What the Seattle Seahawks Sale Teaches Every Business Owner About Trust Planning
A $7 billion franchise, a trust without a deadline, a disputed $5 million NFL fine, and a 1997 Washington state law that shaped it all: the Seahawks situation is a real-world masterclass in the risks of holding a closely held business inside a trust.
The Setup: How an NFL Franchise Ended Up in a Trust
When Microsoft co-founder Paul Allen died in October 2018 from complications of non-Hodgkin’s lymphoma, he left behind one of the most iconic sports franchises in the country. The Seattle Seahawks—a two-time Super Bowl representative and perennial NFC contender—became an asset of the Paul G. Allen Trust, with his sister Jody Allen named as both personal representative of the estate and trustee. The trust documents were clear on one point: the assets, including the Seahawks, were to be sold eventually. But critically, no specific timeline was established for when that sale had to occur.
Fast-forward to early 2026. As of recent reporting, the Seahawks are widely viewed as a top contender, and the franchise is expected to sell for somewhere between $7 and $8 billion. The Wall Street Journal and ESPN reported that the NFL had fined (or considered fining) the team roughly $5 million in connection with alleged noncompliance with certain ownership rules; both the league and the Allen estate publicly disputed that a fine had been issued. Regardless of the fine’s status, the reporting underscores a simple point: when an outside regulator controls who may be the “owner,” trust ownership can create real friction at exactly the wrong time.
For estate planning attorneys and our clients, this situation is not just sports news. It is a front-page illustration of what can go wrong when a trust holds a business that is subject to external regulatory control and why thoughtful planning around business succession inside a trust matters enormously.
The NFL Ownership Rule: Businesses Don’t Always Welcome Trust Ownership
The core legal problem in the Seahawks situation stems from a set of NFL ownership rules that are common in regulated or closely controlled industries: teams must have a designated controlling owner (a natural person) who holds at least a 30% ownership stake, rather than control resting in an entity such as a trust, LLC, or corporation.
This rule is not unusual in the world of closely held businesses and regulated industries. Many types of business ownership arrangements come with restrictions on who or what can hold a controlling interest:
- Professional licenses (medical practices, law firms, accounting firms) often restrict ownership to licensed individuals
- Financial services licenses and broker-dealer registrations may require individual principal ownership
- Gaming licenses and liquor licenses frequently require background-checked individuals, not anonymous entities, to hold controlling stakes
- Franchise agreements from commercial franchisors routinely require a named individual guarantor or controlling owner
- Partnership agreements, shareholder agreements, and operating agreements often contain restrictions on transferring interests to trusts
When a client places a business interest into a revocable living trust, it is essential to review any governing documents, licenses, or contractual arrangements that may restrict trust ownership. A trust that cannot legally hold the asset your client just transferred into it is worse than useless; it creates a compliance problem that may force a fire-sale exit at exactly the wrong moment. Trust ownership is often perfectly workable; the key is confirming (in advance) that the relevant regulators and governing documents treat trustee ownership as acceptable.
Practical Takeaway: Before funding a business interest into a trust, your estate planning attorney should review partnership agreements, operating agreements, franchise agreements, and applicable professional licensing rules to confirm that trust ownership is permitted, and if not, whether an individual trustee acting in a fiduciary capacity satisfies the requirement.
The 1997 Washington Stadium Law: A State Tax Provision That Reshaped the Timeline
One of the most underreported elements of the Seahawks’ story is why the Allen estate was able to delay for so long before the NFL finally ran out of patience. The answer lies in a remarkably specific piece of 1997 Washington state legislation that funded the construction of what is now Lumen Field.
That law included a clawback provision: if the Seahawks were sold within a certain period after the stadium was publicly financed, the State of Washington would receive 10% of the proceeds. The exact amount at stake on a multi-billion-dollar franchise would have been staggering—potentially hundreds of millions of dollars flowing to the state rather than to the beneficiaries of Paul Allen’s estate.
That provision expired in May 2024. And it was only after that expiration, and removing the state’s financial claim on the sale proceeds, that the NFL meaningfully escalated pressure on Jody Allen to proceed with a sale. The NFL’s extended grace period, according to reporting, was at least partially attributable to the recognition that a premature sale would have triggered this tax consequence.
