George Steinbrenner, owner of the New York Yankees, passed away yesterday. During his 37-year ownership, the flagship franchise won 7 World Series Titles. Steinbrenner bought the Yankees with a group of investors for $10 million from CBS in 1973. His personal investment was $160,000, which has grown to an estimated $880 million under his ownership and management.
Because of the timing of his death, George Steinbrenner’s estate (estimated by Forbes at US$1.15 billion) could escape the U.S. federal estates tax. Steinbrenner died during a temporary 1-year lapse period – the tax lapsed at the beginning of 2010, and could not be revived in time to apply to the year 2010. At 55% on estates worth $3.5 million or more, the straight tax hit would have been about $600 million.
Of course, his estate’s exposure to the estates tax would depend on his estate planning, as noted in this Wall Street Journal article. But Steinbrenner’s death is free of the 55% estates tax, unlike the death of Chicago Cubs owner P.K. Wrigley, whose family had to sell that franchise to fund the tax liability on his death in 1977. That’s fortunate, because according to the Wall Street Journal, the franchise is 95% leveraged in debt to finance the construction of the new Yankee Stadium.
Steinbrenner’s heirs are his wife and children, and the franchise will be apparently be spared succession issues. Steinbrenner’s sons have been managing the franchise since 2007 according to the New York Times. Steinbrenner’s succession plan, which he openly discussed in 2003, appears to be succeeding as with everything else he did.
Have a great day,
Christopher M.B. Graham – Click here for more information on Chris Graham.
There were several estate related web postings that came to my attention this week.
The Elder Abuse Awareness component of the Federal Government’s New Horizons for Senior’s Program announced 16 new projects directed at the prevention of elder abuse. Somewhat to my surprise (largely because I assumed it was an area under provincial jurisdiction), the Federal Government has significantly increased funding to this program.
In Britain, a committee is being charged with the task of considering future changes aimed at preventing the reigning monarch from sealing wills. Her Royal Highness Queen Elizabeth II directed that the Last Wills of both Princess Margaret and the Queen Mother be sealed, a decision that has been criticized in many quarters.
And lastly, let’s not forget the Last Will of George Washington which was drafted by the late President himself with "no professional character being consulted", his Will being an endeavour that "occupied many of my leisure hours." Clocking in at 23 pages, Washington’s Will also had an addendum detailing the location, description and value of his numerous properties (knowledge gleaned from his days as a land surveyor and speculator).
Have a great weekend!
David M. Smith