Joe Kennedy did not like to talk about money. “It’s just not an important enough matter to talk over,” he said, and he meant at the dinner table and in public alike. Yet the arrangements he made for it were among the most durable in American family finance, and they began with a trust in 1926.
TIME’s 1969 account, written by his biographer Richard J. Whalen after the patriarch’s death, says that in that year Kennedy created a trust fund covering Rose and the children who had arrived by then. Another followed in 1936 and a third in 1949. The last became the vehicle through which he settled part of his wealth on 28 grandchildren. Celebrity Net Worth gives the same three dates.
Control stayed with the trustees
The design was cautious. Kennedy stipulated that control of the principal would pass to each child only at stated ages. One account lists income payments to each child when each turned 21, 25, 30, 40 and 45, and says the 1936 trusts were irrevocable and skipped a generation to keep estate taxes off the fortune for two generations. That account adds that the children never owned the assets; they were paid the income.
TIME’s example was the future president. When John F. Kennedy took office, it was disclosed that his holdings under the family trusts came to $10 million. A gross of $500,000 a year left him, after taxes, slightly more than $100,000 to spend. On his 45th birthday he had collected half of the principal held for him, with the other half left to the trustees’ discretion. His brothers’ wills made similar provisions for their own heirs.
From accumulation to preservation
The trusts reflected a change of mind. By about 1949 Kennedy had decided against further risk-taking and moved from building capital to protecting it, keeping his money away from “troubled places”. Manhattan real estate became the safe bet. A 1943 purchase on Lexington Avenue at 59th Street cost him $1,900,000, of which only $100,000 was cash. Late in 1963 the site fetched $6,000,000, all in cash. The Chicago Merchandise Mart cost just under $13 million in 1945. TIME valued it at $75 million in 1969, and in 1998 Vornado Realty Trust bought it for $625 million.
Kennedy died in 1969, and informed estimates then put the fortune near $400 million. A small circle of professional managers ran it from an office suite in the Pan Am Building in Manhattan. The Kennedys, TIME wrote, were plausibly said not to know exactly what they owned: the income mattered, not the capital.
The grandchildren benefited too. John F. Kennedy Jr. and his sister Caroline drew on trusts created by their grandfather as well as by their father, who was worth $12 million when he died in 1963. Heirs could still run short, though. Robert Kennedy died owing more than $3,000,000 in campaign debts and expenses, a bill his estate could not cover, and Edward M. Kennedy raised money to clear them.
Sources
- Nation: Where the Kennedy Money Is (TIME)
- Nation: Where the Kennedy Money Is, Precautions for the Children (TIME)
- How Rich Was JFK Jr. When He Died? (Celebrity Net Worth)
- JFK Net Worth: The Trust Fund Years (Social Life Magazine)
