The Waltons and the Estate Tax

The Walton family of Sam Walton, founder of Wal-Mart, continues to grow wealthier. This counters the history of most families. The usual path is for family wealth to shrink after the generation that earned it passes on. This post from Bloomberg.com details some of the ways the Waltons have avoided or reduced estate and gift taxes over the years. Unfortunately, the theme of the article seems to be there’s a problem with the Walton’s preserving their wealth and helping it grow instead of paying a high percentage of it to the federal government. The tone of the article even seems to imply that there’s something wrong with the Walton’s using charitable foundations and gifts to both reduce taxes and transfer money to causes. Even so, there’s a lot the average person can learn about transferring wealth and doing good with it.

Alice Walton’s mother and brother poured more than $9 billion into trusts since 2003 that fund charitable projects like Crystal Bridges and are also designed to protect gifts to heirs from taxation. Another Walton pioneered a tax-avoidance maneuver that is now widely used by U.S. billionaires.

“I hate to say it, but the very rich pay very little in gift and estate tax,” said Jerome Hesch, a lawyer at Berger Singerman LLP in Miami who reviewed some of the Walton family’s trust filings for Bloomberg. “At the Waltons’ numbers, the savings are unbelievable.”

A family spokesman, Lance Morgan, said in a statement that “any charitable or estate planning practices employed by the Walton family are broadly available and commonly used.”

Morgan represents the branch of the family that includes Wal-Mart founder Sam Walton’s three surviving children and eight grandchildren. Their Wal-Mart stake is worth enough to fill a large backyard swimming pool with solid gold.