Medicare Enrollment Season: What You Need to Know Now

I’m happy to learn that the CMS is combatting the misleading ads targeting seniors to switch from traditional Medicare plans to private Medicare Advantage plans. The number of mailers, television ads, robocalls, and emails has exploded – I received more marketing messages about Medicare this year than I did from candidates – and we all know how saturated our airwaves, phones, and mailboxes were with political ads.

Joe Namath and William Shatner should think twice about these ads. Enough said.

What should you know about traditional Medicare versus Medicare Advantage?

From October 15 to December 7, Medicare beneficiaries may change from traditional Medicare to Medicare Advantage or vice versa or switch between Advantage plans. It might be an opportunity to improve coverage, but it’s hard to know what’s best.

A recent article from The New York Times discussed a Kaiser Family Foundation report of a recent literature review comparing Advantage and traditional Medicare that looked at 62 published studies. It revealed that Advantage plans performed better only on a few measures. Beneficiaries were more likely to use preventive services like an annual wellness visit and flu and pneumonia vaccinations.

Traditional Medicare beneficiaries experienced fewer affordability problems if they had supplemental Medigap policies but ran into affordability problems if they lacked Medigap policies. They were also more likely to use high-quality hospitals and nursing homes.

Neither difference has led to significant shifts among programs either way.

A reason for changing Advantage plans is that consumers can compare them to find the best coverage. Few beneficiaries reportedly changed plans, meaning they’re either highly satisfied or making changes is just too complicated. There are 38 Advantage plans this year!

This year, as we do every year, our office offers a free evaluation for Medicare beneficiaries because we know how daunting it can be to find the right plan. Medicare Advantage and traditional Medicare work differently and picking the wrong plan can have significant and lasting health and financial consequences.

Advantage plans are simpler. They include prescription drug plans; you don’t need a separate supplemental policy. These plans might seem cheaper as many have low or no monthly premiums, but you must still pay the Medicare Part B premiums. There is a cap on out-of-pocket expenses beginning in 2023, and beneficiaries will pay no more than $8,300 in in-network expenses, excluding drugs, or $12,450 if your plan allows the use of out-of-network providers.

Only a third of Advantage plans allow this option. Most plans allow only the use of in-network providers.

Advantage plans offer vision, dental, and hearing, and some offer gym memberships or transportation. But you must look at benefits, consider if your providers are in the plan, and read the fine print. A plan offering dental coverage, but the coverage is only one cleaning a year, doesn’t do you much good if you need extensive dental care.

The one major advantage of traditional Medicare; there are no network restrictions. You can see any doctor or provider that accepts Medicare and use any hospital or clinic. Medicare also avoids the delays and frustration of requiring “prior authorization,” which most, if not all, Advantage plans require.

You can appeal a denial or pay out-of-pocket. Still, only 1% of beneficiaries do, according to a 2018 report from the Department of Health and Human Services Office of Inspector General. It might indicate many Advantage Medicare beneficiaries are going without care or paying out-of-pocket costs themselves.

Something to consider; another report from the DOHHS Office of Inspector General found that traditional Medicare would approve 13% of services denied by Advantage plans.

Traditional Medicare sets no cap on out-of-pocket expenses, so the 20% co-pay can add up quickly for hospitalizations or expensive tests and procedures. Most beneficiaries rely on Medigap policies to cover those costs. They either buy a policy or have supplementary coverage through an employer or Medicaid.

Your best bet: call our office for a free Medicare evaluation, use Medicare’s website or its toll-free number – 1-800-MEDICARE, or contact the State Health Insurance Assistance Program, a federally funded program with volunteers that help assess Medicare drug plans.

Our recommendation: don’t wait. December 7 will be here before you know it.

 

 

Reference: New York Times “Medicare Advantage or Just Medicare?”

Celebrating Veterans Day

Today we honor American veterans for their service to protect our country and maintain our democracy with respect, honor, and gratitude.

Sadly, many veterans struggle after serving our country, so today we ask you, if you can, to help the many veterans who struggle with financial, physical, and mental health challenges.

We encourage our clients, friends, and colleagues to consider making a donation to a Veterans organization, as so many of the nearly 100,000 veterans living on Long Island continue struggle to meet basic needs.

Please join us in supporting these organizations so they can do their important work of helping our veterans:

www.generalneeds.org

www.unitedway.org/mission-united

https://uvbh.org/

Nassau County’s Veterans Services Agency

VFW – Albertson, NY

American Legion – Williston Park

Happy Veterans Day – and to all veterans, thank you for your service.

