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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

#31

Post by beaned »

Ferret7446 wrote: post #28
beaned wrote: post #26

Earlier quoted context omitted.

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…

Further, resources decay. Land is taxed, bananas rot, cars rust. If you purchase $1B of actual hard assets with $0 left, you will not be able to maintain the upkeep. They will be spoiled or sold by the next year.

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

#32

Post by wannacboatmovie »

wenc wrote: post #27
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

While the exact means of his death was in a fire on someone else's property, it was during this time the billionaire was indeed living in a shit-covered hovel:

> There was feces on the ground. Plants in his toilets. Broken glass, broken plates all over the ground. Rotten food under the bed. Rotten food on the walls... it was disgusting.

https://www.forbes.com/sites/angelauyeung/2023/04/23/wonder-...

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

#33

Post by yieldcrv »

dmoy wrote: post #24
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…

yep, and the charity’s underlying entity can be a corporation or a trust, which does confuse the general understanding of these things as the terms are often conflated

almost infinite permutations are possible

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

#34

Post by quickthrower2 »

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.

The difference is huge. In practice you get a different set of laws if you have more money. They are more favorable to you. You get to have your life saved. You get to influence politics, through lobbying and political campaign contributions. You get to avoid tax to a greater extent. You get to set up your kids to be rich too - they are default set up, no "American Dream" gauntlet for them to run. Etc. etc.

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

#35

Post by quickthrower2 »

beaned wrote: post #31
Ferret7446 wrote: post #28

Earlier quoted context omitted.

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…

Further, resources decay. Land is taxed, bananas rot, cars rust. If you purchase $1B of actual hard assets with $0 left, you will not be able to maintain the upkeep. They will be spoiled or sold by the next year.

Comments seem to be from a parallel universe.

You buy $1bn of commercial real estate you get $100m/y to maintain the upkeep in rent. You will be able to get line of credit to cover you for unexpected expense.

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

#36

Post by joebob42 »

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).

Thousands of times, surely? At least if we're talking Americans, very few people have total lifetime expenditure less than hundreds of thousands I'd think. 100k is 2k a year for 50 years, even a million is only 20k.

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

#37

Post by FreakLegion »

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).

I find it interesting to think about the mechanics.

1. Things have value.

2. People can own things, fractionally or entirely.

3. Owning a thing entails control of that thing.

So what does a world in which billionaires aren't allowed to exist look like? If the wealth is from creating a company, do we tax companies so progressively that it simply isn't possible for a billion-dollar company to exist in the first place? Do we take some fraction of the founder's company, and therefore their control over that company, away, e.g. with a wealth tax?

In principle I'm happy to ban billionaires, but I also don't love the idea of someone losing control of the company they created because other people decided it was too valuable. Asymptotically capping the growth of companies is appealing, but who knows what the second-order market effects might be (imagine if Apple had no incentive to scale to serve everyone who wants their products), and anyway one person can own multiple companies, so per-company limits by themselves won't put an end to billionaires.

The folks in mechanism design have to have done research in this area, but I'm not familiar with it.

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

#39

Post by beaned »

quickthrower2 wrote: post #35
beaned wrote: post #31

Earlier quoted context omitted.

Further, resources decay. Land is taxed, bananas rot, cars rust. If you purchase $1B of actual hard assets with $0 left, you will not be able to maintain the upkeep. They will be spoiled or sold by the next year.

Comments seem to be from a parallel universe. You buy $1bn of commercial real estate you get $100m/y to maintain the upkeep in rent. You will be able to get line of credit to cover you for unexpected expense.

Running a business requires continual effort, it's a different question than simply "owning resources."

You could do that of course. But then you probably don't actually own the resource directly. You probably own the company in the form of shares, similar to money, another tradable token.

You're certainly not using the real estate for yourself like the comment we were replying to was saying. Indeed, if it's being leased then it's probably being used entirely by others!

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