6 ms·

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

wannacboatmovie 3y ago
[flagged]
- toomuchtodo 3y ago
  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=25235490 https://news.ycombinator.com/item?id=25326510 https://news.ycombinator.com/item?id=25326510 https://news.ycombinator.com/item?id=25305202 https://news.ycombinator.com/item?id=25305202 https://news.ycombinator.com/item?id=35682523 https://news.ycombinator.com/item?id=35682523
  - wannacboatmovie 3y ago
    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.
    - toomuchtodo 3y ago
      Wealth and ability to seek help are mutually exclusive. For sure, you have access. But you have to want it, even if some are desperate to help you and others are desperate to extract from you while you remain in poor health. Maybe someone could’ve advocated for a conservatorship, but we’ll never know why someone didn’t. (have had friends and loved ones addicted to alcohol, cocaine, heroin, etc)
    - oooyay 3y ago
      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.
- wenc 3y ago
  > 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 https://en.wikipedia.org/wiki/Tony_Hsieh#Death
  - wannacboatmovie 3y ago
    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-boy-book-excerpt-tony-hsieh-final-days/ https://www.forbes.com/sites/angelauyeung/2023/04/23/wonder-...
quickthrower2 3y ago
> $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)
- giancarlostoro 3y ago
  I think we underestimate just how much the hyper rich pay in taxes overall.
  - Scoundreller 3y ago
    It depends. If you donate enough of your unrealized capital gains, you can cancel out all of your tax owing on what you do cashout and get your name behind whatever causes you want (as long as it counts as charity or politics). At least that's how it can work out in Canada.
    - chubs 3y ago
      Wow that really incentivises pro-wealthy-folks lobbying!
    - defrost 3y ago
      The donations to charitable foundations route is ripe with loopholes that make it attractive ... the charitable foundation can be one that yourself (and a few others who share a tax lawyer) control, an astonishing low proportion of "donated money" can actually flow to the claimed charitable end, and a remarkable percentage of that money can indirectly benefit the people who donate.
  - KptMarchewa 3y ago
    The point is that most don't. There's easy way to avoid paying this tax, outlined in the article.
  - kristjansson 3y ago
    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?
Scoundreller 3y ago
> 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.
- defrost 3y ago
  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 and ensuring that those who are employed are committed to their work.
  - Scoundreller 3y ago
    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.
deleted 3y ago
[deleted]
ploden 3y ago
> 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.
- yieldcrv 3y ago
  the estate tax? “why aren't we getting scammed equally” is a pitiful argument
  - morkalork 3y ago
    From society comes one's wealth, and back into society it shall go.
- deleted 3y ago
  [deleted]
- dmoy 3y ago
  > 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.
  - yieldcrv 3y ago
    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
obblekk 3y ago
“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.
zetazzed 3y ago
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.
benreesman 3y ago
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.
- benreesman 3y ago
  I knew I was going to get a beating. From today’s front page: https://www.politico.com/news/2023/10/13/open-philanthropy-funding-ai-policy-00121362 https://www.politico.com/news/2023/10/13/open-philanthropy-f.... Anyone have any thoughts on this other than “feels bad man”?
oldbbsnickname 3y ago
PSA: Everyone do their family a favor: Setup a preneed. Prepay and pre-arrange your final costs and wishes. Headstones can also be custom designed.

[flagged]

toomuchtodo 3y ago
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=25235490 https://news.ycombinator.com/item?id=25326510 https://news.ycombinator.com/item?id=25326510 https://news.ycombinator.com/item?id=25305202 https://news.ycombinator.com/item?id=25305202 https://news.ycombinator.com/item?id=35682523 https://news.ycombinator.com/item?id=35682523
- wannacboatmovie 3y ago
  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.
  - toomuchtodo 3y ago
    Wealth and ability to seek help are mutually exclusive. For sure, you have access. But you have to want it, even if some are desperate to help you and others are desperate to extract from you while you remain in poor health. Maybe someone could’ve advocated for a conservatorship, but we’ll never know why someone didn’t. (have had friends and loved ones addicted to alcohol, cocaine, heroin, etc)
  - oooyay 3y ago
    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.
wenc 3y ago
> 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 https://en.wikipedia.org/wiki/Tony_Hsieh#Death
- wannacboatmovie 3y ago
  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-boy-book-excerpt-tony-hsieh-final-days/ https://www.forbes.com/sites/angelauyeung/2023/04/23/wonder-...

> $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)

giancarlostoro 3y ago
I think we underestimate just how much the hyper rich pay in taxes overall.
- Scoundreller 3y ago
  It depends. If you donate enough of your unrealized capital gains, you can cancel out all of your tax owing on what you do cashout and get your name behind whatever causes you want (as long as it counts as charity or politics). At least that's how it can work out in Canada.
  - chubs 3y ago
    Wow that really incentivises pro-wealthy-folks lobbying!
  - defrost 3y ago
    The donations to charitable foundations route is ripe with loopholes that make it attractive ... the charitable foundation can be one that yourself (and a few others who share a tax lawyer) control, an astonishing low proportion of "donated money" can actually flow to the claimed charitable end, and a remarkable percentage of that money can indirectly benefit the people who donate.
- KptMarchewa 3y ago
  The point is that most don't. There's easy way to avoid paying this tax, outlined in the article.
- kristjansson 3y ago
  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?

Scoundreller 3y ago

> 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.

defrost 3y ago
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 and ensuring that those who are employed are committed to their work.
- Scoundreller 3y ago
  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.

deleted 3y ago

[deleted]

ploden 3y ago

> 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.

yieldcrv 3y ago
the estate tax? “why aren't we getting scammed equally” is a pitiful argument
- morkalork 3y ago
  From society comes one's wealth, and back into society it shall go.
deleted 3y ago
[deleted]
dmoy 3y ago
> 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.
- yieldcrv 3y ago
  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

obblekk 3y ago

“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.

zetazzed 3y ago

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.

benreesman 3y ago

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.

benreesman 3y ago
I knew I was going to get a beating. From today’s front page: https://www.politico.com/news/2023/10/13/open-philanthropy-funding-ai-policy-00121362 https://www.politico.com/news/2023/10/13/open-philanthropy-f.... Anyone have any thoughts on this other than “feels bad man”?

oldbbsnickname 3y ago

PSA: Everyone do their family a favor: Setup a preneed. Prepay and pre-arrange your final costs and wishes. Headstones can also be custom designed.