 

Best Law Firm Recognition from U.S. News – Best Law Firms in 2023

We are very pleased to announce that the Law Office of Stephen J. Silverberg has been named to the U.S. News – Best Lawyers® “Best Law Firms” New York Metro in Elder Law for 2023. This is the eighth year the Roslyn Heights Elder Law firm has been recognized for our professional excellence.

The U.S. News – Best Lawyers® “Best Law Firms” rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys and review of additional information provided by law firms as part of the formal submission process. In addition to information from these surveys, the 2023 rankings incorporate 12.2 million evaluations of more than 115,00 individual leading lawyers from more than 22,000 firms. The 2023 “Best Law Firm” rankings feature law firms that have demonstrated consistently impressive performance ratings by clients and peers. The process addresses expertise, responsiveness, in-depth understanding of business, integrity, cost-effectiveness, civility, and positive referrals.

The “Best Law Firm” distinction follows Stephen J. Silverberg’s Best Lawyers 2022 accolade, presented by
U. S. News – Best Lawyers of America for his dedication in protecting the rights of seniors and their families and disabled individuals.

IRS Raises Tax Brackets and Standard Deduction in Response to Inflation

In the largest automatic adjustment to the standard deduction since core features of the tax system were indexed to inflation in 1985, the IRS has increased key tax code parameters for 2023 to reflect high inflation rates.

The top 37% top marginal tax rate will apply to individual income above $578,125 and married couples’ income above $693,750 as thresholds increase 7%, according to a recent article from The Wall Street Journal, “Inflation Causes IRS to Raise Tax Brackets, Standard Deduction by 7%”

The standard deduction will also increase to $27,700 for married couples and $13,850 for individuals, up about 7% for 2023. The maximum contribution to a healthcare flexible spending account will increase too, from $2,850 in 2022 to $3,050 in 2023.

The tax code adjustments are unusually high because inflation is now higher than it has been for the past forty years.

The goal is to prevent inflation from causing tax increases. They will appear as lower tax withholdings from paychecks as early as January 2023 and create larger take-home pay early next year.

The six tax brackets are below the top 37% bracket, with thresholds for married couples (double the individual taxpayer thresholds). These rates apply to taxable income.

In 2023, for individuals in 2023, the rates will be:

  • 10% bracket goes up to $11,000,
  • 12% bracket goes up to $44,725,
  • 22% bracket goes up to $95,375,
  • 24% bracket goes up to $182,100,
  • 32% bracket goes up to $231,250,
  • 35% bracket goes up to the top-bracket threshold.

The federal estate and gift tax unified exemption increases in 2023 to $12.92 million, and the annual gift tax exclusion rises to $17,000. Those who have used their unified credit can make up to $900,000 in gifts tax-free.

Reference: The Wall Street Journal (October 18, 2022) “Inflation Causes IRS to Raise Tax Brackets, Standard Deduction by 7%”

Medicare Part B Premiums to Decrease in 2023

For the first time in over a decade, the Centers for Medicare and Medicaid Services announced that Medicare beneficiaries will enjoy a lower premium in 2023. That’s welcome news for seniors living on a fixed income and struggling with dramatic price increases on, well, everything.

The standard monthly premiums in 2023 will be $164.90 in 2023, a decrease of $5.20 from 2022. The reduction comes after a big spike in 2022 premiums—a 14.5% increase in Part B premiums.

President Biden noted the drop in premiums at a White House event, sending a clear message of support for Social Security and Medicare. The mid-term elections are not far away, so these messages are not purely altruistic, but for seniors, they are essential.

A key driver of the hike in 2022 was a projected spend for an expensive new drug for Alzheimer’s. But since then, the drug’s manufacturer said it would cut the price, and CMS said it would provide limited coverage for its drug. The lower-than-forecasted cost was part of the drop in 2023 premiums.

Another reason for the drop was lower spending on other Part B items and services, meaning the Part B trust fund actually had an increase in its reserves. More good news.

The annual deductible for Medicare Part B beneficiaries will be $226 next year, a decrease of $7. That may not sound like much, but every dollar counts for seniors living on a fixed income.

Medicare Part B covers physician services, outpatient hospital services, home health services, durable medical equipment, and other medical and health services not covered by Medicare Part A.

