Do Not Try to Be George Steinbrenner
George Steinbrenner died in 2010 during a rare one-year lapse in the federal estate tax. Because of that timing alone, estate planning experts estimate his heirs avoided somewhere more than $300 million in federal estate taxes.
It makes for a remarkable headline, but it is a terrible plan.
For families whose net worth approaches or exceeds the estate tax exemption, Steinbrenner’s story is misread as a quiet victory. In reality, it was a legislative accident. Estate outcomes should never rely on luck, political windows, or perfect timing. They should be designed to succeed regardless of circumstances.
Once an individual or family’s net worth exceeds the exemption, assets above that threshold can face a federal estate tax of 40 percent. Without proper planning, heirs may be forced to sell businesses, real estate, or long-held investments not because it is wise, but because cash is needed. This is how legacies erode, not through poor intentions, but through preventable math.
This reality explains why many of the world’s most successful founders and executives plan early and deliberately. Jamie Dimon, Mark Zuckerberg, and members of the Walton family all made extensive use of legal strategies to shift future appreciation out of their estates. Their success was not driven by clever loopholes or secrecy. It was driven by alignment between assets, timing, and structure.
One commonly used strategy is the Grantor Retained Annuity Trust, or GRAT. At a high level, a GRAT allows an individual to transfer assets into a trust while retaining annuity payments for a defined time frame. Those payments are calculated using an IRS mandated interest rate. If the assets inside the trust grow faster than that rate, the excess appreciation passes to heirs with little or no estate tax. If the assets underperform, the grantor largely receives the value back through the annuity stream.
GRATs are not about beating the system. They are about recognizing that future growth can be planned for, rather than left exposed. They work best when applied to assets with strong long-term growth potential and when implemented as part of a broader, coordinated estate plan.
For some families, however, the question shifts at this stage. Instead of asking how much they can pass on, they ask what they want their wealth to do while they are still alive.
That is where Charitable Lead Annuity Trusts, or CLATs, come into the conversation. A CLAT is similar to a GRAT, but with a different ordering of priorities. Assets are transferred into a trust that makes fixed payments to charitable organizations for a set time frame. When that term ends, whatever remains passes to heirs, with little or no estate tax.
CLATs are often used by families who are financially secure and want to formalize charitable giving rather than rely on at-will donations. Education, healthcare, faith-based organizations, and community institutions become part of the structure itself.
The distinction between GRATs and CLATs is not about right versus wrong. It is about values. Some families prioritize inheritance and asset continuity. Others prioritize philanthropy and stewardship. Many blend both. What they share is intentionality.
And this is where contrast becomes instructive.
James Gandolfini, known for his role as Tony Soprano in the critically acclaimed television series The Sopranos, passed away unexpectedly from a heart attack at age 51. At his death, he had accumulated an estate estimated at approximately $70 million and left behind a valid will to govern its distribution.
However, the structure of that plan created a costly and avoidable outcome.
Gandolfini left only about 20 percent of his estate outright to his spouse, with the remainder directed to other beneficiaries. Assets passing to a surviving spouse generally qualify for the unlimited marital deduction while assets passing elsewhere do not. This allocation exposed a significant portion of the estate to immediate federal and state estate taxes.
The result was severe. The estate reportedly incurred a tax bill of roughly $30 million, reducing the net value available to his family to closer to $40 million. Instead of dividing a $70 million estate, Gandolfini’s beneficiaries were forced to share what remained after nearly half of his wealth was transferred to the IRS.
Don’t try to be George Steinbrenner because you’re more likely to end up like James Gandolfini. Be thoughtful and intentional about your estate plan regardless of the size.
Joe Olive, CFP®, MPS, is a 10-year Air Force veteran who works as a CERTIFIED FINANCIAL PLANNER® with Sather Financial Group, a fee-only strategic planning and investment management firm. He holds a master’s degree from Columbia University.
