Jensen Huang, the CEO of Nvidia, ranks as the 10th wealthiest person in the United States, with a net worth of $127 billion. Under normal circumstances, his estate would be subject to a 40% tax on his wealth when he passes away, amounting to a hefty tax bill for his heirs.

However, Huang, 61, is not just a tech visionary and Silicon Valley legend whose company creates the chips powering much of artificial intelligence. He also benefits from a series of tax avoidance strategies that will allow him to pass on a significant portion of his fortune without paying estate taxes, according to tax and securities filings reviewed by The New York Times.

These strategies could save his family approximately $8 billion, placing them among the largest tax avoidance cases in the U.S.

The wealth preservation techniques Huang employs are now widespread among the ultra-wealthy. Figures such as Blackstone’s Stephen Schwarzman, Meta’s Mark Zuckerberg, and top executives at Google, Coinbase, Eli Lilly, Mastercard, and AMD have all used similar financial structures to sidestep federal estate taxes, as revealed by a Times analysis of corporate disclosures.https://wordpress.com/

This phenomenon is part of a broader trend that has eroded the effectiveness of the estate tax — a tax levied only on the wealthiest individuals in the U.S. Despite the wealth of the richest Americans growing fourfold since 2000, estate tax revenue has remained stagnant. Had it kept pace, the tax would have generated around $120 billion last year, but instead, it only brought in about a quarter of that amount. The revenue gap is large enough to double the Justice Department’s budget and triple federal funding for cancer and Alzheimer’s research.

Huang’s tax strategy offers a prime example of how the ultra-wealthy navigate the U.S. tax system to their advantage. His methods were not authorized by Congress but were instead crafted by creative tax lawyers who exploited obscure regulations, court rulings, and IRS decisions, which over time have become standard practices for tax avoidance.

“You have an army of brilliant, well-paid experts constantly devising ways to exploit the system,” said Jack Bogdanski, a law professor at Lewis & Clark Law School. “Don’t expect Congress to stop this.”

Thanks to strategies like these, the wealthiest Americans can pass on an estimated $200 billion annually without triggering estate taxes, according to Daniel Hemel, a tax law professor at New York University.

Meanwhile, enforcement of estate tax laws has diminished, partly due to years of budget cuts to the IRS. In the early 1990s, the agency audited over 20% of estate tax returns, but by 2020, that rate had dropped to just 3%.

This trend is expected to continue with Republicans in control of both the White House and Capitol Hill, where there have been ongoing efforts to slash IRS funding and eliminate the estate tax altogether, often citing concerns about family farms and small businesses.

However, Huang’s multi-billion-dollar tax avoidance maneuvers, outlined in his SEC filings and his foundation’s IRS disclosures, demonstrate just how much the estate tax has been weakened.

“From an estate-tax-planning perspective, it’s a home run,” said Jonathan Blattmachr, a leading expert in trusts and estates who reviewed Huang’s tax filings. “He’s done an exceptional job.”

While Huang’s representative declined to comment on the specifics of his tax strategies, his actions are indicative of a broader trend among billionaires.

Historically, governments have sought to curb the accumulation of dynastic wealth. From the Roman Empire to Adam Smith’s critiques of inherited fortunes, the idea of taxing wealth at death has long been a part of political discourse. In the U.S., the modern estate tax was introduced in 1916. Yet, in recent years, Republican lawmakers have gradually watered it down by reducing the tax rate and increasing the exemption threshold. Today, married couples can pass on roughly $27 million without tax liability, with anything above that taxed at 40%.

Many billionaires, including Gary Cohn, a former Goldman Sachs executive, have openly scorned the estate tax. Cohn once remarked, “Only morons pay the estate tax.”

Huang, not a moron, began his wealth-building journey in 1993. Along with two colleagues, he conceived the idea for Nvidia at a Denny’s in San Jose, California. The company started by developing chips for 3D graphics, eventually expanding into the semiconductor market for products like Tesla’s electric vehicles.

In 2012, Huang and his wife took their first steps in shielding their wealth from the estate tax by setting up an irrevocable trust and transferring 584,000 Nvidia shares into it. These shares were worth $7 million at the time, but their future tax savings would be far more substantial.

This move built upon a strategy from 1995, when the IRS approved a tax avoidance tactic known as an “intentionally defective grantor trust” or “I Dig It.” This structure helped billionaires avoid both the estate and gift taxes, enabling them to pass on large fortunes to heirs with minimal tax burden.

The strategy is complex but highly effective. For example, if a wealthy individual, John Doe, transferred $10 million into a trust, he could use a loan and trust structure to buy $100 million worth of shares, which would not be subject to the estate tax. If the shares appreciated significantly, all the gains would be shielded from taxes.

Huang likely employed a similar strategy. The $7 million worth of Nvidia shares he moved into his trust in 2012 are now valued at over $3 billion. Had these shares been passed directly to his heirs, the estate tax would have been over $1 billion. Instead, Huang’s heirs will likely face only a small tax bill.

In 2016, the Huang family took another step to reduce estate taxes by establishing multiple grantor-retained annuity trusts (GRATs), which allow wealthy individuals to transfer assets to heirs while retaining a small annuity for themselves. If the assets appreciate beyond the annuity value, the gains are transferred tax-free to the heirs. This strategy was pioneered in the 1990s by the ex-wife of Walmart co-founder Sam Walton and has since been widely adopted by billionaires.

In Huang’s case, he transferred over 3 million Nvidia shares into GRATs in 2016, which were worth $100 million at the time. These shares have since soared in value to over $15 billion, potentially saving the Huang family around $6 billion in estate taxes.

Additionally, Huang employed a charitable tax dodge starting in 2007, using his foundation to make large donations of Nvidia stock. These donations were tax-deductible, reducing his personal income tax bills. Furthermore, the foundation transferred the stock to a donor-advised fund, allowing it to avoid giving the money directly to charity while still claiming a tax deduction. This strategy has also significantly reduced the estate tax burden, saving the Huang family an estimated $800 million.

In total, Huang’s tax avoidance strategies, including the use of irrevocable trusts, GRATs, and charitable donations, demonstrate how the wealthiest Americans can navigate the estate tax system to pass on enormous fortunes with minimal tax liability.