Gifts, Generosity or Undue Influence?

Gifts, Generosity or Undue Influence? is the first of a series of posts that we’re calling – for lack of a better title – Famous Estate Cases. We think there’s nothing quite as instructive about probate, wills, estates, disinheritance, undue influence and so everything else we write about  than real life examples. 

Plus, of course, they’re fascinating. So, here goes:

Huguette Clark grew up fabulously wealthy. Her father was one of the original Robber Barons of the 1880’s, the kind of man who could have been a regular in HBO’s Deadwood. At the very least, he certainly had a close resemblance to Charles Foster Kane. Mark Twain once said, “he is as rotten a human being as can be found anywhere under the flag.”

Huguette was born in 1905. She was a New York City debutante and socialite into the early days of the Depression, then … pfft, she did what would be referred to today as ‘going off grid.’ She didn’t disappear, she didn’t become a recluse per se, but she stayed out of the New York newspapers’ society pages and just kept to herself.

She was an artist (an excellent painter), collected dolls on an almost unimaginable scale, and lived her years in three apartments – with a total of 40 rooms – overlooking Central Park, despite the fact she owned large estates in California and Connecticut. Her father had gifted part of his vast collection of art to the Corcoran Museum in Washington D.C. in the 1920’s, yet her apartments were still jammed with priceless art, rare musical instruments, amazing jewelry.

In 1991, Huguette was admitted to Beth Israel hospital with skin cancer. She was successfully treated, the hospital tried to discharge her and she refused to go. Although her health was fine, Huguette stayed at Beth Israel until her death in 2011. It’s estimated she paid up to $400,000 a year to stay.

Huguette had executed a will in 1929, months after getting married. The will left everything to her mother. Her marriage was dissolved months later, her mother died in 1963. Her mother left $3 million to the Corcoran (a wing is named after the family), Huguette, the last surviving direct heir of the Smith fortune, inherited everything. In 1963 the estate was worth about $700 million in today’s dollars.

Huguette may have been a semi-recluse by 1991, but everyone, even in those pre-Google days knew she was an heiress. Over the last 15 or so years of her life, Huguette gave away millions upon millions. The Corcoran received cash and paintings; her primary physician millions; her nurse millions more including the proceeds from the sale of a Cezanne in 2000 ($10 million); the hospital received cash and a Monet; her accountant, personal assistant, and lawyer hundreds of thousands.

All along it appears she was pressured to make a will. At one point the president of the hospital had his elderly mother visit with Huguette and extol the virtues of a will. Finally, in March 2005 Huguette executed a new will. It was simple and to the point – $5 million to her nurse, everything else to be disbursed as if she had died intestate. That meant it would be split evenly between the 21 grandchildren and great-grandchildren of her deceased half-siblings.

All fine, good, simple … except that a month later she executed another will. This one was vastly different. It specifically excluded the family. All twenty-one of them. She created created an art museum and foundation out of the California mansion. All the art work, except a Monet she personally bought in Paris in the early ’20s, was to go the museum along with some cash. The rest was set to go to the hospital and her advisers and nurse. Both wills either accidentally or purposefully wiped out the trust to the Corcoran.

Huguette died just before her 105th birthday in 2011. She had been formally diagnosed with dementia in 2010. Gifts continued unabated almost to her death.

Regular readers of our blog can guess what happened next, when the existence of a will was revealed. And then the existence of the will executed a month earlier. It got crazy, quick. Within weeks seventeen law firms were involved in litigation. A court appointed administrator for the estate promptly moved for the return of all the gifts given by Huguette since she took up residence in the hospital. Tens of millions.

The Huguette estate was valued at just over $300 million. Less than half of what she inherited.

That’s still rarefied air, but the questions raised are very commonplace. Whats the difference between incompetence and eccentricity? Between gifting out of gratitude and being pressured to give? Between executing a will on one’s own volition and executing a will to appease a friend/confidant?

It may all just come down to this – where’s the line where generosity ends and undue influence takes over?

If you have any of these questions, please feel free to call a member of our team and schedule a consultation with our office.