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Proposed Settlement of Huguette Clark Estate Would Fund Arts Foundation

However, the heiress died owing $82 million in gift taxes plus penalties, and her Santa Barbara mansion may have to be sold

There is a proposed settlement in the court fight over heiress Huguette Clark’s $300 million estate that would preserve the Santa Barbara mansion and create a foundation for the arts.

However, it’s possible the Bellosguardo oceanfront estate may have to be sold just to cover the costs of the settlement, according to Bill Dedman, investigative reporter for NBC News.

Clark was the daughter of William Clark, a copper tycoon and Idaho senator at the turn of the last century who made his fortune from copper mining, banks and railroads. When Clark died in May 2011 just before her 105th birthday, a legal battle started over her two wills signed six weeks apart. Distant relatives from her father’s first marriage were cut out of the April 19, 2005, will and questioned the influence of Clark’s attorney and accountant in her later years.

Increasingly reclusive over the last decades of her life, she lived at Beth Israel Medical Center in New York for more than 20 years even as her Santa Barbara estate was said to be maintained at the ready for her arrival at any time. She reportedly hadn’t visited the Cabrillo Boulevard property in more than 50 years.

The proposed settlement would create a New York nonprofit corporation with the purpose of fostering and promoting the arts, with procedures established by the New York attorney general. The foundation would be given the Santa Barbara estate, Clark’s $1.7 million doll collection and $4.5 million in cash, according to the court documents obtained by Dedman.

Since Clark died owing $82 million in gift taxes plus penalties, the estate could have to be sold to fund the settlement unless the Internal Revenue Service forgives the penalties, Dedman reported.

Local leaders have called for the estate’s preservation and formed the Friends of Bellosguardo — a community group committed to getting the foundation created

A California corporation named Bellosguardo Foundation already has been established and is headed by Clark’s California attorney James Hurley Jr., former Santa Barbara mayor Sheila Lodge as secretary and Robert Emmons as chief financial officer.

The foundation hired representation through Price, Postel & Parma and New York-based firm Withers Bergman to represent its interests during the court proceedings. 

On Sept. 20, the surrogate court judge ruled that the Bellosguardo Foundation and Hurley cannot participate in the probate proceedings, which the foundation appealed on Monday, according to Lodge, who is also the co-chair of Friends of Bellosguardo.  

Lodge is one of the few people who toured the estate, after she started exchanging Christmas cards and notes with Clark. Even though the home is a landmark — designed by The Biltmore’s architect Reginald Johnson — it’s not open to the public.

The settlement — if signed before jury selection for the trial reconvenes on Tuesday — would also give $34.5 million to the relatives: great-grandchildren and great-great-grandchildren of William Clark and his first wife, Dedman reported.  

Clark’s longtime nurse, Hadassah Peri, received millions of dollars in gifts from Clark during her lifetime and will pay back $5 million in the settlement.

The Corcoran Gallery of Art in Washington, D.C., will get at least $10 million and some people — such as property managers — will receive what the last will said.

Clark’s attorney,Wally Bock, and accountant, Irving Kamsler, were investigated in relation to handling her finances but were never charged. They would receive nothing under the settlement, according to court documents.

Attorneys involved in the will dispute would receive millions of dollars in fees if the settlement goes through.

Noozhawk staff writer Giana Magnoli can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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