3/2/2016 AZ Republic by Dr. Harold Wong

Warren Buffett is the 3rd wealthiest person in the world and is also known as “The Stock Market King”. The Rockefeller Trust was used extensively by John D. Rockefeller, who was the wealthiest man in the world 150 years ago when he consolidated the oil industry. Both were super wealthy titans of their eras. Given their unique perspectives on making money, what would Buffet like about the Rockefeller Trust.

When Buffett buys companies (he owns 100% of at least 80), he looks for a company that has a “defensible moat”, or unique competitive advantage. For example, in a deep recession, you may not be able to afford $7 for a small cup of Italian Gelato, or $6 for a sundae at Baskin-Robbins; but you can afford to go to Dairy Queen for a cone. Buffett has owned Dairy Queen since 10/21/1997. It’s the lowest cost ice cream store that is a national brand.

Buffett would like how the Rockefeller Trust creates a defensive moat that shields assets from: divorces of your kids, grandkids, or great-grandkids; or lawsuits. The Rockefeller family eventually had hundreds of Rockefeller Trust to protect their assets, managed by The Rockefeller Trust Company. On Good Friday, March 29, 1991, Willie was with his Uncle Senator Ted Kennedy and Cousin Patrick J. Kennedy, met two women at a bar in Palm Beach, Florida. All five went to a house owned by the Kennedy’s. One of the woman alleged she was raped by Willie and he claimed it was consensual sex. He was charged with rape and was acquitted in the criminal trial. There was not a civil lawsuit because the Kennedy assets are protected by the Rockefeller Trusts.

In June, 2007, the Times of London ran a story quoting Buffett stating that he paid a lower rate of tax than his long-time secretary. In a January, 25, 2012 Forbes article, states that “Buffett himself declares that he pays a 17.4 percent rate on taxable income. His staff, like (Debbie) Bosanek (his secretary), pay an average of 34 percent. Buffett does this because the maximum tax rate was 15% on long-term capital gains. Buffett can sell assets with $ billions of capital gains, and even avoid the current federal tax rate (20% rate on long-term capital gains for high income taxpayers plus $3.8% surtax on Net Investment Income) plus whatever the Nebraska state income tax rate is. He does this through donations to charitable entities such as the Bill and Melinda Gates Foundation.

He would love the Rockefeller Trust, where one can escape the typical estate taxes that are levied as each generation dies. With the Rockefeller Trust, the first generation pays estate taxes but assets that are inside the Rockefeller Trust do not pay estate taxes on each generation’s death. Example: assume one started with $ million and could always earn 6%. If there is a 50% estate tax every 30 years, the amount would grow to $68,011,734. If the Rockefeller Trust prevented this estate tax at every generation, the amount would grow to $1,088,187,748.
Conclusion: there are Big Boy financial and tax strategies that the Rockefellers, Kennedys, and Warren Buffett use to save income tax; prevent estate tax across generations; and provide asset protection. This level of planning is not usually known by most CPA’s and attorneys.

Free Seminars: On Tues. 3/8/16, 10 am-12 noon seminar followed by lunch 12-1 pm, “Secrets of the Rockefeller Trust” will be given at IronOaks Country Club, 24218 S. Oakwood Blvd., Sun Lakes, AZ 85248. On Weds. 3/16/16, 10 am-12 noon seminar followed by lunch 12-1 pm, “Secure Your Financial Future: Lessons from Warren Buffett” will be given at the Sun Lakes Country Club, 25425 S. Sun Lakes Blvd., Sun Lakes, AZ 85248. Please RSVP at (800) 955-1408) or haroldwong1@yahoo.com.

Please contact Dr. Wong for a consultation at (480) 706-0177 or haroldwong1@yahoo.com


Mar 02, 2016

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