Catenaa, Monday, April 13, 2026- The deal with SpaceX has helped shares of EchoStar surge more than 375% since early August, boosting the net worth of Co-Founder Charlie Ergen to $20.1 billion.
But the surge is also having a subtler, second-order effect on the former professional poker player’s fortune: Ergen stands to gain through his use of a niche estate-planning tool that may allow him to pass along more than $7.5 billion in stock to his heirs tax-free.
After a years-long slump, EchoStar, the operator of Boost Mobile and satellite TV provider Dish, got a jolt last year after agreeing to sell some of its spectrum licenses to Elon Musk’s SpaceX in exchange for up to 40 million shares in the privately held space company.
EchoStar’s shares have continued to rise in value as investors treat the stock as a proxy for SpaceX ahead of the rocket company’s planned initial public offering.
The timing couldn’t be better for Ergen, 73, who’s been preparing for just this scenario through his use of grantor retained annuity trusts, or GRATs, a tax loophole opened up a quarter century ago that lawmakers never closed.
About half of Ergen’s EchoStar stake, currently worth about $9 billion, is held in five of these specialized trusts, which allow individuals to pass assets to their heirs without paying the federal estate and gift tax rate of as much as 40%.
GRATs only confer tax benefits if the assets they hold appreciate during their term, usually two years.
That hasn’t always worked out for Ergen in the past. He set up dozens of GRATs as EchoStar’s stock generally flatlined through much of the 2010s, resulting in relatively few tax advantages.
Last year’s SpaceX deal is handing Ergen the inheritance jackpot he’s been waiting for. Not only has EchoStar’s stock gain boosted his net worth more than threefold, according to the Bloomberg Billionaires Index, but his heirs are positioned to save about $3 billion in taxes at the top rate of 40%, according to a Bloomberg analysis.
GRATs became a popular estate-planning tool for wealthy individuals following a 1990 tax law change, but it was a 2000 federal court ruling that entrenched their acceptance.
The so-called Walton decision, named for a GRAT set up by the sister-in-law of Walmart Founder Sam Walton, affirmed that assets transferred to an heir through a GRAT were exempt from federal gift tax.
GRATs are typically structured on a two-year timeline, with the creator receiving yearly annuities that roughly add up to the initial value of the asset invested, plus a premium set by the Internal Revenue Service. For the past few years, that premium has been close to 5%.
Since 2005, Ergen has shuffled his shares in EchoStar and Dish, which formerly traded as a separate company, through at least 58 separate GRATs, according to a Bloomberg analysis.
