Huguette M. Clark (the “Decedent”) died a resident of New York City on May 24, 2011, at the age of 104 years. The Decedent was the daughter of a United States Senator who came into office after amassing a fortune in mining and railroads. The Decedent spent the last twenty years of her life living in a New York City hospital. A cadre of private doctors, nurses and other members of her personal staff attended to the Decedent. The hospital’s staff, relatives or outsiders had no contact with her. The isolation of an elderly or infirm person is one of the common elements in cases of undue influence.
The New York City Public Administrator (“Administrator”) was appointed as sole administrator after an insider was removed. The estate is estimated to be worth in excess of one hundred million dollars ($100,000,000). Some estimates of the size of the estate are three times that amount. Unlike the matter of the Estate of Howard Hughes where a new will was offered for probate every week, there are only two wills being offered for probate.
The Administrator’s 71-page petition describes the Decedent as a recluse for decades, even before she entered the hospital at age eighty-five. The Administrator alleges undue influence by a small group consisting of caretakers and professionals. The Administrator is asking the court to impose a Constructive Trust against eighteen (18) individuals including the Decedent’s private nurses, accountant, attorney and two doctors, a group of in all. It is common in these cases that the persons providing care replace the natural objects of the wealthy person’s bounty.
These cases may also involve changes in well-established patterns of behavior. During her years before hospitalization, the Decedent averaged $40,000 a year in gifts. In contrast, consider that one nurse received gifts in excess of $16 million. The very large gifts began to flow after Mrs. Clark lost her hearing and most of her sight. What is also striking is the disregard of the law by certain professionals. The Decedent owed the IRS $5,000,000 in Generation Skipping Transfer Taxes (GSTT) on gifts made in 2000. GSST was imposed because the unrelated recipients are more than one generation (37.5 years) below the Decedent. Interest and penalties were piled on top of the unpaid tax.
A constructive trust is an equitable remedy imposed by a court upon the recipient of the property. Although the recipient has possession and title, the court is ordering the recipient to hold the property as a custodian for the rightful owner, in this case, the Estate. This case should be assigned reading to all law school students. It will, no doubt, be the basis of a movie in the not-to-distant future.