Any good Denver Broncos fan is aware of the dispute over the trust put in place by Pat Bowlen before he stepped down from his role as team owner due to a diagnosis of Alzheimer’s. Since that time, lawsuits, complaints, and rumors have dominated the conversation about the team’s future (off the field.) With such a high-profile case involving a trust, it would be remiss of us not to take away some lessons from the whole affair. So what does the Broncos ownership dispute teach us about estate planning?
Estate Planning Works
Mr. Bowlen designed a plan that kept ownership of the team in his family and provided a blueprint for the succession. Without a plan, he could not have placed the team in a trust. If he were to pass away, state law would distribute half the team to his spouse, Annabel, and the remaining 50% would be divided equally in shares between his seven kids. If Annabel also passed away and gave her share to her 5 kids, that would provide the youngest five with enough of a percentage to qualify them as owners, while the eldest two children would only be stakeholders. The youngest five would then have to agree amongst themselves on all team decisions, a set up that is rife for conflict, as we and others have found is all too common.
Estate Planning Communicates Your Values
Mr. Bowlen specified that the child who would take over must have a degree in business and have spent at least five years in a senior management position in a related capacity. While these are not the only requirements, they show that he wants the person who takes over to not only be qualified, but also intimately involved, and connected with, the team. For him, ownership of the Broncos is more than a lucrative asset – it is a responsibility that requires preparation and commitment. “He made it clear that his children were not automatically entitled to a role with the team and that they would have to earn that opportunity through their accomplishments, qualifications and character.”
Estate Planning Relies on People
The three trustees of the Broncos trust all worked closely with Mr. Bowlen before he stepped away for health reasons. They have run the team since 2014 and have issued multiple statements that indicate their intention to follow Mr. Bowlen’s wishes in regard to the team and its succession plan. While Beth Bowlen Wallace, the second of his seven children, has already announced her intention to claim the position of controlling owner, the trustees claim she has not met the minimum requirements set out by Mr. Bowlen in the trust. They have therefore declined to turn over ownership to his descendants, while ensuring that their management of the team complies with his wishes and all applicable NFL standards. Stated NFL commissioner Robert Goodell, “They are in compliance with our rules. They have been very thoughtful. They have done a terrific job of leading that franchise over the last several years as Pat has focused on his health issues, and I think Pat put that in place because of the care and the focus and the importance of the Broncos to him and making sure that it continued to be in the right hands and with the right kind of leadership.”
Estate Planning Protects Against (but doesn’t prevent) Ending up in Court
In November, Mr. Bowlen’s brother Bill filed a court motion requesting the removal of the three trustees, claiming that they are unduly preventing Mr. Bowlen’s children from taking ownership of the team. The trustees have responded with a request for an arbiter from the NFL, which would avoid having the conflict take place in a public court. Whether or not this is what the people of Colorado would prefer, it is within their rights as trustees to attempt to keep the language of the trust out of the public eye. In fact, the children have not even seen the trust in its entirety, and have had to rely on information passed to them from the trustees. An arbitration clause is likely part of the estate plan Mr. Bowlen put together before he died, and will ensure that the decision of whether to remove or retain their position is not subject to the rule of an outsider.
It might appear that the high profile conflict taking place between the trustees and Mr. Bowlen’s family is exactly what he hoped to prevent by creating an estate plan. Isn’t the whole point of a trust to avoid a messy family feud?
Yes, but there are no guarantees. The unpleasant truth is that anyone can always file a lawsuit. Anyone can disagree, even close-knit family members. The trust is not designed to protect the family from discord – it is designed to protect the assets from being mis-appropriated. Pat Bowlen wants the Broncos to stay in the hands of his family, and be run well. Someone qualified needs to be in charge to ensure that both those things happen.
Is it time to review or update your estate plan?
If you think it might be time to think through your estate plan, you can:
- If you live in Colorado and would like to speak with a Denver estate planning attorney about protecting you and your family, minimizing hassle, lowering the chance of family discord, and minimizing or eliminating taxes, give us a call at 303-578-2745 to schedule a “Discovery Session” at which we can determine whether our firm would be a good fit for your needs. Or fill out our contact form to have us call you.
- Get a copy of our estate planning checklist to see where you currently stand.
- Learn more by attending one of our free webinars, reading our blog, or watching our videos.