A recent lawsuit claims that the Getty family has avoided paying as much as $300 million in California taxes. The story also reveals how ultra-rich people’s financial tactics widen the wealth gap in America.
When the family struck oil, Jean Paul Getty was considered the richest man in the world in the 1950s. As his fortune grew, it was divided among different branches of the family. To date, the family’s total worth is unclear, but his son Gordon Getty is estimated to have about $2.1 billion. That’s all according to New Yorker Staff Writer Evan Osnos.
At the center of the lawsuit is Gordon’s secret affair with an LA woman, who had three daughters with him. This was made public in 1999, when the mother filed a suit to establish them as his legal descendents and heirs to his money.
“Gordon Getty acknowledged them and said he loved them very much, and then created a trust that would, in effect, cut them in on the family fortune,” Osnos says. “And the trust, according to the former wealth manager, who filed suit against them, and who has also been sued by them, she says that the trust is worth about $1 billion.”
Wealth manager Marlena Sonn was hired by two of Gordon’s daughters, Kendalle and Sarah Getty, who wanted to invest in more socially-responsible venues. Then, due to what Sonn described as dubious tax schemes, their relationship fell apart.
For a time, she went along with the appearance that they weren’t living in California, but eventually it became untenable, says Osnos.
“She said, ‘I can't be a part of this anymore.’ And she says that she went public for that reason. … It's so rare that a wealth manager decides to break with a client and speak publicly about their clients’ financial arrangements. It's one of the reasons why this is remarkable, because it gives you a window into these kinds of mechanics, the interior conversations inside a wealthy family.”
Osnos says the Getty family denies the illegality of the strategy, and they allege that the disagreement was instead based on Sonn seeking a bonus worth millions of dollars that they felt was unjustified.
The Getty case makes clear the disparity between the everyday families and the ultra-wealthy, he points out.
“The kinds of things that most Americans think about when it comes to paying their taxes — where do I live, how much did I earn in income this year, and how do I make sure I get this number correct when I send it in — is really not the kind of thing that you have to think about when you get to the high end of the income ladder. … People can more or less define how much they want to pay by deciding where they're going to spend their time — 183 days in one state or stay out of the state and make sure that your real estate is arranged in such a way that you don't actually have to be subjected to it.”
**Correction 1/26/23: A former version of this story suggested that the Getty family owns the Getty Center Museum. However, while J. Paul Getty founded and funded it with his endowment, the family does not own, finance, or operate the museum, which is a nonprofit.