A variety of financial strategies have allowed for perhaps America’s richest family, the Waltons, to hold onto its money going well into a second generation. This has been done in part by the placing of the vast wealth into trusts that have been used in funding various charitable projects.
There is debate as to whether such a strategy is available only to ones that have billions of dollars accumulated. A Walton family spokesperson, however, stated that the estate planning practices of the family “are broadly available and commonly used.” In any event, the estate planning engaged in by the family has been ongoing for over sixty years.
Essentially, how the planning was done, was by providing the assets to their children through the setting up of a trust before these assets in the trust began to appreciate in value. The Walton family has provided a great deal of money to trusts in any number of ways where the assets have substantially appreciated. The appreciation of these trusts in essence allowed for the passing of money to heirs with a minimum of tax consequences.
With interest rates at an all-time low, some authorities feel it is an ideal time for many tax payers to set up trusts to ensure more money is provided to heirs with less tax consequences. It is claimed that these trusts, if set up correctly,
can result in assets growing faster than the money that is being distributed.
Please speak to a qualified estate planning attorney before setting up any kinds of trusts. Though strategies as the one mentioned above may not be available to everyone, attorneys can at least provide various options that may be used.
Source: Financial Post, “How Wal‐Mart’s Walton family holds onto their billions,” Zachary R. Mider, Sep. 12, 2013