The Importance of Estate Planning
William M. Davidson, most notably, owner of the Detroit Pistons died in 2009 at age 86. His estate was estimated to be $5.5 Billion. The IRS issued an estate tax bill for $2.8 Billion which forced William’s surviving family to sell Palace Sports and Entertainment (including the basketball team and their stadium).
What went wrong? The family needed cash fast to cover the estate tax bill and sold Palace Sports and Entertainment for $325 Million, about $100 Million under value. A trust with tax advantages and a life insurance policy to create immediate tax free liquidity would have preserved a much larger portion of this massive estate to the family, and might even have kept the Detroit Pistons in the family for many more generations.
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IFC is a state Registered Investment Advisors. Past performance is no guaranty of future results. This is not a solicitation for the sale of securities nor is it direct investment advice.