Heiress' $300 Million Estate Dispute Settled
Holland & Knight's highly experienced fiduciary dispute attorneys led complex negotiations that resulted in a settlement on the eve of trial in a two-year contentious probate case. At stake was an estate valued at more than $300 million with distant relatives of the reclusive heiress Huguette Clark challenging the validity of her Will, which she had executed at the age of 98. The relatives alleged that her attorney, accountant and nurse exerted undue influence to induce her to sign, from her hospital bed, the Will that left them out of her bequests. Holland & Knight filed the petition to admit the Will to probate and provided strategic counsel to navigate both interpersonal relationships and probate court considerations.
Huguette Clark was the daughter of former Sen. William A. Clark of Montana, who made a fortune in copper mining and was said to have been as wealthy as John D. Rockefeller. Although doctors said she was healthy and alert after recovering from cancer, she elected to reside in a New York City hospital room for the last 20 years of her life. While there, she developed a deep bond with the nurse who cared for her daily. Ms. Clark had no children or other close relatives (the distant relatives were the grand nieces and nephews and great–grand nieces and nephews from her father's first marriage). She valued her privacy and was seldom seen in public.
At age 98, she signed the seven-page Will that canceled a version that she had signed six weeks earlier. The earlier Will left the bulk of her estate to distant relatives, few of whom had seen her since the 1950s and most of whom had never met her. The new Will left much of her estate to the Bellosguardo Foundation, a charity she formed under the Will, and named after her beloved mansion in Santa Barbara, Calif., which she had maintained in pristine condition. She also made bequests to her nurse, goddaughter, the Corcoran Gallery of Art in Washington, D.C., and a few other individuals, including her lawyer and accountant. The new Will expressly stated that none of Ms. Clark's relatives were included as beneficiaries since she had little contact with them over the years.
After Ms. Clark's death in May 2011, 19 relatives and the Corcoran Gallery of Art asked the New York County Surrogate's Court to void the new Will, alleging that Ms. Clark was manipulated. The estate's executors — her accountant and lawyer — maintained that Ms. Clark was of sound mind when she signed the Will and that it represented her intentions for the disposition of her estate.
The New York state attorney general's office became a party to the litigation because of the Will's provision for charity and in order to determine if there had been any improper influence. There were also separate claims against the executors. All of this played out in the midst of a swirl of attention from news media across the country and even prompted two books about Ms. Clark, Empty Mansions by Bill Dedman and Paul Clark Newell (a cousin of Ms. Clark) and The Phantom of Fifth Avenue by Meryl Gordon.
The case was complicated because, while few people outside of the hospital saw Ms. Clark, there were many people with whom she had contact by phone and correspondence. Beginning in November 2011, Holland & Knight attorneys from the firm's offices in Los Angeles, New York, San Francisco and Tampa worked through the necessary discovery in such a large case. In addition to document discovery covering almost her entire 104-year life, during the summer of 2012, Holland & Knight conducted 54 depositions taken in three countries as well as in New York City and throughout California. Finally, in September 2013, five days after jury selection began, a settlement was reached.
Under the settlement, the relatives received $34.5 million. The nurse relinquished her claim to any bequests and agreed to return about $5 million of the $30 million of gifts Ms. Clark had given her over the years. The goddaughter received a bequest and the bulk of the estate went to arts organizations, including the newly formed Bellosguardo Foundation, which included her mansion in Santa Barbara. Manhattan Surrogate's Court Judge Nora S. Anderson called the settlement a "fair result," and the state attorney general said it ensured that Ms. Clark's "charitable wishes are fulfilled."