Boston
A case filed in New York’s state court is pitting the heirs of millionaire art collector Lee Eastman against the children of his late wife Monique, raising questions about the position of works of art placed by one spouse in trust for the other.
Both Monique Eastman and Lee Eastman had children by their first marriages, but none together. Their spouses died within three years of each other, in 1959 and 1962 respectively; the couple met and married shortly after that. Mr Eastman, a powerful entertainment lawyer whose daughter Linda married Paul McCartney and whose clients included David Bowie, died in 1991, aged 81. Mrs Eastman survived a further 14 years, dying in 2005, also aged 81.
The difficulty has arisen because Mr Eastman left the bulk of his estate in a “marital trust” for Monique, an arrangement often used in the US to defer estate tax until the surviving spouse dies, and to provide him or her with a lifetime income. But Mr Eastman included significant works of art in the trust, which had Monique and his son John as its trustees. On Monique’s death, Lee Eastman willed the capital in trust to his four children, but did not name Monique’s as beneficiaries.
In a lawsuit filed at the end of last year, Monique’s children are complaining that the art—valued at $15m in 1991—was left sitting in the trust and so did not produce any income (which would have had to be paid to Monique under US law).
Monique’s children, Peter, Philip and Paul Sprayregen, claim that if the art had been sold and invested, she would have received an additional $8.3m over 14 years, which would in due course have passed to them. Instead, they allege, John Eastman, as trustee, continued to “hoard” the art until Monique’s death in 2005, when he sold works for over $60m at auction.
The claims are part of the ongoing legal proceedings brought by John Eastman to wind up the marital trust.
Monique’s children further argue that John Eastman denied Monique the use and enjoyment of the art by “removing all of it from Monique’s homes and placing it in storage”. They allege that he controlled the trust, knowing that Monique relied on his advice and judgment, and that he had conflicting interests in his dealings with her.
John Eastman disagrees. He points to a failed attempt in 2006 by Monique’s children to sue him for placing art in the marital trust which they say belonged to Monique, not Lee. The court threw out that case in January 2007, saying that Lee Eastman’s estate had already been settled by Monique and John as co-executors of the estate. There was no indication that Monique signed documents “under duress”, the court said, including the estate inventory.
In this latest round of litigation, John Eastman is arguing that Monique’s children cannot sue him for his actions as she was a participating or acquiescing co-trustee. The plaintiffs have asked the court to add fraud allegations to the complaint, while John Eastman has asked it to dismiss the case. The court is expected to rule shortly.
Originally appeared in The Art Newspaper as 'Stepchildren at war'