This is a striking example of how state law tax provisions can serve as de facto restraints on the alienation of trust assets, even when the trust instrument itself is silent on timing. The practical lesson for business owners is that exit timing can be influenced not just by what you want, but by tax provisions you may have agreed to years or decades earlier in connection with government incentives, stadium deals, economic development agreements, or similar arrangements.
Practical Takeaway: If a business benefited from tax incentives, government grants, or public financing with recapture provisions, those provisions must be identified and analyzed before designing a trust-based succession plan. They may affect the ideal sale window, the trustee’s discretion, and the overall tax cost of a sale.
Washington State Estate Taxes: A Uniquely Expensive Jurisdiction
The Seahawks situation draws attention to Washington state’s estate tax structure, which is among the most aggressive in the country and directly relevant to any high-net-worth estate in that jurisdiction.
Washington’s Estate Tax in 2026
Washington is one of only a handful of states that imposes its own estate tax, entirely separate from the federal estate tax. As of 2026, the Washington estate tax exemption is $3,076,000 per individual, recently increased from $2,193,000 under legislation signed in 2025. The exemption is now indexed for inflation annually based on the Seattle-area Consumer Price Index.
Unlike the federal estate tax, Washington’s exemption is not portable between spouses. A married couple cannot automatically double their exemption the way they can at the federal level. Without proper planning—including the use of credit shelter trusts or disclaimer trusts—a married couple in Washington may lose one spouse’s exemption entirely, resulting in avoidable estate taxes on the first death.
Washington’s estate tax rates range from 10% to 35%, with the top rate applying to estates over $9 million. This is a significant increase from the prior top rate of 20%. For large estates, Washington estate tax is assessed in addition to federal estate tax, though state estate taxes paid can be deducted on the federal return.
How Washington Compares to Georgia
Georgia does not impose a state estate tax or inheritance tax, which is a meaningful planning advantage for clients with significant assets. However, Georgia clients who own real property or business interests in Washington, or who consider relocating to Washington, need to understand that Washington’s tax reach extends to real estate and tangible property located within the state, regardless of where the owner resides.
For clients in states without an estate tax, the more common issue is the federal estate tax threshold, which increased to $15 million per individual in 2026 following the passage of the One Big Beautiful Bill. Married couples with proper planning can now shelter up to $30 million at the federal level, a significant change from prior law.
Practical Takeaway: Clients with multi-state asset footprints should map out which states impose estate taxes on assets located there. Washington is a particularly high-risk state for real estate owners, business owners with Washington operations, and any family with interests in Washington-based companies, including, potentially, minority stakes in sports franchises.
Trustee Fiduciary Duties and the Risk of Delayed Sales
The Washington Journal of Law, Technology & Arts published a thoughtful legal analysis of the Jody Allen situation just before Super Bowl LX, and it raises an important point that deserves attention from any estate planning practitioner: under Washington’s Revised Code, a trustee’s fiduciary duties include administering the trust solely in the interests of the beneficiaries, managing assets prudently, and avoiding self-dealing.
The analysis concluded that, as of the date of publication, there was no indication that Jody Allen or the Paul G. Allen Trust was under any immediate legal obligation under Washington state law to sell the Seahawks. If a sale occurs, it is more likely driven by the contractual obligations to the NFL than by anything required under state trust law. This is because the trust instrument did not set a specific sale deadline, and it is not unusual for complex estates to take many years, sometimes a decade or more, to fully administer.
But there is a scenario where a trustee could face serious personal liability. If rumors prove true that Jody Allen or her affiliates are exploring purchasing the franchise from the trust themselves, that transaction would raise significant self-dealing concerns. Under Washington’s trust code, a trustee is prohibited from entering into transactions where the trustee’s fiduciary duties and personal interests conflict. Buying trust assets for one’s own benefit is the paradigmatic example of prohibited self-dealing. Washington courts have upheld challenges to exactly this type of transaction.
Three exceptions exist under Washington law: the trust instrument expressly authorizes the transaction, the beneficiaries consent after full disclosure, or a court approves the sale. Without one of these, a trustee who purchases trust assets at below-market value, or even at fair market value, may face personal liability and disgorgement of any profits.
