Thread by @BW

[THREAD] America’s billionaires are giving their fortunes to family while avoiding billions in U.S. taxes. Here’s how trib.al/YP13CYy

For years, Nike founder Phil Knight has used a range of legal techniques to ensure his heirs keep control of most of his assets and profit from them, quietly transferring vast piles of money in a textbook example of how the rich avoid taxes trib.al/YP13CYy

One tool he’s been using is the GRAT (grantor-retained annuity trust).

How it works: First, set up a GRAT (or have your lawyer do it) and make your heirs the beneficiaries trib.al/YP13CYy

Second, put in assets, such as stocks, that have a good chance of making money over time.

Technically this isn’t a taxable gift, as long as the GRAT is set to repay you the initial value of the assets in the form of an annuity, usually over 2-3 years trib.al/YP13CYy

If the assets go up in value during this period, the gains can stay in the GRAT, minus a (usually low) minimum rate tied to interest rates. Whatever’s left goes to the heirs tax-free trib.al/YP13CYy

If the assets drop in value during that time, your heirs are unaffected. You can pretend the GRAT never existed and try again.

The more GRATs you set up—and some of the ultrarich open one monthly—the higher the chance some will succeed trib.al/YP13CYy

That’s not the only tax-dodging tool of the 0.1%.

Read the story to see more techniques used by Knight and America’s other billionaires trib.al/YP13CYy