Detroit Lions: What does the future hold?
Mrs. Ford to oversee Lions after husband's death
DETROIT – William Clay Ford Senior's widow was named the official owner of the Detroit Lions Monday. She joins at least three other widows who, on paper, oversee NFL franchises.
But what happens next? The late Lions owner said he wanted to keep the team in the family, but will the family be able to afford it when his widow passes away?
Though we are talking about amounts of money beyond the imagination of most families, the Fords face an issue common to many smaller family businesses: The hefty tax bill that comes when the owner of that closely-held business dies.
In this case it automatically passed via trust to Mrs. Ford, but upon her death it's not so simple.
When Washington Redskins owner Jack Kent Cooke passed away in 1999, his heirs were forced to sell their beloved team. They were sacked by inheritance taxes they couldn't afford.
"People die and leave some amount of wealth, large or small, sometimes it leads to smooth transition, sometimes it leads to family disputes," said estate planning attorney Steven Cole.
When Mrs. Ford passes away the taxman will be just as hungry. Forbes.com estimates the team's value at an even one billion dollars.
The tax on that asset is 40 percent, or $400 million.
Bill Ford and his sisters would face a bill of $100 million apiece, and it would cost even more if the franchise increases in value. But Congress tried to anticipate the threat to family-held businesses.
"They actually talk about a desire to create a mechanism so family businesses don't have to be sold for taxes," Cole said. "As a result there is a rule permitting a 14 year deferral to pay the taxes."
Other NFL owners have sold an interest in their teams to raise cash or taken a minority partner to raise money that can be used to pay taxes once they die.
Even though we don't know what plans the Ford's have in place, we do know that this is their third time dealing with major inheritance issues, and they can afford the best advisors money can buy.
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