What Will Happen to Your Family Business After You Die? Lessons from the NFL

Many Tri-cities residents own their own business. Some might even be owned together with other family members. This can raise a number of questions when it comes to estate planning. Do you want to leave the business to your children? Do you want it to be sold? If so, what happens to the other family members involved in the business?

The answers to these questions will depend on your unique situation, which is why it’s important to work with an experienced Kennewick estate planning attorney. In this article, we’ll briefly explore some of the more high-profile examples of family-owned businesses in America–NFL franchises–and what lessons you can takeaway from how they handled estate and succession planning.

Seahawks Remain in Trust Years After Owner’s Death

In Seattle, the Seahawks have been under the control of a trust since the death of principal owner Paul G. Allen in 2018. Allen placed most of his assets–including the Seahawks and the NBA’s Portland Trail Blazers–into a trust now run by his sister, Jody Allen. Although the terms of the trust are private, media reports suggest the trust is eventually required to sell the team. But the trust still owns the team nearly six years after Allen’s death, which may be due to the terms of a 1997 referendum used to finance the Seahawks’ stadium. Those terms state that if Allen or his estate (or in this case, his trust) sell majority control of the team before May 2, 2024, 10 percent of the proceeds must be turned over to the State of Washington.

It is not as unusual as you might think to run a business through a trust. Indeed, a trust can have many benefits. For example, there can be less interruption to the business itself as ownership control does not pass through probate. And the terms of the trust itself can generally be kept private. On the other hand, there can be a number of special legal and regulatory challenges to running a business in this way.

Texans Owner Faces Guardianship Petition

Another NFL ownership with estate planning implications involves the Houston Texans. Principal owner Bob McNair died in 2018. His widow, Janice McNair, then assumed control of the team. But recently, one of the McNair’s children, Cary McNair, petitioned a Texas court to place his 87-year-old mother under a guardianship. Cary McNair alleges that his mother is no longer icapable of running the Texans. Janice McNair and her other son oppose the petition, which as of this writing remains pending before the Texas courts.

In Washington, like Texas, a judge can appoint a guardian for an adult who is unable to either care for themselves, manage their financial affairs, or both. But a guardianship is always a measure of last resort. If there are any less restrictive means of protecting an incapacitated person–such as an existing power of attorney or a trust–the court will prefer that to a guardianship.

Contact Moulton Law Offices Today

Estate planning is for everyone, not just those of us who own a business. But if you do own or operate a family business, it is especially critical to have a plan in place for your succession or death. If you need advice in this area, contact Moulton Law Offices, P.S., today to schedule a consultation. We serve clients throughout Spokane, Kennewick, and Yakima.

Sources:

seattletimes.com/sports/seahawks/why-a-sale-of-the-seahawks-is-unlikely-before-may-2024/

msn.com/en-us/sports/nba/mcnair-family-court-dispute-what-is-guardianship-and-how-is-it-different-from-conservatorship/ar-AA1n0skO