Many people are familiar with Walmart's incredible success: from a single store in 1950 to more than 10,600 stores and clubs in 19 countries today. Each $1 invested in Walmart stock when it went public in October 1970 would have grown to $33,643 by December 2024, not counting dividends. However, this post isn't focused on investing in Walmart; it's about the important topic of estate planning, inspired by the legacy of Walmart's founder, Sam Walton.
Leland Stanford Robson
Sam Walton's father-in-law, Leland Stanford Robson, was a banker, lawyer, and rancher in the small town of Claremore, Oklahoma. Robson may have been the most important of Walton's early mentors: He provided the initial funding to get his son-in-law started in business, and later on, he had a considerable influence over what would become of Walton's fortune.
Robson carved out his own path in life. Hailing from Georgia, he ventured to Oklahoma in 1909 as a 25-year-old traveling peddler, selling everything from pots and pans to Bibles and picture frames. Through hard work, he saved enough to attend law school back in Georgia before returning to Oklahoma, where he intended to set up shop in the thriving oil town of Tulsa. However, he soon decided to relocate about 20 miles northwest to the quieter town of Claremore. In 1916, he married a local woman named Hazel Corrine Carr, and within a short span of less than four years, they welcomed three sons and a daughter, Helen, into their family.
Robson was a smart, unpretentious man who always had his ear to the ground. His law practice flourished, and like many prominent figures in small towns, he found himself involved in various ventures. He served as city attorney for 12 years. During the Great Depression, he seized the opportunity to acquire 18,500 acres of land at a bargain and started ranching. By 1936, he helped establish the Rogers County Bank in Claremore, where he would serve as director, president, and chairman for the next three decades. He wound up with interests in coal-mining, farming, and other industries, as well.
Early on, Robson organized his ranch and family businesses as a partnership, with Helen and her brothers as equal partners. This was the same arrangement Robson would recommend for the Walton family.
Walton Enterprises
From the day his daughter, Helen, married Walton in 1943, Robson actively involved himself in their financial affairs. By 1952, Walton's successful five-and-dime store in Bentonville had paved the way for a second location in Fayetteville, just 24 miles away. Robson persuaded his ambitious son-in-law to set up his own business as a family partnership. So, in early 1953, with Robson overseeing the process, Bentonville attorney William H. Enfield prepared the legal documents that established Walton Enterprises. Sam, Helen, and their four children—Rob, who was then eight; John, who was six; Jim, who was four; and Alice, who was three—were all partners. As it was organized, Sam and Helen Walton together owned a 20% stake in the partnership, and each of the children owned 20%.
When Sam Walton died, in 1992, Helen Walton immediately had his will sealed in state chancery court. But, from comments he made earlier, he seems to have arranged to have his interest in the partnership pass to a marital trust for Helen. That way, he deferred any estate tax. On her death, it apparently was to pass to various family charities, resulting in no estate tax for either the Walton children or the family businesses. The charities would receive a minority share in the family partnership, ensuring the family retained control over the stock's voting power.
By transferring 80% of his holdings to his children so early on, Walton skillfully avoided significant gift or inheritance taxes. He put it the way his father-in-law probably had put it to him: "The best way to reduce paying estate taxes is to give your assets away before they appreciate."
Today, the Walton family has a net worth of $432 billion, making them the wealthiest family in the world.