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What Happens When Tony Hsieh Dies with $1B, with No Estate Planning

williamhalaw.com

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Re: What Happens When Tony Hsieh Dies with $1B, with No Estate Planning

#21

Post by kristjansson »

giancarlostoro wrote: post #3
quickthrower2 wrote: post #2

> $391,232,000 goes to the IRS. 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)

I think we underestimate just how much the hyper rich pay in taxes overall.

Forty percent of federal income receipts come from the first income percentile. We could try to get more from the first 1/10th or 1/100th percentile, but 'income' becomes a nebulous concept. Did Bill or Sam really ever really have any income?

Re: What Happens When Tony Hsieh Dies with $1B, with No Estate Planning

#22

Post by KptMarchewa »

giancarlostoro wrote: post #3
quickthrower2 wrote: post #2

> $391,232,000 goes to the IRS. 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)

I think we underestimate just how much the hyper rich pay in taxes overall.

The point is that most don't. There's easy way to avoid paying this tax, outlined in the article.

Re: What Happens When Tony Hsieh Dies with $1B, with No Estate Planning

#23

Post by benreesman »

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.

Re: What Happens When Tony Hsieh Dies with $1B, with No Estate Planning

#24

Post by dmoy »

ploden wrote: post #11

> 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 The real outrage is that this is legal.

> The real outrage is that this is legal

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.

Re: What Happens When Tony Hsieh Dies with $1B, with No Estate Planning

#25

Post by benreesman »

benreesman wrote: post #23

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 res…

I knew I was going to get a beating.

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”?

Re: What Happens When Tony Hsieh Dies with $1B, with No Estate Planning

#26

Post by beaned »

neilv wrote: post #17
quickthrower2 wrote: post #2

> $391,232,000 goes to the IRS. 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)

What's insane is that one person can personally own billions of times more of the resources than other people do. 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).

They don't actually own the resources, that'd be untenable for any individual or even large family. They own a token that represents a claim to resources, and realistically they can only use so much for themselves.

The difference in actual material wealth between the rich and the poor isn't that excessive today. Beyond a certain threshold you're only buying novelty. And the gap is shrinking every year.

Re: What Happens When Tony Hsieh Dies with $1B, with No Estate Planning

#27

Post by wenc »

wannacboatmovie wrote: post #5

[flagged]

> Wasn't he the one that died while living in a giant mansion covered in dog shit like something from a Hoarders episode?

No. He died in a house fire at someone's house that he was visiting.

https://en.wikipedia.org/wiki/Tony_Hsieh#Death

Re: What Happens When Tony Hsieh Dies with $1B, with No Estate Planning

#28

Post by Ferret7446 »

beaned wrote: post #26
neilv wrote: post #17

Earlier quoted context omitted.

What's insane is that one person can personally own billions of times more of the resources than other people do. 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).

They don't actually own the resources, that'd be untenable for any individual or even large family. They own a token that represents a claim to resources, and realistically they can only use so much for themselves. The difference in actual material wealth between the rich and the poor isn't that excessive today. Beyond a certain threshold you're only buying novelty. And the gap is shrinking every year.

Crucially, when they spend the money, it goes to someone else. Either they do nothing with it and the money is effectively scrap, or they spend the money for $1B in resource and give others the money which they can claim for $1B in resources.

Edit: money kind of represents a debt society owes to the individual. By owning the most money, it actually means that society is most indebted to them, or that they have loaned that many resources/value to society which has not yet been paid back, ironically enough.

Re: What Happens When Tony Hsieh Dies with $1B, with No Estate Planning

#29

Post by oooyay »

wannacboatmovie wrote: post #14
toomuchtodo wrote: post #8

Earlier quoted context omitted.

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. 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

You would think with that amount of money you could get help. Instead, he was taken advantage of by his hangers-on/ballwashers that were only after his money.

I don't think these things are exclusive to each other. Someone who is struggling mentally can be very successful in their career and can have a sea of people ready to reap the rewards of their success. That kind of behavior can absolutely manifest in the person spiraling or spiraling further.

Re: What Happens When Tony Hsieh Dies with $1B, with No Estate Planning

#30

Post by Scoundreller »

defrost wrote: post #15
Scoundreller wrote: post #4

> He gave people money to quit at the end of employee orientation if they didn’t believe they would be a bad fit It's sad that I wasn't 100% immediately sure this was a typo, but I'm pretty sure it is.

It's fleshed out more in the link: 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…

I know, but there's probably some "thinker" out there that believes it's a good idea to select for the misfits that think they don't belong and pay the really gung-ho ones to leave.
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