The Inheritance Case That Could Unravel an Art Dynasty

A trial this September will determine if the family and their associates owe a gargantuan tax bill. The last time prosecutors went after the Wildensteins, several years ago, they sought €866 million — €616 million in back taxes and a €250 million fine, as well as jail time for Guy. The consequences could do more than topple the family’s art empire. The case has provided an unusual view of how the ultrawealthy use the art market to evade taxes, and sometimes worse. Agents raiding Wildenstein vaults have turned up artworks long reported as missing, which fueled speculation that the family may have owned Nazi-looted or otherwise stolen art, and spurred a number of other lawsuits against the family in recent years. Financial distortions have saved the family hundreds of millions of dollars, prosecutors allege, but their treatment of Sylvia could cost them far more — and perhaps lead to the unraveling of their dynasty.

In order to prove that Alec and Guy misled Sylvia about her husband’s estate, Dumont Beghi first needed to know what assets they did report. But because Sylvia had renounced her inheritance, she didn’t even have a right to that information. “Every deed, every bank statement, every inventory item in the estate and every document related to the succession of Daniel Wildenstein is in the hands of Guy and Alec,” Dumont Beghi says, and they did not intend to turn them over.

Dumont Beghi’s first step, then, was to ask a court to nullify the agreement Sylvia signed giving up her inheritance. Only then could she access details about Daniel’s estate. Fortunately, she had a compelling precedent to show the judge. Sylvia wasn’t the first wife the Wildensteins had tried to cut off by pleading poverty: Jocelyne Wildenstein, Alec’s first wife, was similarly cut out of the family’s fortune during her 1999 divorce, with Alec claiming he was an unpaid personal assistant to his father. Documents revealed at court in New York — where the couple primarily lived — valued the family’s art collection at about $10 billion. The judge in the case said that Alec’s income statement “insults the intelligence of the court”; he settled for a rumored $3.8 billion — which would be the largest divorce settlement in New York history. (Jocelyne denies that the settlement was $3.8 billion but did concede that it was “huge.”)

Dumont Beghi argued that if the family was worth billions then, there was reason to doubt that Daniel, who orchestrated the deal between Alec and Jocelyne, died in ruinous debt just two years later. The French court ordered Guy and Alec to hand over the declaration of Daniel’s estate. It included some properties in France, a few cars, paintings and bank accounts, altogether totaling €42 million. Dumont Beghi didn’t believe that figure was anywhere near the estate’s true value, but still, “It’s not nothing, for someone who died broke.” And it showed, Dumont Beghi concluded, that Sylvia had renounced her inheritance under false pretenses.

Dumont Beghi’s next move was to get her hands on Daniel’s medical records. She learned that he spent his final days in an unresponsive, vegetative coma — and yet apparently signed a contract selling his 69 thoroughbreds (including Sylvia’s) to his sons for a bargain price. In 2005, a court granted Sylvia’s request to nullify her renunciation. It was only the beginning of what Dumont Beghi has called her international “treasure hunt” for every stashed masterpiece, undeclared property and offshore account left out of Daniel’s estate.