Practical Takeaway: When drafting trusts that will hold business interests, consider whether to expressly permit or prohibit the trustee from purchasing trust assets. If self-dealing might ever be appropriate (for example, a family member purchasing the family business from the trust), build in beneficiary consent procedures or court approval mechanisms in advance rather than dealing with them in litigation.
Broader Lessons for Business Owners and Their Advisors
The Seahawks situation is, at its core, a trust administration story—one that happens to involve a famous football team. But the structural issues it highlights are present in countless family business succession plans across the country. Here are the key lessons we draw from this situation for our estate planning clients:
1. MATCH THE TRUST STRUCTURE TO THE ASSET
Not all assets belong in a revocable living trust, and not all trusts are appropriate vehicles for closely held business interests. Before funding a business into any trust structure, evaluate whether the trust can legally hold the asset, whether the trustee has the expertise to manage it, and whether trust ownership could trigger any regulatory, contractual, or tax consequences.
2. SPECIFICITY IN TRUST DRAFTING AVOIDS CONFLICT
The absence of a sale timeline in Paul Allen’s trust created ambiguity that ultimately led to a $5 million fine and years of public controversy. When a trust is intended to hold a business that must eventually be sold — whether due to partner agreements, regulatory requirements, or estate tax planning needs — the trust instrument should specify the timing, the process, and the trustee’s authority as clearly as possible.
3. IDENTIFY ALL EXTERNAL CONSTRAINTS ON THE ASSET
Ownership restrictions, partnership buyout obligations, franchise agreements, professional licensing rules, government clawback provisions, and shareholder agreements can all affect whether and when a trust can sell a business interest. These constraints must be mapped before the trust is established — not discovered years later under pressure from a co-owner, regulator, or, in this case, the NFL Commissioner.
4. STATE ESTATE TAXES ARE LOCAL — AND CAN BE SIGNIFICANT
For clients who own businesses or real estate in high-estate-tax states like Washington, Massachusetts, Oregon, or Hawaii, state estate taxes require specific planning that is separate from federal planning. Washington’s top estate tax rate now reaches 35%. That state tax is assessed in addition to federal estate tax, but because Washington estate tax is generally deductible on the federal return, the combined effective burden is not a simple “rate stacking” exercise — it depends heavily on the estate’s size, deductions, and structure. Still, in high-tax states the state layer can materially increase the total estate-tax cost and should be planned for explicitly.
5. THE TRUSTEE’S ROLE IS NOT PASSIVE
A trustee holding a significant business interest must actively monitor the asset, comply with any external obligations (including league rules, partnership terms, or licensing requirements), and make timely decisions in the best interests of the beneficiaries. Passive stewardship of an active, regulated business is not enough. The consequences of inaction can include fines, forced sales, and personal liability.
6. CONFLICT OF INTEREST PROVISIONS PROTECT EVERYONE
When family members serve as both trustee and potential purchaser of trust assets, the potential for self-dealing is real, and the legal exposure is significant. Clear conflict of interest provisions in the trust document, co-trustee structures, or independent trust protector roles can help manage these risks and give trustees a defined path forward when transactions involving their personal interests arise.
Conclusion: A Case Study Worth Studying
The sale of the Seattle Seahawks—if and when it closes—will almost certainly set a new record for sports franchise valuations. But for those of us in the estate planning profession, the more enduring story is not the price tag. It is the years of regulatory friction, the $5 million fine, the public controversy, the legal uncertainty, and the lingering question of what the trust’s beneficiaries might have received had the timeline been cleaner and the structure better suited to the asset it held.
At Slowik Estate Planning, we work with business owners, entrepreneurs, and high-net-worth families to design trust structures that protect assets, minimize taxes, and account for the real-world complexity of closely held business interests. Whether you own a medical practice, a commercial real estate portfolio, a manufacturing company, or a minority stake in a sports team, the planning questions are the same, and the cost of getting them wrong can be significant.
If you have questions about how your business interests fit into your estate plan, we would welcome the opportunity to review your situation.