As early as when A.N. accumulated wealth, in order to avoid taxes, Pritzker family assets were controlled by a large number of family trusts. From 65438+1940s, A.N. used a large number of unrelated family trusts to hold family property, and relied on legal expertise to use family trusts as a tool for tax avoidance. It is reported that A.N. established 1740 offshore trust company in New Providence, Bahamas in 1963, with a Frenchman named Francois Harispuru as trustee. In this way, the US government cannot tax the income and capital gains generated by these trusts.

These trusts jointly set up a partnership organization-International Settlement Association (ICA). ICA obtains income from the trusts and then lends the funds to other trusts or other companies in the family. 197 1 year, A.N. established the second batch of trusts in Nassau, the capital of Bahamas. The trust is carried out in the name of Castle Trust Company, which is partly owned by Burt Kanter, a tax lawyer of the Pritzker family.

These trusts also operate in a special way and have great leverage. Most of the income in that year was used to repay the loan interest borrowed for investment (Figure 2). These trust companies borrow money from ICA at LIBOR and then invest in new investment projects. In this way, for the trust, there is not much income left every year. In this way, the income of the trust is converted into capital and capital appreciation, and the promoters of the trust create value for the beneficiaries without transferring the trust assets, while avoiding the gift tax in the transfer of the trust assets. Before A.N.' s death, he transferred most of his family's property to a number of offshore trusts in the above way. The family claimed that from these trusts, the rich man with a net worth of more than one billion dollars left only 25,000 dollars. Family trust saves a lot of taxes for the whole family. Although the IRS claimed that the Pritzker family should pay $53.2 million in taxes to the government, the Pritzker family finally paid only $9.5 million in taxes and interest because the IRS could not find out how many family assets these complex trusts controlled.