While some might think family-owned sports teams are more plagued than Boston was by the 86-year “Curse of the Bambino,” I encourage you to look past curses to investigate causes. Identify potential estate and financial planning challenges your business might face, and deal with them. You’ll have better odds your family ends up on the winning side.
What can we learn from sports teams when it comes to passing on the family business? As it turns out, there are several good and bad examples of business succession in the sports world.
Recently, we have seen the forced sale of the Los Angeles Clippers because the owner's racist rant came to light. The Los Angeles Dodgers were recently sold in part because of the bitter and protracted divorce of its owners. Now, the owner of the New Orleans Saints is in a competency dispute with his family that could force the sale of the team.
In recent memory, both the Chicago Cubs and Miami Dolphins have been sold because the owner passed away without properly planning for how estate taxes would be paid.
Forbes has more on these situations in an article titled "Another Family Sports Team Failure, Another Lesson Learned."
The article also includes lessons to be learned from sports teams for other family businesses, which include:
- Poor planning outside of the business can cause the business to fail. This is especially true if the failure to plan for estate taxes causes the sale of the business.
- Family businesses can thrive with good planning. Both the New York Yankees and Pittsburgh Steelers have recently survived as family owned businesses after the owner passed away.
- No matter how much planning you do, bad things can still happen. The key thing is to plan well enough that the damage from any issues is contained.
Without question, one of the wisest moves you can make is to work with an experienced estate planning attorney. He or she has “been there and done that,” when it comes to the successful transfer of the business and preservation of family relationships in the process.
Do you have a family business that you want to pass on someday? To ensure that your business will continue to thrive, contact Heritage to meet with one of our estate planning attorneys.
Reference: Forbes (February 16, 2015) "Another Family Sports Team Failure, Another Lesson Learned."