The Inflation Reduction Act, passed by Congress in August, will also have an impact in 2023 for Medicare beneficiaries. Starting July 1, for a one-month supply of covered insulin, the cap for cost-sharing is $35. And those on Medicare who receive their insulin through a pump won’t have to pay a deductible. This benefit is for people who use pumps supplied through Part B.

These changes to Medicare Part B premiums come as seniors also expect a larger increase in their Social Security benefits. The COLA (Cost of Living Adjustment) will be announced next month and will be significantly higher than in 2022. Whether or not it will keep up with inflation is unknown.

Our office continues to offer free consultations on Medicare in addition to free consultations for Elder law and estate planning matters. The number of choices and plans for Medicare can be overwhelming. We are pleased to offer our knowledge and experience to community members.

 

 

Reference: CNN “Seniors to get a break on Medicare Part B premiums in 2023 (Sept. 27, 2022)

Biggest Social Security COLA in 40 Years: 8.7% Boost

The Social Security Administration has just announced the 2023 COLA – Cost of Living Adjustment – will be the highest since 1981. The 8.7% increase tops the previously highest increase of 5.9% in 2022. That was the highest in forty years also.

The monthly benefit increase for the average Social Security retiree will be $146 per month, from $1,681 in 2022 to $1,827 in 2023.

My question is, will it be enough?

Seniors living on fixed incomes have struggled with dramatic increases in fuel, home heating expenses, food prices, prescription drugs and housing costs. The pandemic economy wasn’t kind to seniors, and recent market turbulence hasn’t given anyone confidence in the short or long term economy.

The COLA may be big from a statistical viewpoint but the COLA is just that – – an adjustment for increased costs.  The U.S. Bureau of Labor Statistics reported that over the last twelve months, the all items index increased 8.2 percent before seasonal adjustment. In June, inflation hit a high of 9.1 percent.

Shelter, food, and medical care indexes were the largest of many contributors to the increase, partly offset by a 4.9 percent decline in the gasoline index. *

While this is a much-needed increase for the millions of Americans who depend on Social Security either for their entire retirement income or as a part of their retirement income, no one’s getting rich on the increase. The goal of the increase is simply to provide some relief to seniors.

The COLA is based on the inflation rate during the third quarter of the year, July through September.  Critics don’t agree with the method of calculating the COLA, arguing that it doesn’t reflect the financial reality facing older Americans.

Seniors spend less on gas and transportation, but more on medical costs.

Income levels will determine whether or not beneficiaries will be able to keep their COLA increase after Medicare Part B premiums and taxes are considered. The standard Medicare Part B premiums are expected to decrease by $5.20 next year. They are usually deducted directly from Social Security benefits.

The hope is that the 2023 COLA, combined with the lowered Medicare costs may be helpful. There will also be some lowered costs resulting from the Inflation Reduction Act, but unfortunately, the provisions from the Act don’t go into effect until 2025.

 

*U.S. Bureau of Labor Statistics: Consumer Price Index Summary (October 13, 2022)

 

Elder Law Attorney Stephen J. Silverberg Named To 2022 Super Lawyers and Scott B. Silverberg Named Rising Star 2022

For the sixteenth consecutive year, Stephen J. Silverberg has been named to the New York Metro Super Lawyers list as one of the top New York metro area lawyers for 2022. Each year, the research team at Super Lawyers selects only five percent of the lawyers in the state to receive this honor. Super Lawyers has named Silverberg to its select list of attorneys for sixteen consecutive years, from 2007 to 2022.

Stephen J. Silverberg is recognized nationally as a leader in estate planning, estate administration, asset preservation planning, and Elder Law. He is a past President of the National Academy of Elder Law Attorneys (NAELA), an organization of almost five thousand Elder Law attorneys throughout the country. He was named a NAELA Fellow, the highest honor bestowed by NAELA to “attorneys… whose careers concentrate on Elder Law, and who have distinguished themselves both by making exceptional contributions to meeting the needs of older Americans and by demonstrating a commitment to the Academy.” Mr. Silverberg was a founding member of the New York State chapter of NAELA and served as President of the chapter.

He is a Certified Elder Law Attorney (CELA), designated by the National Elder Law Foundation under the auspices of the American Bar Association. To obtain this designation, an applicant must pass a full-day written examination and is subject to rigorous blind peer review. Since 1993, fewer than 525 Elder Law attorneys in the United States have earned the designation. Martindale-Hubbell has rated Mr. Silverberg AV Preeminent (5.0 out of 5.0), the highest possible designation.

