Some investors have speculated the Redstone family may have to sell CBS or Viacom shares to pay estate taxes.
That’s not true, according to Sumner’s attorney Bishop, a gift and estate tax specialist.
“Careful planning has been done so that estate taxes at Mr. Sumner’s death will not require a forced sale of assets,” Bishop said.
The Grandchildren
A potentially larger question concerns the other grandchildren, who don’t have a seat at the table like Shari Redstone and her son.
While the trustees have a fiduciary duty to do what’s best for the grandchildren, it isn’t clear would happen if one grandchild split from the others or if the five independent trustees bucked the family’s wishes.
The trust agreement may have some mechanism for resolving disputes, according to Gary Borofsky, an estate planning and tax attorney at Weinstock Manion in Los Angeles. That could include requiring unanimous agreement among the trustees for a sale of CBS or Viacom or the requirement that at least one family member approves.
“You have to look at the trust instrument,” Borofsky said in an interview said. “Without knowing it’s hard to say.”
National Amusements stands to receive about $88 million a year in dividends from CBS and Viacom. Redstone’s voting shares in CBS will produce almost $24 million, based on the 15-cent quarterly payment, while his Viacom stock will furnish $64 million, based on 40 cents a quarter.
National Amusements also operates theaters and has debt that is serviced, in part, by those dividends. Shari Redstone owns the other 20 percent of the company.