Tallahassee — Florida has long been a tax haven, but new trust laws enacted in the last three years that are friendly to heirs to Walmart estates and other family members have made the state a super-rich seeking to hide their wealth and avoid taxes. Become more attuned to layers over generations.
Trusts like this are essential to keeping trillions of dollars out of the federal government. treasury enough to pay most National debt or spending on education, social services, or other government programs.
of According to the bill’s sponsors, three new laws will help Florida become more competitive in trust and property management businesses and help protect the personal information of wealthy families.
It also makes it difficult to scrutinize family trust activity to see how much property and money is being transferred, and the lack of transparency that allows assets to be hidden.
Opponents, including First Amendment foundations and real estate and trust attorneys, have created an elite secret court system where the richest families can expose their problems without scrutiny, eliminating the need to pay taxes for 1,000 years. said to promote non-dynastic trusts and protect trustees from adverse consequences.
Sarah Butters, a Tallahassee attorney and chairman of the real estate section of the Florida Bar Association, said, “The more we exempt from public accountability, the more forums we create for potential villains.” There is concern that
The potential money at stake is astronomical.
According to Miami real estate and trust attorney Juan C. Antunez, the largest intergenerational wealth transfer in decades is set to take place, with an estimated $30 trillion to $68 trillion set to take over. With an inheritance of over $12.9 million taxed at up to 40%, federal tax revenues could be as high as $27 trillion for him.
“The competition among U.S. states to win as much of that trust business is fierce, and the stakes are high for the bankers and professionals making a living out of those trusts,” Antunez said. “How high? Think billions of dollars.”
Family trust trustees do not require Florida residency and have no tax or financial benefits other than what bankers and lawyers receive in payments.
Since the Family Trust Company Act was passed in 2014, there are only 24 family trust companies registered with the state’s Administrative Services Division, but they represent some of the richest families in the United States and Florida. In addition to Walmart’s Walton, they represent the family of owners of the Outback Steakhouse and Bloomin’ Onion brands, and former Revlon president Ron Perelman.
Also included on the list is the Greenway Family Trust, which manages the assets of the owners of the Orlando-based Greenway Automotive Group. The other manages the wealth of the Demetri family, who arranged the land deals for Walt Disney to create Walt Disney World and Epcot.
According to public records obtained by the Orlando Sentinel, Matt Forrest of Ballard Partners, a leading Tallahassee lobby firm, was involved in drafting the trust law and preparing points to refute dissent. played a wide range of roles.
Records also show that Kenneth Halcombe, a partner at the New York law firm Cravath, Swain and Moore, who represented the Walmart heirs, spearheaded the lobbying effort.
Halcom established a family trust company in Naples, Florida in December 2018. Bloomberg News reports that the company has partnered with Walton Enterprises LLC, the primary investment arm of his Walton family.
A year later, in October 2019, Halcom formed the Florida Coalition for Modern Laws and quickly hired Ballard Partners to represent them in the state legislature. It is registered as a non-profit “social change advocacy organization” and its membership is exempt from the Public Records Act.
Lobbyist records show that the coalition paid Ballard Partners as much as $200,000 over the four years it represented the organization before legislative bodies.
While they were working on drafting the bill, Walmart heiress Jim Walton campaigned for the bill’s sponsors and chaired the committee responsible for passing the bill to about $200,000 over four years. It poured in dollars, state campaign finance records show.
Among the donations leading up to the 2020 session are Rep. Mike Caruso (R-Delray Beach), who sponsored HB 1089, and Senator Joe Gratters (R-Sarasota), who sponsored the Senate version of SB 1366. included $5,000 each to
He also donated $25,000 each to the Florida Republican Party and the Florida Republican Senate Election Commission. Another heiress, Robson Walton, donated $25,000 to the Friends of Ron DeSantis.
The law, signed by Governor Ron DeSantis in June 2020, protects trustees from the adverse effects of paying taxes to trust beneficiaries.
It also creates tax shelter in the form of tax-exempt gifts and withdrawals to trust beneficiaries without incurring gift or estate taxes and protects trust assets from being subject to claims by creditors.
This pattern repeated itself in the months leading up to Congress in 2022, when lawmakers introduced two more bills. One is to close a loophole in the public record in court proceedings on internal family trust company matters, and the other is to extend the life of the trust to 1,000 years.
As early as November, Forrest reached out to members of Congress ahead of the 2022 session to step up their support. Records show that Jim Walton distributed another $100,000 to key lawmakers.
Among these recipients were $10,000 to Gruters, who sponsored both Senate bills passed in 2022, and $2,500 to Rep. Elizabeth Fetterhoff, who sponsored the House bill, and R-DeLand. I was.
Jim Walton also donated $10,000 to Rep. Mike Beltran (R-Lithia), who sponsored HB 1001, which extends the life of the trust to 1,000 years. Walton also donated thousands of dollars to the chairs of the Senate Judiciary Committee who heard the bill, including Danny Burgess, he’s R-Zephyrhills, and Jim Boyd, who’s R-Bradenton, of the Senate Banking and Insurance Committee. bottom.
In a text message to Beltran, Forrest said he was going to hit the road. The chairman of the committee who received money from Walton.
Halcomb left Cravath Swain and Moore to run River Bend Holdings, according to a 2021 Bloomberg News article. He resigned from the Florida Coalition for Modern Law in 2022 and was replaced by David Finkelstein at Cravath, Swaine and Moore law firm, according to state business records.
Halcom could not be reached for comment.
Forrest said Ballard Partners does not represent Walmart, the coalition has “multiple backers” of the bill, and it was not written for any particular family trust company.
Forrest also said he was only overseeing legislation on behalf of his clients, but emails and text messages were reported between him and the bill’s sponsors months before the bill was introduced and the legislative session began. This indicates that there was extensive communication between
In one text message to Bertrand, he refers to the public records exemption as “my public records bill” and asks, “Is the latest draft satisfactory to you?” He also confirmed that Cravath and Moore were involved in drafting the bill, calling it the “Cravath/Swain Act”.
Just weeks after the 2022 session, Forrest sent an email to Gruters’ aide, attaching the latest talking points about exemption from public records.
“Did you get the revisions I sent last night? Please let me know when the drafts come back. I’ll have the team double check.” I read emails.
During a committee discussion on the bill, D-Orlando Rep. Carlos Guillermo Smith said he feared the exemption would create a two-tier court system.
“I fear that some trusts will become public records and some will not. “It would mean that,” Smith said.
These laws move Florida up the ranks of a dozen or so highly competitive states deemed trust industry-friendly, according to a National Policy Institute study.An estimated $5.6 trillion is now held in US trust and real estate assets
“Trusts are one of the primary mechanisms used by ultra-high net worth families around the world to cement their wealth into hereditary wealth dynasties,” the study states. “Dynastic trust, a type of trust, is such a tool because it can last for centuries, sometimes forever.”
Research shows that these valid states have three things in common. Low or no tax, confidentiality and sustainability of trust. “These states will either cut or eliminate taxes or pass laws to hide trust records from prying eyes,” the study said.