Scott B. Silverberg, for the third consecutive year, was named to the 2022 New York Metro Rising Stars list. To qualify, New York Metro Rising Stars must be younger than 40 or have been practicing for less than ten years. Each year, the research team at Super Lawyers designates no more than 2.5 percent of the lawyers in the state to receive this honor.

He is a member of the National Board of Directors of the National Academy of Elder Law Attorneys (NAELA) and the Board of Directors and Treasurer of the New York State Chapter of NAELA. Scott is Vice-Chair of the Practice Management Committee of the Elder Law and Special Needs Section Executive Committee of the New York State Bar Association. In 2022, he became a member of the Estate Planning Council of Nassau County, a member chapter of the National Association of Estate Planners and Councils (NAEPC). He is also a member of the Nassau County Bar Association.

Scott has attained the LL.M. (Master of Laws) in Elder Law from Stetson University School of Law. This rigorous program is offered only to Elder Law practitioners who have provided legal services in Elder Law matters in complex areas of the law. Stetson’s L.L.M. Elder Law program faculty comprises many leading attorneys in Elder Law.

Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from over 70 practice areas who have attained substantial peer recognition and professional achievement. A patented multiphase process includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area to create the list. The result is a credible, comprehensive, and diverse listing of exceptional attorneys. The Super Lawyers lists are published nationwide in Super Lawyers Magazines and leading city and regional magazines and newspapers across the country. Super Lawyers Magazines also feature editorial profiles of attorneys who embody excellence in the practice of law. For more information about Super Lawyers, visit SuperLawyers.com.

The Law Office of Stephen J. Silverberg, PC, represents clients in estate and tax planning, estate administration, asset preservation planning, and Elder Law and related issues. The Law Office of Stephen J. Silverberg, PC is at 185 Roslyn Road, Roslyn Heights, NY 11577, 516-307-1236, and online at www.sjslawpc.com.

Inflation’s Impact on Estate and Gift Tax Exclusions

Most of our content is original, but every now and then I come across an article I believe is so important I want to be sure clients, colleagues and friends have an opportunity to read it. Thanks to Steve Leimberg and Peter Tucci, as per the citation at the end of the article.

The following is well worth your time.

“Many estate planners are underestimating the magnitude of the anticipated 2023 and 2024 inflation adjustments to the estate and gift tax exclusion amounts.  The 2023 inflation adjustment will be about $860,000, and the inflation adjustments in the following years should push the exclusion amount to roughly $14,000,000 by 2025 – perhaps even higher, depending on the course of inflation over the next two years.  From a tax-planning perspective, this is welcome news for high-net-worth individuals, particularly those who have already made significant gifts and will now have an opportunity to make significant additional gifts without incurring gift tax.”

Peter Tucci, an associate with Proskauer’s Private Client Services Department, provides members with timely commentary that discusses the mechanics of the Internal Revenue Code’s inflation adjustment provision, the size of the coming inflation adjustments, and the impact those inflation adjustments will have on high-net-worth individuals’ estate plans.

Here is his commentary:

FACTS:

On January 1 of each year, the estate and gift tax “basic exclusion amount,” currently $12,060,000 per person, is adjusted for inflation.  But, even after more than a year of high inflation, few estate planners have internalized the scale of the coming inflation adjustments.

Those inflation adjustments will dwarf this year’s $360,000 inflation adjustment – the largest on record.  The 2023 inflation adjustment will be approximately $860,000.  Indeed, the 2024 and 2025 inflation adjustments could easily result in mid-to-high-six-figure increases and, by January 1, 2025, the exclusion amount should be in the neighborhood of $14,000,000 per person!

These looming, massive inflation adjustments have major implications for estate planners and their clients.

COMMENT:

Estate planners can be forgiven for not giving much thought to Section 1(f)(3) of the Internal Revenue Code, which contains the formula that the Internal Revenue Service uses to determine annual inflation adjustments.  Though Section 1(f)(3) has existed in some form for decades, until recently, the combination of muted inflation and a smaller basic exclusion amount meant that inflation adjustments were not particularly significant in the estate and gift tax context.

For example, the 2016 inflation adjustment boosted the estate and gift tax exclusion amount by just $20,000 (from $5,043,000 to $5,045,000).  The current environment of high inflation, coupled with a large basic exclusion amount, makes understanding Section 1(f)(3) more important than ever.

