He gave 20% of the shares to each of his four children – Jim, Rob, Alice and the late John T. – while he and his wife Helen retained the final 20%.

Walton discussed the structure’s main advantage in his autobiography, “Sam Walton: Made in America.”

“The transfer of ownership occurred so long ago that we did not have to pay any substantial gift or inheritance tax on it,” he wrote.

“The principle behind this is simple: the best way to limit the payment of inheritance tax is to give away your assets before they increase in value.”

In other words, Walton passed on 80% of Walmart to his children when it was worth next to nothing. They would have owed billions of dollars in estate taxes if they inherited his stock when he died a billionaire nearly 40 years later in 1992.

Parking the family’s Walmart stock in the partnership and deciding as a group when to cash in had other benefits. It meant the Waltons nurtured their fortune rather than “throwing it all over the place to live a life of luxury,” Walton wrote.

“It wasn’t lavish or excessive, and that was part of the plan: to keep the family together and maintain a sense of balance in our values.”

It also ensured that the family retained control of Walmart and prevented it from being broken up and sold for parts, “the best protection there is against the takeover raiders,” Walton wrote.

By giving the children a say in how the family’s wealth was spent, when they were all under the age of nine, they also learned to handle money wisely.

“It was financially great, but there was another aspect: the relationship that developed between the children and with the family. It developed their sense of responsibility to each other. You just can’t beat that,” Helen Walton wrote in the book.

Looking ahead

It’s been more than 70 years since Walton opened his first brick-and-mortar store in Bentonville, Arkansas and founded the family business.

He never imagined that Walmart would generate $600 billion in net sales a year, employ 1.6 million Americans (about 1% of the U.S. workforce), and grow into one of the largest companies in the world, worth about $600 billion.

Nor did he anticipate that his three surviving children would each eventually have a fortune of nearly $100 billion. But he would surely be pleased that the vast majority of their wealth is still tied up in their Walmart shares in the family trust fund.

Walton, who lived a modest life for a billionaire, knew that future generations could squander the family fortune on obscene luxuries such as private islands.

“One of the real reasons I’m writing this book is so that my grandchildren and great-grandchildren will read it in a few years and know this: If you start that nonsense, I’ll come back and haunt you. So don’t even think about it.”