By Bill Dedman
Investigative Reporter, NBC News
NEW YORK – A California group agreed Friday to withdraw its legal appeal of a settlement over the $300 million estate of the reclusive heiress Huguette Clark, removing a major roadblock to dividing her copper fortune.
The estate of Huguette Clark from the book "Empty Mansions"
Believed to be a self-portrait, this unsigned painting shows Huguette Clark in her twenties. Most of her copper-mining fortune is going to charity.
As one obstacle fell, another one arose: Clark's physician, Dr. Henry Singman, filed an objection with the judge on Friday. Although he received $100,000 in the will as it was written, he remains subject to attempts to recover hundreds of thousands of dollars in gifts that Clark gave him while she lived. Although Clark's nurse was released from such claims, the doctor was not.
The settlement sets up an arts foundation controlling the Clark property in Santa Barbara, Calif., known as Bellosguardo. The Bellosguardo Foundation is the largest beneficiary of the will, as Clark directed, but with a twist: In a settlement reached early this week, the foundation wasn't set up in California but in New York, with the New York attorney general forming the first board of directors. After a California group objected, the attorney general changed the deal to give the Californians more authority.
In a concession, the office of New York Attorney General Eric Schneiderman agreed that the mayor of Santa Barbara will nominate seven members of the initial 10-member board of directors, to be appointed by the attorney general. Mayor Helene Schneider said in a written statement she was happy with the result.
"The negotiations led by the New York attorney general’s office ensure that the Santa Barbara community is well represented by creating the foundation board of directors in this manner," she said. "I believe the attorney general’s office worked to follow Ms. Clark’s wishes to the best extent possible under the circumstances, and respected the Santa Barbara community’s strong desire to see this property utilized in the public’s interest."
The goal, Schneider said, "is to open the Bellosguardo house and gardens to the public as a center that will foster and promote the arts. I believe this settlement gives our Santa Barbara community an amazing opportunity to create a magnificent organization that will significantly add to our strong artistic and cultural heritage."
One uncertainty, Mayor Schneider said, is how much it will cost to upgrade the 21,666-square-foot home for public tours. It sits on 23 cliff-top acres above the city's East Beach, and has been a source of legend and rumor in Southern California for years. Huguette Clark's last known visit to the property was in the early 1950s, though she received regular reports on its upkeep, insisting that everything be kept in "first-class condition."
Other seats on the board are reserved for Clark's California attorney, for the Clark relatives and for the family's favorite museum, the Corcoran Gallery of Art in Washington, D.C. Both the family and the Corcoran opposed Clark's will, but benefit from the settlement deal filed in court on Tuesday.
In addition to the Clark summer home, valued conservatively at $85 million, the new Bellosguardo Foundation will receive Clark's $1.7 million doll collection, which had been left to the nurse, and $4.5 million in cash.
Huguette (pronounced "oo-GET") Marcelle Clark was the youngest child of former U.S. Sen. William Andrews Clark (1839-1925), one of the copper kings of Montana, a railroad builder and one of the richest men of the Gilded Age. Huguette, born in Paris in 1906, was a painter and doll collector who spent her last 20 years living in simple hospital rooms. She attracted the attention of NBC News in 2009 because her fabulous homes in Connecticut, California and New York sat unoccupied but carefully maintained. (See all the stories in the NBC series.)
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. 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 settlement assumes that the Internal Revenue Service will cooperate by lowering the estate's tax bill. Clark was so relentlessly generous to her staff and friends that she died owing the IRS $82 million in gift taxes, with the bill rising $9,000 per day from penalties and interest. The settlement is premised on the hope that the IRS will forgive the penalties, estimated at $16 million to $18 million, because the settlement mostly benefits charities. If the IRS insists on collecting the penalties, that bill will lower the amount flowing to the foundation and could ultimately require it to sell the California property. On the other hand, the foundation could benefit if Clark's art collection sells for more than expected.
Clark's will stated emphatically that her relatives 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.
More details of the settlement are in this previous story from NBC News: Huguette Clark's $300 million copper fortune is divided.
Bill Dedman is the co-author of the new book "Empty Mansions: The Mysterious Life of Huguette Clark and the Spending of a Great American Fortune." The co-author, Clark's cousin Paul Clark Newell Jr., is not one of the relatives seeking her fortune.
Other stories in the Clark series:
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First published September 27 2013, 10:06 AM