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Kelly was openly gay. She publicly disclosed to being a "dyke" during the 1930s, when she disclosed to Motion Picture magazine she had been living with actress Wilma Cox for several years and had no intention of getting married. She later claimed she had an affair with Tallulah Bankhead when she worked as Bankhead's personal assistant.
She also performed in summer stock and nightclubs and, in 1955, toured the country with Tallulah Bankhead, a longtime friend, in the farce ''Dear Charles,'' which won her new ovations.