Are you (and your Estate Plan) Ready for Some (Bears) Football?
Over 60,000 Chicago Bears fans (and hopefully very few Packers fans) will converge on Soldier Field this Sunday to watch the Bears beat the Packers (the power of positive thinking, right?).
Around half of them will be there by virtue of a “Permanent Seat License” (PSL). A PSL is a device mainly used for selling season’s tickets for sporting events. Soldier Field/Bears use a PSL system (it helped finance building the stadium) — a one-time purchase for the annual right to buy specific seats (can be multiple seats on 1 PSL) for all (8 + playoffs) home games…for as long as the Bears call Soldier Field home.
The Bears long ago sold all of their PSL’s, but there is an active marketplace where you can buy or sell them. At the moment, there are 236 listings (664 seats) with prices ranging from $1,950/seat on the low-end to $250,000/seat on the high-end. Prices vary widely based on seat location, but the average seems to be in the $10,000-15,000 per seat range. So, if you have a PSL with 4 reasonably good seats, you might be able to sell that for $40,000-60,000. Needless to say, this is a valuable license — and if the Bears can consistently stop the run…
OK, Mr. Estate Planner: what does this have to do with my estate plan?
As noted, once a PSL is purchased, the license continues in perpetuity for as long as the Bears call Soldier Field home — and as long as the licensee annually uses the PSL rights to purchase season’s tickets (the failure to buy season’s tickets will cancel the license). It’s expressly understood that a licensee can transfer their PSL by sale or otherwise, and that the license can continue past the original licensee’s lifetime.
Great. But that begs obvious question: when a licensee dies, who succeeds to the license, and how?
We contacted the Bears recently to learn what their established procedures are. I was surprised to learn that while they had certainly considered and confronted this before, there didn’t seem to me to be a certain and clear procedure. The representative mentioned the possibility of a will and an appointed executor, but when asked about either a no will situation or an unprobated estate, it was unclear. Moreover, the prospect of probate control is not entirely satisfying if part of the estate plan involves the use of trusts to avoid probate. The delay and public aspects of probate could be problematic as well.
When asked about transferring the license to the trustee of a trust (to allow for clear terms of succession), the Bears rep advised us that:
“… we require that each season ticket account be maintained only in the name of a single natural person and not in the name of a trust. Our attorneys have advised us that changes in trustees and beneficial owners of trusts can occur at any time without our knowledge, resulting in the team possibly being unable to enforce the obligations of Season Ticket Holders and PSL owners for lack of correct ownership information.”
Understandable — but then what?
As an alternative, we suggested a “Transfer on Death Instructions” form, which in the proposed situation, instructs the Bears (actually the park district) to look to any single then acting trustee of the trust for instructions on the individual that will become the new licensee. The end result is that it allows the decedent’s appointed representative (the trustee — without probate court) to decide which beneficiary of the trust becomes the new licensee.
Certainly, this scenario generally could cause issues because the license can’t be divided — it must be held by an individual (although perhaps an agreement can be reached when multiple seats are involved). If potential conflict is anticipated, perhaps the trust might directly address how the decision is made. Or, the instructions form might directly designate the beneficiary (and contingent successors).
We were ultimately advised that the proposed instructions form was acceptable, and that it need not be lodged with the Bears prior to death.
While there doesn’t seem to be any one exclusive method for handling this dilemma, it’s certainly an issue that PSL holders should consider. It’s easy to see how the failure to consider succession could result either in the ultimate forfeit of the PSL back to the Bears (remember — the license has significant value on the marketplace and the seats have to be timely purchased annually) and/or divisive litigation among family as to how to handle the PSL. Thoughtful planning can allow for an efficient plan for desired succession to keep this unique asset in the family.
Image courtesy of Wikipedia Commons