Here is the basic idea of Section 1(f)(3) as applied to the estate and gift tax exclusion amount:  the IRS calculates the average price level (using “C-CPI-U,” which is the Chained Consumer Price Index for Urban Consumers) between September 1 of the year two years before the inflation adjustment takes effect and August 31 of the year before the inflation adjustment takes effect.

Let’s call this 12-month period the “Measuring Period.”  Technically, this average is compared to the average price level from September 1, 2009 through August 31, 2010, but because that time period is used as the benchmark every year, in effect, what Section 1(f)(3) measures is the change in the average price level between the previous Measuring Period and the current Measuring Period.

In other words, the three-percent inflation adjustment for 2022 reflects the three-percent rise in average prices between the September 1, 2019 – August 31, 2020 Measuring Period and the September 1, 2020 – August 31, 2021 Measuring Period, not the 6.7-percent rise in C-CPI-U between December 2020 and December 2021.  The calendar year 2021 inflation that was not captured in the 2022 inflation adjustment will show up in the 2023 inflation adjustment, while the elevated inflation so far this year will be reflected partly in the 2024 inflation adjustment.

Stated a bit more succinctly, Section 1(f)(3) has a built-in time lag.  As a result, it takes a while for real-world inflation to translate into a significantly higher exclusion amount.  But, eventually, it does.

Below is a chart showing the projected increase in the exclusion amount under three different sets of assumptions.  The first scenario, represented by the green line, assumes six percent inflation through at least August 2024.  The second scenario, represented by the purple line, assumes four percent inflation through August 2024.  In the third scenario, represented by the red line, inflation drops to two percent.

In each scenario, the exclusion amount jumps by $860,000 in 2023.  In the high-inflation scenario, the exclusion amount increases by $900,000 in 2024 and $860,000 in 2025.  In the medium-inflation scenario, the exclusion amount increases by $850,000 in 2024 and $560,000 in 2025.  In the low-inflation scenario, the exclusion amount increases by $610,000 in 2024 and $270,000 in 2025.

Note that even in the low-inflation scenario, the 2024 inflation adjustment is enormous.  That is because the 2024 inflation adjustment will account for a portion of the high inflation during the first half of 2022.  At this point, large inflation adjustments for both 2023 and 2024 are baked in.

High-net-worth individuals stand to benefit from these inflation adjustments.  Those who have used up all or a substantial portion of their current gift tax exclusion amounts will be able to move additional assets out of their estates ahead of the scheduled reduction in the exclusion amount on January 1, 2026.

Individuals with a large amount of unused exclusion soon will have even more.  For individuals with estates that are close to, or just above, the current exclusion level, these inflation adjustments may mean the difference between a significant estate tax liability and none at all.

We should also not forget about portability for clients who die during a year with a significant amount of unused exclusion.  Whether or not the exclusion is eventually reduced, the ported amount is based on the exclusion in the year of death, not the year it is eventually used by the surviving spouse.

Estate planners should urge their clients to begin thinking about possible gifting opportunities now, rather than waiting until 2025, both to get ahead of the late-2025 rush and to give clients time to implement multi-year planning strategies.  In some cases, knowing that more exclusion will be available in the near future may change the planning calculus.

For example, imagine that Z has used up $11,700,000 of gift tax exclusion by making a large gift in 2021.  Z would like to take advantage of depressed stock market valuations by transferring stock to her children now, before the market fully recovers.  Under normal circumstances, a GRAT would be an attractive option for someone like Z.  But, given the coming inflation adjustments, Z might consider simply loaning $2,000,000 of stock to an intentionally defective grantor trust for her children’s benefit, knowing that she will likely have sufficient exclusion to forgive the loan in the not-too-distant future.

For estate planning attorneys, the coming inflation adjustments mean that 2024 and 2025 may be busier than anticipated, as even clients who made large gifts in recent years will have significant unused gift tax exclusion available to them by the middle of the decade.

Conclusion:

The 2023 inflation adjustment to the estate and gift tax exclusion amount will be by far the largest in history, and the 2024 inflation adjustment will be large as well.  These inflation adjustments will have a profound impact on the estate planning landscape for high-net-worth individuals.  Estate planning professionals and their clients should be making planning decisions against that backdrop.

Reference:

LISI Estate Planning Newsletter #2980 (September 14, 2022) at http://www.leimbergservices.com.

