NY Official Points Finger at Lawyer for Heiress, Calls $90M in Unpaid Gift Tax ‘Tip of the Iceberg’Home
Trusts & Estates
NY Official Points Finger at Lawyer for Heiress, Calls $90M in Unpaid Gift Tax ‘Tip of the Iceberg’
By Martha Neil
Dec 22, 2011, 06:42 pm CST
An accountant has stepped down from administering the $400 million estate of heiress Huguette Clark and a lawyer is expected to face questions in a Manhattan Surrogate’s Court hearing tomorrow, after the New York public administrator accused the two of failing to pay $90 million she owed in federal gift tax and penalties.
Representing the public administrator, attorneys David R. Gelfand and Peter Schram said in a petition (PDF) filed earlier this week that this alleged wrongful conduct by accountant Irving Kamsler and attorney Wallace Bock “is just the tip of the iceberg,” according to the Associated Press and the Open Channel page of msnbc.com.
The two, who were paid thousands monthly to oversee Clark’s affairs prior to her death in May at age 104, also took advantage of her financially in other ways, the filing and the heiress’ relatives contend. They point, for example, to the $500,000 she gave Kamsler and Bock in her most recent will, in 2005. Less than two months earlier, she had executed another will that gave most of her assets to family.
As estate administrators, they would receive some 2 percent or approximately $8 million, if paid a standard fee, the Open Channel article notes.
The filing by public administrator Ethel J. Griffin asks to have both Kamsler and Bock removed as administrators of the estate, contending that they are “unfit for the execution of their office” as executors, “by reason of their dishonesty, improvidence, waste and want of understanding.”
The filing says the two failed to pay gift and generation-skipping transfer taxes on Clark’s behalf from 1997 to 2003, even as she made over $50 million in gifts to individuals. It also contends they didn’t inform Clark of the tax debt she owed the government, even though she could have afforded to pay it, and filed federal tax returns from 2004 to 2009 falsing claiming that she had previously filed gift tax returns and paid what she owed, reports Open Channel.
However, a lawyer for the two executors, John Dadakis, said they properly advised Clark about the impact of her financial decision-making, and said she is not the first wealthy individual to give away her money to non-family members, the AP reports.
“Their entire, decades-long handling of her affairs was an ongoing effort to protect and preserve her chosen lifestyle and on her explicit instructions,” said Dadakis, insisting that “At all times, they were acting in their clients’ best interests.”
ABAJournal.com: “Heiress Huguette Clark’s Will Leaves $500K to Her Lawyer”
ABAJournal.com: “Relatives of Heiress Huguette Clark Accuse Lawyer and Accountant of ‘Plundering’ Her Fortune”