Zappos.com is the largest shoe retailer in the world. In 2009, Amazon acquired the company for $1.2 billion which made Zappos’ visionary founder Tony Hsieh very wealthy. The entrepreneur, who grew up in the Bay Area and spent 21 years building Zappos to become a widely successful brand, retired in 2020. Only three months later, he tragically died in a house fire at the age of 46. When he passed away, the value of his estate was estimated to be approximately $840 million.
Hsieh’s untimely death was even more devastating as he never created an estate plan to manage his vast fortune. This caused tremendous chaos and uncertainty for his family, friends, and business partners. Without a properly executed and functioning estate plan, his affairs would be subject to the intestate laws of Nevada, his state of residence.
Hsieh never married, nor had children. So, there was also the possibility that with no heirs, the state law would dictate that the State of Nevada claims his property. Fortunately, his parents were alive and he had siblings. Hsieh’s estate eventually passed to his parents, but the process was painful, expensive, time-consuming, and embarrassing. Others close to Hsieh, who believed he would have channeled some assets to them, were left empty handed.
Nearly his entire estate was likely subject to the onerous federal estate tax of 40%, which would be hundreds of millions of dollars, but with proper planning could have been mitigated.
Whether his lack of planning is due to his feeling of invincibility, fear, or general procrastination, we’ll never know. However, Hsieh would certainly have preferred to have a say in the disposition of his assets, instead of being subjected to intestate laws.
While the financial consequences of Hsieh’s poor planning were significant, his situation is not unique. More than half of adults in the United States don’t have Estate Planning. They do not have a Will, Trust or Powers of Attorney.
Most people do not have an estate value comparable to Tony Hsieh’s, however the effects of poor planning can be as devastating to your family should you fail to adequately prepare. Contact the lawyers at Chauvel & Glatt to put a plan in place.
This material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute legal advice. For information on your particular circumstances, please contact Chauvel & Glatt at 650-573-9500 for legal assistance near you. (photo credit: Depositphotos.com)
