Real estate is an important part of a family office’s investment portfolio. In the Bonner & Partners Family Office strategic asset allocation model, 35% of your wealth is allocated to real estate and private investments. And to diversify your real estate holdings, Bill and the team recommend owning real estate overseas as well as in your home country.
Family Office Blueprint
London mayor Boris Johnson recently received a tax bill from the United States Internal Revenue Service… and he isn’t happy about it. Why does the mayor of London owe US taxes? Well, Boris was born here… though he hasn’t lived here since he moved to Britain when he was five years old – almost 50 years ago. But that still makes him a US citizen. And when he sold his personal residence in Britain, he neglected to pay US capital gains tax on the sale. Gains from the sale of his personal residence are exempt from British taxes. But the IRS doesn’t care.
Two decades before Andrew Jackson became the seventh president of the United States, he met Charles Dickinson on the banks of the Red River in Kentucky… Their meeting could not be avoided. Dickinson had committed an unpardonable sin… He accused Jackson of cheating on a horse race bet… and then slandered his wife, Rachel. Dickinson called Rachel a bigamist because of a legal error in her divorce from her first husband. Jackson promptly challenged Dickinson to a duel – to protect his family’s honor. With their backs toward each other, they were to walk eight paces, turn and fire.
My friend Amy has a problem… Her father is very ill. She’s not sure how much longer he has to live. To make things worse, Amy’s brother recently told her about a trust their father has been keeping secret… Amy doesn’t know what’s in it. She doesn’t know why her brother knew about it and she didn’t. And she doesn’t know what will happen to it when her father dies. Amy’s father never talked about any financial matters with his kids. That’s the way old-school estate planning has typically worked. The family attorney deals only with the parents – who have a difficult time deciding what to do.
In 1945, 27-year-old Sam Walton borrowed $20,000 from his father-in-law to open his first business – a Ben Franklin variety store franchise in Newport, Arkansas. In 1950, he bought a second store, in Bentonville, Arkansas, and named it Walton’s Five & Dime. Fast forward to 1962. By then, Sam and his brother Bud owned 16 variety stores in Arkansas, Missouri and Kansas. And on July 2, 1962, they opened their first Wal-Mart Discount City store in Rogers, Arkansas. Sam Walton’s ambition and business acumen are legendary. He turned his first small variety store in Arkansas into one of the world’s largest family-owned businesses. The Walton family still owns 51% of the voting interest in Wal-Mart Stores, Inc.
George Peabody is often referred to as the first great modern philanthropist. He was born poor in Massachusetts in 1795. At the age of 11, he became an apprentice to the owner of a general store. By the age of 20, he had used that experience to become a partner in a dry goods business… with even bigger things to come. From there, Peabody developed into an international financier, making his fortune in merchant banking. He had a knack for channeling desperately needed European capital into promising ventures in the United States in the 19th century.