punish those who are not liked by the governmental oligarchy, and reward those that submit.


"An unlimited power to tax involves, necessarily, a power to destroy." :

http://www.bartleby.com/73/1798.html


Well - we will solve nothing here - such topics have been debated for centuries...