A portion of this article was published in CNBC’s Inside Wealth newsletter, a weekly guide for high-net-worth investors and consumers. Sign up to receive future editions directly to your inbox.
Jensen Huang’s $140 billion in Nvidia stock is largely held in a trust he co-owns with his wife, Lori, and his departure from the company creates further uncertainty about the stock and his financial future, according to lawyers and SEC filings.
Mr. Huang and his wife jointly own about 800 million Nvidia shares worth about $135 billion through a complex web of trusts and LLCs set up for tax and estate planning purposes, according to SEC filings. Jensen Huang directly owns about 70 million shares, worth about $12 billion.
While it’s common for technology founders and CEOs to own company stock through trusts, it’s less common for founders to have equal ownership with their spouses, tax experts say. While the arrangement would further complicate Mr. Hwang’s sudden departure, it could be a stabilizing factor for the stock price because the trust would make it difficult for either Mr. Hwang or his wife to sell quickly.
“Mr. Hwang and his wife each may be deemed to have joint beneficial ownership and exercise joint voting and investment powers,” according to the SEC filing.
Mr. Jensen and Lori Hwang own approximately 530 million shares as co-trustees of the Jensen and Lori Hwang Living Trust, which was formed in 1995, according to filings. They are also co-trustees of the Hwang 2012 Irrevocable Trust, which owns 31.4 million shares, and the Hwang Irrevocable Remainder Trust, which owns 109 million shares. An LLC with Living Trust as its sole member owns about 135 million shares, according to filings.
Lori Hwang is the chair of the Jensen and Lori Hwang Foundation, which owns 69 million shares and reported a net worth of $9 billion in 2024, according to IRS filings.
Trust and estate attorneys say each trust structure is used for different tax and estate purposes. The living trust was likely a revocable marital trust, as it was established 10 years after the Huangs were married and two years after Nvidia was formed in 1993. Lawyers argue that living trusts can help couples avoid the potentially costly public probate process if one spouse dies. For example, many couples create a living trust for a purchased home or other assets.
Lawyers say the main tax benefit of a living trust is that if one spouse dies, the surviving spouse can take a larger basis in the entire trust estate, rather than just half of it.
Although the rules for living trusts vary, attorneys say that shares in a living trust are usually fairly easy to sell or divide in the event of a divorce.
“It’s like a joint checking account,” says Kathleen Martone, a partner at Varnum LLP.
Revocable trusts typically allow each trust to sell its own shares, but to prevent large-scale liquidations, executives and trusts typically enter into agreements with companies that limit the sale or transfer of stock, lawyers said.
“If you split the stock in a revocable trust, there would probably be transfer restrictions. He might have to hold the stock for her benefit, and she would get the financial benefit of the stock, but not the voting or management rights,” said Leslie Evans, a partner at Wizards. “He can continue to hold the shares while Lori receives other assets and equal installments.”
A more complex structure used by the Huangs, and one with the greatest tax benefits, is an irrevocable trust. “Mr. Hwang and his wife are co-trustees of both trusts,” the SEC filing states. In an irrevocable trust, the creator transfers ownership of the assets to the trust and cannot change the terms without the consent of the beneficiaries or the court.
Lawyers say the 2012 irrevocable trust is likely an “intentionally defective grantor trust,” a type of irrevocable trust that is still treated by the IRS as the owner of the assets even though its founder has gifted them.
This structure allows the founder to lend money to the trust to purchase shares and pay income tax to the trust if the trust makes income. The result is unlimited gifts to a trust that are exempt from inheritance tax.
Additionally, the trust can avoid capital gains taxes on the appreciation of the shares in the trust.
“Trust principals remain high, my own taxable personal assets are being used to pay taxes, and I’m able to funnel more and more money into trusts,” said Azriel Baer, trust and real estate partner at Farrell Fritz in New York.
Another of their irrevocable trusts, the Yellow Irrevocable Remainder Trust, was presumably established for the benefit of their children.
By definition, it is difficult to change the trustee and terms of an irrevocable trust. Experts say that because Jensen Huang and Lori Huang are both co-trustees, neither will likely be able to remove or sell the Nvidia shares held by the trust.
“Irrevocable trusts are their own business entities with their own operating rules and, as such, have some degree of property and asset protection planning,” Merton said. “In theory, an irrevocable trust would protect divorcing spouses as creditors.”
Of course, all protections depend on the terms of the trust, lawyers say. Whether an irrevocable trust can be modified, or “decanted” in legal parlance, depends in part on state law. California, where the Hwang family lives, is strict about changing irrevocable trusts.
For Nvidia shareholders, an irrevocable trust could provide stability for the stock since it would be difficult for either Mr. Jensen or Mr. Lori Huang to remove their shares from the trust and sell them.
Lawyers say the Huangs are unlikely to change the trust established for the benefit of their children.
“If (the trust) is for the benefit of the children, there’s no reason to pull them back into your estate,” said Weinstock Manion shareholder Rochelle Schultz.
