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Death,Taxes and the NFL - Does Your Business have a Plan for the Final Exit from the Field?

By Deirdre R. Wheatley-Liss, Esq.

<p><img width="250" height="192" vspace="5" hspace="5" align="left" alt="" src="http://images.forbes.com/media/lists/30/2010/new-york-giants.jpg" />If you or your family owns a business, you've heard from many advisors "You need to have an exit strategy".  Now, this normally refers to cashing out of your business by selling to an employee, bringing on a family member, merging with another company, or selling out of the business. <strong>But what if the exit strategy you need to be creating is to plan for when you leave this earth altogether?</strong>  As <a href="http://wills.about.com/bio/Julie-Garber-40412.htm">Julie Garber</a> points out today at <a href="http://wills.about.com/b/2010/09/15/death-taxes-and-nfl-football-which-team-is-going-on-the-market-to-plan-for-estate-taxes.htm">Julie's Will & Estate Planning Blog</a>, <strong>taxes at the death of the owner can kill a business; but with advanced planning, this does not need to be the situation.</strong></p> <p>Case in point, Julie refers to a story that at least "one NFL franchise is going to be shopped around beginning this month because the owner is working on his estate plan and is looking to sell a 30% interest in the team."  This makes sense.  Sports franchises are worth millions, and sometime billions <a href="http://www.forbes.com/2010/08/25/most-valuable-nfl-teams-business-sports-football-valuations-10_land.html">(Forbes.com</a> lists all NFL franchises by value here - the <a href="http://www.forbes.com/lists/2010/30/football-valuations-10_Dallas-Cowboys_300988.html">Cowboys </a>top the ranks at 1.8 Billion, the <a href="http://www.forbes.com/lists/2010/30/football-valuations-10_New-York-Giants_304328.html">Giants </a>are 4th at $1.2 billion, and the <a href="http://www.forbes.com/lists/2010/30/football-valuations-10_Philadelphia-Eagles_301623.html">Eagles </a>are 7th at $1.1 - a value that certainly did not show up on the field at their home opener on Sunday). </p> <p>Why look to plan now?  Well, <strong>with the estate tax scheduled to return next year with a top tax rate of 55%, a failure to plan could result in that NFL franchise needing to be sold to raise money for taxes.</strong>  While this is a <u><em>failure to plan scenario</em></u>, but that isn't going to mollify the fans who already need to pay $160 a ticket if you are a Cowboys fan to see your team (thus demonstrating the incomprehensibleness of being a Cowboys fan in the first place to those of us in the northeast).</p> <p>Your business may not be on quite the scale as an NFL franchise (the <a href="http://www.forbes.com/lists/2010/30/football-valuations-10_Jacksonville-Jaguars_306892.html">Jaguars </a>as the least valuable franchise in the NFL still comes in at a healthy $725 million) but a failure to plan an exit strategy that includes an analysis of how estate taxes might effect your business could put your business out of the game for good.</p><img src="http://feeds.feedburner.com/~r/NewJerseyEstatePlanningElderLawBlog/~4/M0mq4QfLFPo" height="1" width="1"/>

Full post as published by New Jersey Estate & Elder Planning Blog on September 15, 2010 (boomark / email).