Estee Lauder CEO Splits with Wife of 22 Years 0

Estée Lauder CEO/president William Lauder and his wife of 22 years, Karen Lauder, announced their separation this week. The couple has two daughters. William Lauder, though, has a two-year-old daughter named Djuna with another woman, Taylor Stein. This situation has caused Lauder to rack up some undoubtedly large legal bills.

Apparently William Lauder and Stein signed a contract to keep Djuna’s existence quiet, minimizing any friction her existence could cause in his marriage and with his parents. Lauder 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, alerting him six weeks in advance before any such trips.

Stein is now suing Lauder for the $500,000 a year. She alleges that he stopped paying her in January. Lauder’s lawyers claim Stein breached the agreement by introducing the baby to William Lauder’s parents, Leonard and Evelyn Lauder. Lauder has even filed a counterclaim against Stein, alleging that she violated a confidentiality agreement in their contract by telling gossip columns about the child.

Stein’s family law attorney Edward Hayes claims that Lauder visited Stein and Djuna last year in California and saw them again during a visit to New York. Stein claims that it was Lauder himself who arranged for his mother to meet the toddler. Hayes also claims that it was Karen Lauder, not Stein, who disclosed the paternity of little Djuna to the media. He argued that the entire agreement was orchestrated by Karen Lauder to keep William Lauder and their daughters from knowing the newest family member.

Lauder’s spokesperson says that he continues to pay child support. And $500,000 a year in child support is not taxable as income to Stein – a nice living for sure.

Based solely on Lauder’s family money, I would venture to guess that he and Karen had a prenuptial agreement to protect the Lauder family fortune. I do wonder if there is a fidelity clause in the agreement – if so, Lauder’s extramarital activities could cost him even more than $500k a year to Stein and half of his marital assets to Karen. It will be interesting to see how this situation turns out.