William Lauder and Wife Split
In a surprise to no one, Estée Lauder CEO/president William Lauder and his wife of 22 years, Karen, have separated and are divorcing. The couple has two children, but it is William’s third child, born to William and his non-wife Taylor Stein, that may be the cause of the divorce. Per the New York Post, Taylor is now suing Lauder for the $500,000 a year she says he promised her in a contract if she moved to LA and stayed away from his family. Lauder’s lawyers claim Stein breached the agreement by introducing the baby to her grandparents, Leonard and Evelyn Lauder.
Apparently William tried to minimize the friction his out of wedlock child with Stein could cause in his marriage by making an agreement with Stein. He bought Stein a house in California and agreed to pay her $500,000 a year in child support through the year 2017. In return, Stein agreed to stay away from his family, and not come to New York for more than two weeks a year.
Child support, unlike alimony, is not taxed as income to the receiver, so by classifying the $500,000 per year payments as child support, Lauder was bearing all of the tax consequences and Stein was receiving the money tax free.