A college dropout, Epstein amassed much of his wealth by charging hefty fees for providing tax and estate services to a handful of billionaires like Leslie Wexner, a retail magnate, and Leon Black, a private equity investor.
Epstein’s estate has paid out about $US164 million in settlements to nearly 200 people he sexually abused while they were teenagers or young women. The estate also reached a $US105 million settlement with the government of the US Virgin Islands to resolve a lawsuit over big tax breaks Epstein had received for businesses, and it has paid tens of millions of dollars in fees to lawyers and other professionals. It also repaid a $US30 million loan.
The tax refund stems from an estimated $US190 million payment the estate made to the IRS in July 2020, based partly on assumptions about the value of assets that have since been sold for far less. Epstein’s mansion in Manhattan, for instance, sold for nearly $US40 million below the asking price.
Tax experts said it was not unusual for the IRS to refund money to a wealthy estate, especially if the executors overvalued some of its properties and underestimated the amount of its debt.
William LaPiana, dean of faculty at New York Law School and an expert on trusts and estates, said some of the refund might also be the result of the estate’s not knowing how much it would owe under the settlements that were reached after the $US190 million tax payment was made.
David Boies, a litigator who represented many of Epstein’s victims, said it was a “terribly frustrating” turn of events that largely unnamed beneficiaries of Epstein’s estate might benefit instead of his victims.
Boies’ firm is handling one of the last remaining lawsuits brought on behalf of victims — a potential class action filed against the estate’s co-executors, Richard Kahn and Darren Indyke. Kahn was Epstein’s longtime accountant and Indyke his longtime personal lawyer. Both are listed as beneficiaries of Epstein’s estate, court filings show.
The lawsuit filed on behalf of victims who never received a settlement has accused the two men of “aiding, abetting and facilitating” Epstein’s sex trafficking. In court papers, Kahn and Indyke have denied the allegations and said they had no knowledge of his sex trafficking.
With the litigation against the estate winding down, much of the action will move to the US Virgin Islands, where Epstein’s will is being probated. Once a judge reviewing the will decides there are no more outstanding claims against the estate, the remaining assets will flow into a trust established by Epstein.
The so-called 1953 Trust, named for the year Epstein was born, was referred to in the will he signed in a federal jail in Manhattan — just two days before he killed himself on August 10, 2019.
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Kahn discussed how much he expected to be left in the estate in a spring 2023 deposition previously reported on by The New York Times. He also testified that the 1953 Trust was a poorly drafted document and that it was unclear how Epstein wanted the remainder of his estate distributed. Kahn said the trust had many beneficiaries, but he declined to disclose them. He added that he didn’t expect to get much of anything from the trust.
The trust has never been made public, but a court document describes Kahn and Indyke as co-trustees in addition to their roles as estate beneficiaries.
The only other known beneficiary of Epstein’s trust is Karyna Shuliak, his girlfriend at the time of his death. The court document reveals that Shuliak is a potential beneficiary of $US4.65 million of the estate’s personal property in Manhattan.
Shuliak, the last person outside the jail who spoke to Epstein, did not respond to a request for comment.
This article originally appeared in The New York Times.
