The backstory:
- Harold Hamm is an American entrepreneur who founded Continental Resources, Inc. back in 1967 (then known as Shelly Dean Oil Company).
- The major oil producer is mainly known now for its use of shale oil, which is similar to petroleum.
- His net worth is currently estimated to be US$17.5 billion, which makes him the 63rd wealthiest person in the United States and 121st wealthiest person in the world.
- Now, two of the most common (and entirely legal) loopholes for avoiding the country’s 40% estate and gift tax is to structure the transactions where they can be passed on to family members, for example, but aren’t technically gifts.
- This is something that Democrats have proposed shutting down, but that proposal is now stalled in Congress.
- In the past, Hamm, 76, has said that his company is built to last and, over the past decade, he has been planning the succession of his company.
The development:
- A Continental Resources company filing mid-last week showed that Hamm had cut his stake and distributed his wealth to his children (at about a cool US$2.3 billion each), none of whom are allowed to sell until Hamm’s death.
- This wealth transfer marks one of the biggest wealth transfers in US history. Filings show Hamm used an LLC and more than a dozen different trusts to complete the transfers. This is actually fairly common among billionaires.
- “Full control stays with me, so this changes nothing in that regard,” Hamm said to Bloomberg after the filing showed that he’d cut his personal stake and that his stock had shrunk to under 25%. “What was done is just for estate planning. This started back in 2015.”
- Chief Financial Officer John Hart of the company described it as a “procedural step” that had been in the works for years and would continue for some time.
You drive the stories at TMS. DM us which headline you want us to explain, or email us.
