Wal-Mart issued a short news release yesterday saying that most of the late Helen Walton's Wal-Mart stock (an 8 percent stake in the company worth some $16 billion) would eventually be given toa family charitable foundation. The press accounts I've seen didn't delve further into this issue beyond a restatement of the release.
Two points: 1) Giving the stock to the foundation creates a vastly enlarged pool of money for charitable giving (more charter schools and vouchers, anyone?) and also exempts the wealth from the estate tax. 2) This USA Today article explains how the Waltons have been lobbying Congress for years to change federal law to allow foundations to hold greater ownership of a single corporate asset for a longer period. That way, the family can retain control of the corporation that might be lost in a forced sale. From the article:
The Waltons have said they plan to give Helen Walton's Wal-Mart stock to the foundation at some point, perhaps after her death. That would likely eliminate any federal estate taxes due on her approximately 8% stake.
But that wouldn't guarantee the Waltons could avoid a forced sale of Wal-Mart stock. That's because of a federal law covering investors with big holdings in a single company. In the Waltons' case, the law limits the amount of stock its private foundation can own to a maximum 2% of all shares in Wal-Mart. The law says excess holdings must be sold within five years.
The Waltons have supported bills in Congress that would raise the threshold to 5% and double the time allowed to dispose of excess shares. Similar bills are expected to be re-introduced in Congress this year after failing to win final passage in the last session, congressional aides say.