Copyright 2022 Leimberg Information Services, Inc.

No Inheritance Tax for Charles III

It’s good to be King.

One of many reasons— not having to pay any inheritance taxes.

For example, King Charles III inherited a royal-sized inheritance, as if becoming the King of the United Kingdom wasn’t enough, and it’s primarily tax-free. Charles takes the title of Duke of Lancaster and the corresponding duchy, valued at $750 million and which pulled in $27 million in revenue last year.

King Edward III established the duchy in the 13th century to provide the monarch with a stable income, which passed from monarch to monarch. It has succeeded.

An amendment to royal inheritance law was made in 1993 to safeguard the royal family’s assets from being wiped out if two monarchs died in a short period. The 1993 deal tried to ensure the monarchy’s wealth and protect the royal family. It’s accomplishing that. The provision was first used when the Queen Mother passed away in 2002. She left millions in artwork, antiques, racehorses, and several estates and castles, all with no inheritance tax, to Queen Elizabeth.

The purpose of the deal was to prevent the British monarchy’s wealth from being chipped away.

Her private estates like Sandringham House and Balmoral Castle, where she died, would otherwise be subject to inheritance tax unless owned in trust.

Among other assets, Charles also now owns the Crown Estate, worth more than $34.3 billion in assets. Prince William benefits too—he inherited the Duchy of Cornwall estate from his father.

Members of the royal family don’t pay the 40% estate tax levied on property valued at more than $377,000, although their constituents do. The Queen voluntarily paid income and capital gains tax since 1993, and royal watchers wonder if King Charles will follow in those footsteps.

You do not have to be a King to want to pay less in estate taxes, nor do you need a King’s ransom. An estate plan incorporating tax planning can help pass wealth onto multiple generations, even if your family doesn’t date to ancient monarchs.

 

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Football Season Begins—But Franchise Owner Estate Battles Are Forever

With 11 controlling owners of NFL franchises 75 years and older, the next few years will see many teams changing ownership and the potential for epic battles off the field.

Ten years before his death, the Denver Bronco’s owner Pat Bowlen did what he was supposed to do. He met with attorneys to create a succession plan to hand over the team after his death in a carefully prescribed manner. He established a trust and named a trustee to oversee it. As per the league’s bylaws, he filed his succession plan with the NFL and notified his heirs of developments.

Despite Bowlen’s attempt to avoid problems before and after his death in 2019, his family members embarked on fierce fighting in court and the media.

The billions of dollars at stake, the emotional attachments to football teams, and intense media coverage create a massive headache for the owner’s families and the league. Add to that the scarcity factor—there are only so many NFL teams—and the problem is ripe for massive headlines and courtroom battles.

A group led by Rob Walton bought the Denver Broncos team for $4.65 million after years of legal battles. Walton, a 77 year-old father of three and steward of the family’s Walmart fortune, hopes to avoid the estate pitfalls plaguing the Bowlens and other NFL team family owners.

In the Denver Bronco’s case, Bowlen tried to give up control of the team in response to his suffering from Alzheimer’s disease. He revoked one trust to create a new one overseen by three trustees, each someone he knew for many years. None were family members. The trust was to manage the structure of the team’s ownership. But it gets complicated. A limited partnership, PDB Sports, owned the team, which was owned by a limited partnership, Bowlen Sports, owned by Patrick Bowlen and his brother John Bowlen. The trust also operated other Bowlen-owned properties, including the company that managed the Mile High Stadium

It didn’t go as planned. Seven children from two marriages and three siblings who were co-owners at different points and had their own children all disagreed on the team’s future and the trustees’ objectivity. It got very messy, with issues of incapacity, NFL ownership rules, equity being bought and sold, and massive fighting and litigation.

This is not a new scenario. Joe Robbie, the former owner of the Miami Dolphins, passed away in January 1990. The bulk of his estate was tied up in the Dolphins and he had not planned properly. Due to the family infighting, Robbie’s children had to sell the franchise at a deeply discounted price to pay the reported $47 million in estate taxes.

It’s far from the only NFL franchise ownership battle, and it won’t be the last.

Lessons to be learned: do estate planning, keep everyone involved informed, and implement many safety measures. Communication and trust-building between family members are critical. People are more likely to go with the succession plan if they hear it from the person creating it and have time to discuss and understand the plan.

Reference: Variety “Broncos’ Fumbling Handoff Reveals Perils of NFL Estate Planning”

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