Tuesday, September 24, 2013

Mrs. Huguette Clark, "Empty Mansions" and, the Estate that keeps on giving.

It's done. The estate of reclusive copper heiress Huguette Clark has been divided up and, the parties have agreed - signing the agreement in the middle of the night. The agreement was then delivered to the judge early this morning - ending the trial that was set to continue jury selection today.

NBC News' Pulitzer Prize winning investigative reporter, Bill Dedman, who stumbled upon Clark's empty Le Beau Chateau some years ago - sparking a search for the reclusive heiress, penned a truly remarkable book: Empty Mansions: The Mysterious Life of Huguette Clark and the Spending of a Great American Fortune with Clark cousin Paul Clark Newell Jr.

Remarkable? Please. Empty Mansions is on another level. If you've been living under a rock and haven't been in this space, I wrote about the book not too long ago.

Anyway, as Dedman reports today at NBCNews.com:
A deal has been reached to divide up the $300 million estate of the reclusive heiress Huguette Clark, a shy artist who lived her last 20 years in New York hospitals while her palatial homes sat empty.

The deal gives $34.5 million to Clark's relatives, although her will stated emphatically that they should receive nothing. These relatives are the great-grandchildren and great-great-grandchildren of Huguette's father from his first marriage. Her father — W.A. Clark, the copper miner and former U.S. senator from Montana who also founded Las Vegas — left equal shares of his fortune to all of his surviving children: Huguette and four of her half-siblings.

The settlement sets up an arts foundation controlling the Clark family's $85 million California summer home at Santa Barbara. That charity is the largest beneficiary of the will, as Clark directed, but with a twist: In the settlement, the foundation isn't set up in California but in New York, with the New York attorney general forming the first board of directors. Seats are reserved for the Santa Barbara community, and Clark relatives also get a seat.

After Huguette Clark died in 2011 at age 104, 19 relatives challenged her will, claiming she was mentally ill and had been defrauded by her nurse, attorney and accountant. No one was charged with any crime after an investigation by the district attorney's office, but enough questions were raised that the case is being settled before the jury trial, which could have lasted six to eight weeks. The relatives, who last saw her in 1957 and most of whom never met Clark, will take home the full $34.5 million, as the estate will pay the relatives' taxes and $11.5 million in legal fees. Altogether, about $25 million in legal fees are included in the settlement.

The big loser in the settlement is Clark's nurse and companion, Hadassah Peri, who was the daytime private-duty registered nurse for 20 years while Clark lived in Doctors Hospital and then Beth Israel Medical Center. Peri had received $31 million in gifts while Clark lived, and was in line for a share of the will, approximately $30 million before taxes. (Read the will.) But under the settlement the nurse receives nothing from the will and has to pay back $5 million to Clark's estate.
The sticking point right now is the Bellosguardo Foundation. There has been a foundation already established in California - but Attorney General Schneiderman has said that the foundation will be based here in New York. That is to say that it would be a New York charity, but would have it's offices in Santa Barbara, CA.

Again, from Dedman's reporting:
The legal quandary is this: The will set up the foundation, but until the will is determined to be valid by a judge or jury, does the foundation exist, and can it be represented in court? The law on this question is thin. Judge Anderson ruled after a secret hearing that the California foundation can't be represented. The California group filed an appeal on Monday.

That question could ultimately end up in federal court. If the New York appeals court doesn't allow the California group to participate in the settlement, the issue could be revisited in a California court when the New York Bellosguardo Foundation tries to take control of the property. That conflict between states could ultimately become a federal case.

In addition to the Clark summer home, valued conservatively at $85 million [and the art contained therein], the new Bellosguardo Foundation would receive Clark's $1.7 million doll collection, which had been left to the nurse, and $4.5 million in cash.
But then, there are the taxes. Mrs. Clark was a generous woman - to say the least. However, she owed quite a large amount of Gift Taxes to the IRS ... some $82M. The estate has asked the IRS to lower the fees on the back taxes. If the IRS insists on claiming ever dollar owed, it will eat into the amount of money given to the Bellosguardo Foundation - which could ultimately force the foundation to sell off the mansion for which it is named.

As it stands now, the Attorney General's spokeswoman, Melissa Grace, released this statement:
"After more than two years of litigation, Attorney General Schneiderman's Charities Bureau has brokered a settlement that will ensure that Huguette Clark's charitable wishes are fulfilled, allowing the bulk of Mrs. Clark's wealth to go to charity instead of being wasted on legal costs. The arts foundation that Mrs. Clark envisioned will be created, with the gracious and historic Bellosguardo mansion in Santa Barbara, California, at its center."
This makes me smile.

No comments:

Related Posts Plugin for WordPress, Blogger...