Sam Walton’s Estate planning is raising eyebrows after a Miami attorney described how to do it. Walmart (NASDAQ: WMT ) founders have shielded their heirs’ shares from divorce courts, avoiding the kind of split that would destroy a family fortune.
Jose M. FerrerWalton’s key move was to keep Wal-Mart stock out of his children’s personal names, said a highly regarded attorney in Miami, Florida, who specializes in commercial litigation, international litigation and arbitration and complex commercial cases.
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“Sam did not give shares of Walmart to any of his children. He placed them in a trust and gave rights to his children in that trust,” Ferrell said. “And the terms of this trust are simple. No matter what happens, no matter how many people you marry, how many times you divorce, the shares never leave the trust. And the trust is managed solely by the Walton family.”
“So if you’re a founder and you have a family and you have children, you have to understand that not every marriage will survive, some marriages will break up, and you can’t let your children’s marriage dissolve the company you built,” he added.
Walton also used the family partnership, Walton Enterprises, and later the Walton Family Holdings Trust, to keep Wal-Mart stock in a family-controlled entity rather than as marital property, so heirs would not take away the core shares even if they divorced multiple times. This structure means the shares belong to the family entity rather than the individual spouses, allowing ownership to be segregated in the event of a marriage breakdown.
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Ferrell contrasted this with the Vanderbilts, an American family that rose to prominence during the Gilded Age and whose fortunes dwindled over the generations as ownership broke down and succession took hold.
Today, the three surviving children, Rob Walton, Jim Walton and Alice Walton, are firmly in the $100 billion club, while the broader group of heirs, including grandson Lucas, control a fortune of nearly $440 billion, according to the Bloomberg Billionaires Index.
