“Moreover, incapacity is a near certainty for all people: there will be a period however brief, in which a person can no longer manage their own affairs, requiring help.”
I’d never thought of it this way, but it’s a thought provoking reality.
Insane! On the one hand this mistake is a rare case of the rich paying a lot of tax. But very odd not to have tried to avoid this by (whatever rich people do)
Estate tax only kicks in > $12M. But probate kicks in if your assets are > $170k! I don't support extensive tax trickery to get out of estate tax (unless you count giving it all to charity as tax hacking, which I definitely don't), but I have been converted to advise everyone with heirs and meaningful assets to set up a trust and work with an estate lawyer to make sure they can bypass probate when needed. Otherwise funds can be tied up for a lengthy period of time (and incur a lot of lawyer fees) even in simple cases.
In 2009, Hsieh sold Zappos to Amazon for $1.2 billion. Amazon inherited Hsieh's policy but put its own spin on it — the company offered full-time Amazon fulfillment center workers up to $5,000 to leave, per CNBC.
The policy, dubbed Pay to Quit, is designed to weed out the employees who decide they aren't happy at the company, subsequently improving workforce morale and productivity and ensuring that those who are employed are committed to their work.
> Instead of subjecting his gross estate to the federal estate tax, Hsieh could have set up a trust in which he has no control over, transfer his assets into it, then have a trustee continue to carry out his goals
Your estate is taxed before it goes into a normal trust. To avoid taxes with a trust you have to set it up a long time in advance and slowly shift money in. And at $1B, it's not gonna happen. Even if you use various tricks to put lower priced assets into the trust early and let them appreciate (or e.g. buy permanent life insurance with the trust assets), none of those strategies scale to O($billion)
GSTs used to be able to get around that, but not so much anymore.
A "real" way to avoid it is to put massive amounts into a charity (or occasionally a "charity"), and then have that charity hire your kids for cushy jobs. There are other ways around it too, hiding assets overseas or whatever.
But the article gives a very inaccurate description of using trusts to get around estate taxes. Which is ... weird, right? It's an estate planning attorney? I dunno.
Tony was wealthy but had substantial mental health challenges. It is not entirely unexpected his estate would be in limbo or exposed to suboptimal tax treatment due to no estate planning.
Arguing about this is nipping at the margins. Capture is monotone increasing. The donor class needs their teeth kicked in from time to time (Magna Carta, tennis court, countless).
Trying to unfuck estate law is a tourniquet.
We don’t need to curb-stomp the donor class to make them “pay their fair share”, we need to wreck their shit to make the incumbents powerless.
Human nature has a bad memory leak. You have to restart the process sometimes.
If we don’t find a peaceful way to do it, nature will find a violent way to do it.
obblekk|2 years ago
I’d never thought of it this way, but it’s a thought provoking reality.
quickthrower2|2 years ago
Insane! On the one hand this mistake is a rare case of the rich paying a lot of tax. But very odd not to have tried to avoid this by (whatever rich people do)
neilv|2 years ago
In a better world, people would just laugh at anyone who tried to claim this (or, better yet, try to help them with their mental/social problem).
giancarlostoro|2 years ago
zetazzed|2 years ago
Scoundreller|2 years ago
It's sad that I wasn't 100% immediately sure this was a typo, but I'm pretty sure it is.
defrost|2 years ago
oldbbsnickname|2 years ago
unknown|2 years ago
[deleted]
ploden|2 years ago
The real outrage is that this is legal.
dmoy|2 years ago
As stated it's not exactly accurate.
Your estate is taxed before it goes into a normal trust. To avoid taxes with a trust you have to set it up a long time in advance and slowly shift money in. And at $1B, it's not gonna happen. Even if you use various tricks to put lower priced assets into the trust early and let them appreciate (or e.g. buy permanent life insurance with the trust assets), none of those strategies scale to O($billion)
GSTs used to be able to get around that, but not so much anymore.
A "real" way to avoid it is to put massive amounts into a charity (or occasionally a "charity"), and then have that charity hire your kids for cushy jobs. There are other ways around it too, hiding assets overseas or whatever.
But the article gives a very inaccurate description of using trusts to get around estate taxes. Which is ... weird, right? It's an estate planning attorney? I dunno.
unknown|2 years ago
[deleted]
yieldcrv|2 years ago
wannacboatmovie|2 years ago
[deleted]
toomuchtodo|2 years ago
https://news.ycombinator.com/item?id=25235490
https://news.ycombinator.com/item?id=25326510
https://news.ycombinator.com/item?id=25305202
https://news.ycombinator.com/item?id=35682523
wenc|2 years ago
No. He died in a house fire at someone's house that he was visiting.
https://en.wikipedia.org/wiki/Tony_Hsieh#Death
benreesman|2 years ago
Trying to unfuck estate law is a tourniquet.
We don’t need to curb-stomp the donor class to make them “pay their fair share”, we need to wreck their shit to make the incumbents powerless.
Human nature has a bad memory leak. You have to restart the process sometimes.
If we don’t find a peaceful way to do it, nature will find a violent way to do it.
benreesman|2 years ago
From today’s front page: https://www.politico.com/news/2023/10/13/open-philanthropy-f....
Anyone have any thoughts on this other than “feels bad man”?