Tony Hsieh passed away on November 27th due to complications from burns and smoke inhalation after he was exposed to a house fire in New London, Connecticut. He was a resident of Las Vegas, and he was visiting a friend at the time.
He lived a full life and he enjoyed a great deal of success at an early age. After graduating from Harvard, he cofounded an Internet marketing company called LinkExchange. This was in 1996, and in 1998, the partners sold the company to Microsoft for $265 million.
Hsieh went on to become the co-founder of Venture Frogs, an incubator and investment firm, and one of their first investments was in the company that went on to be called Zappos.
The online shoe store was actually the brainchild of a young entrepreneur named Nick Swinmurn, but Hsieh became the CEO of the company shortly after the investment was made.
Zappos grew by leaps and bounds over the next several years, and Swinmurn moved on in 2006. Two years later, Amazon acquired Zappos for the princely sum of $1.2 billion.
Tony Hsieh retained his role as CEO for the next 12 years, and he retired on August 24th of 2020, just three months before he passed away in the tragic fire.
Hsieh Died Intestate
Hsieh was never married, and he did not have any children. His surviving relatives are his parents and his two brothers. Hsieh’s father and his older brother have asked the court to be given the right to act as the estate administrators.
According to the family, he died without a will or any other estate planning documents to direct the transfer of his assets. He was a resident of Nevada, so the estate will eventually be distributed under the intestate succession laws of that state.
Since he did not have a spouse or children, his parents will be the inheritors according to the Nevada intestacy laws.
Estate Tax Implications
There is a federal estate tax in the United States that can take a hefty bite out of your estate if you are exposed, because it carries a 40 percent top rate. The majority of people don’t have to worry about the tax, because there is a credit or exclusion that is high by most standards.
In 2020 when Tony Hsieh passed away, the exclusion was $11.48 million. That’s a lot of money, but according to Forbes, his net worth was $840 million, so that leaves $828.52 million exposed.
If he would have taken the time to plan his estate in advance, he could have implemented a comprehensive estate tax efficiency strategy. Assuming his family members are correct and he had no estate plan, the outcome will be less than ideal.
This is one huge issue, but there is also the simple matter of his personal wishes. There is no reason to believe he would not have taken good care of his parents, but someone with that kind of money would probably want to spread the wealth a bit.
Intestacy Is Not an Option for Anyone
Clearly, very few people are in this financial stratosphere, but estate planning is important for everyone. There are many different ways to proceed, and the right course of action will depend on the circumstances.
Your estate plan should be custom crafted to provide for your loved ones in the optimal manner.
If you work with our firm, we will gain an understanding of your family dynamic and your objectives and explain your options. When you decide to go forward, we will apply our expertise to develop a plan that ideally suits your needs.
You can set the wheels in motion if you give us a call at 513-721-1513, and if you would rather send us a message, fill out our contact form and we will get back in touch with you promptly.