Tom Benson, the 87 year old owner of the New Orleans Saints and New Orleans Pelicans, recently announced changes to his succession plan. For years, his granddaughter, Rita LeBlanc, was designated as the future owner of the teams. Benson has since changed his mind and declared that his 3rd wife, Gayle Benson, whom he married ten years ago will run the teams in the future. He also sent a letter to his granddaughter, grandson, and daughter stating that he no longer wishes to see them or communicate with them. He also banned them from attending Saints and Pelicans games because of the way they allegedly treated his new wife (and now future owner of the teams). Of course, the three of them have filed suit seeking to have him declared incompetent.
1. Purely from an estate tax viewpoint, leaving the teams to his wife makes sense because as his spouse she will not have to pay estate taxes on the bequests until her death. The bequest to the granddaughter would have been subject to both a 40% estate tax and additional 40% generation skipping tax rate for a combined transfer tax bill of $640 million due to the billion dollar Saints alone. The granddaughter likely would have had to sell the teams to pay this bill.
2. Although the change in succession plan can easily be justified for death tax reasons alone, a note telling family members to never visit him again and forbidding them from attending sporting events is extreme and was guaranteed to provoke a lawsuit from the family members.
3. As a practical matter, all children, not just those of billionaire NFL owners, should bend over backwards to accommodate an elderly parent’s new spouse lest they find themselves as disinherited “po boys” or “po girls.”