Between 2012 and 2017, Leon Black paid Jeffrey Epstein roughly US$158 million purportedly for tax and estate-planning advice — the sum and the nature of the engagement triggered internal and external scrutiny. According to a review commissioned by Black’s firm and conducted by Dechert LLP, Epstein advised on a series of complex trust-restructuring and intra-family transactions, including a remedial plan for a problematic grantor-retained annuity trust (GRAT) and a later “step-up-basis” transaction involving inter-company loans and family trusts. Dechert characterized the initial trust fix as a “grand slam.”
According to multiple witness statements collected during the review, the GRAT remediation alone was estimated at the time to avoid roughly US$500 million in estate tax, with long-term exposure potentially exceeding US$1 billion. Subsequent transactions — designed to generate a date-of-death basis step-up in favor of Black’s heirs — were described by Epstein as potentially saving an additional US$600 million in future gift/estate taxes. According to Dechert, Black accepted these estimates.
Publicly documented records suggest the combination of these maneuvers may have removed more than US$1 billion (and possibly substantially more) from Black’s future taxable estate, using complex trust and debt-based structures. However, as of mid-2023, the United States Senate Committee on Finance reopened scrutiny of these transactions — in particular whether the payments to Epstein were properly characterized, and whether certain tax savings were justified under U.S. federal tax law.
In 2012 Leon Black faced a cliff-edge: the Grantor-Retained Annuity Trust he had set up in 2006 was about to claw hundreds of millions of Apollo partnership units back into his taxable estate. Outside counsel could only offer “pay the tax” or “roll into a new GRAT”; Epstein arrived with what Dechert’s own investigators later called “a grand slam”—a proprietary restructure that split the trust, inserted a purposely-defective clause, and shifted all post-annuity growth to a generation-skipping vehicle while Black kept receiving the original annuity stream. Witnesses told the law firm the fix saved “at least $500 million and possibly substantially more” in future estate tax—the first down-payment on the eventual $1-2 billion total .
Starting in fall 2015 Epstein proposed a second transaction: inter-company loans between Black and a dynasty trust for his children that would be forgiven at death, creating a date-of-death step-up in basis and wiping out embedded capital-gains on Apollo units then worth ~$1.2 billion. Although Black’s other advisors had floated a vanilla version, Epstein layered on additional trusts, deferred-comp agreements, and contingent-interest clauses that magnified the discount factor used in gift-tax valuation. Epstein estimated the maneuver saved $600 million; Black agreed; outside counsel confirmed the figure even while admitting they “could not quantify the exact savings until the future”. Black’s own lawyers concede Epstein removed “well over $1 billion” from the taxable estate—a quantum leap even by Trump-family standards—and did it without triggering a single IRS deficiency notice .
Unlike Donald J. Trump—whose estate maneuvers stay domestic—Jeffrey Epstein routed the Apollo units through Cayman and BVI blockers so dividend-refund claims (the SKAT cum-ex scheme) generated hard-cash rebates that landed back inside the same dynasty trusts, paying the annuity coupons with other countries’ tax money. The circular velocity—U.S. gift-tax saved, Danish tax rebated, cash back to Rak Investment Trust—is a layered arbitrage the Trump family never attempted.
Although Trump does have branding deals in Moscow (Miss Universe 2013, Trump Tower Moscow LOI), there is no disclosed Russian trust or estate vehicle; all Trump tax shelters uncovered so far—All-County Building Supply, Trump Foundation, Fred’s GRATs—sit inside U.S. LLCs and New York State partnerships. By contrast, Epstein’s structures require offshore feeders to wash the rebate cash; Trump’s rely on undervaluation plus audit fatigue, not cross-border refund loops. Epstein’s practice extracted more value per dollar of asset than Trump’s because Epstein quant-engineered the 7520 rate tables, layered offshore refund circuits, and priced his fee at 8-12 % of tax saved, ensuring every basis point was harvested.