Hamm got those assets into the trusts via loans. The Internal Revenue Service requires that the wealthy pay interest on any intra-family lending, or else risk having it classified as taxable gifts. Filings show Hamm refinanced loans to his children’s trusts, at a principal value of $761 million each, on July 1, 2020. That timing allowed his family to lock in rock-bottom interest rates, making it far more likely they could pay back the windfall over the next several years. 

Since July 2020, Continental stock has returned nearly 250%, tripling the value of each child’s stake to more than $2 billion.

The spectacular rise in Continental shares made Hamm and his heirs richer, but by using trusts, he could ensure those wealth gains happened outside his taxable estate, meaning they wouldn’t be subject to transfer taxes.

The ultimate tax savings may total billions of dollars, even if Hamm still owes taxes on any wealth left in his estate. His heirs could also owe income taxes on their capital gains in Continental stock in the event they sell it.

‘Massive Accumulations’
Hamm was hardly the only wealthy American who used the ultra-low interest rates and market plunge of 2020 to deploy strategies for slashing future IRS bills, according to Robert Lord, an attorney in Arizona and tax counsel for Americans for Tax Fairness, an advocacy group. 

“It was the perfect storm for estate-tax avoidance,” Lord said of the post-pandemic period. The “massive accumulations of wealth building up” are “dangerous to society,” he added, “especially when it’s dynastic wealth that will not be broken up for centuries.”

Hamm, the youngest of 13 children born to poor Oklahoma sharecroppers, got his start in the energy industry at age 18 with a one-man oilfield services business he funded with a $1,000 loan. He struck out as a wildcatter four years later with a company that later became Continental.

Aggressive expansion has been key to Hamm’s rise. Two decades ago he bought 300,000 acres in North Dakota’s Bakken field. The region had eked out modest amounts of oil since the 1950s, but the advent of horizontal drilling and fracking, which Hamm helped pioneer, transformed the state into the country’s third-biggest producer by 2012.

A prominent Republican donor and energy adviser to President Trump during his 2016 campaign, Hamm’s biggest brush with mainstream fame arguably came in 2015 when he cut an almost $1 billion check to his ex-wife Sue Ann Arnall as part of their divorce. The settlement shrunk Hamm’s fortune by about a tenth.

Lucrative Loopholes
Trump and congressional Republicans made avoiding the estate tax easier than ever through a law that doubled the lifetime exemption -- the amount that anyone can leave to heirs tax-free -- to $24 million for a married couple this year. But that change did little to help those like Hamm who want to pass billions of dollars to their children.