July 15, 2008

Helmsley Left Dogs Billions in Her Will

by STEPHANIE STROM (New York Times - July 2, 2008)

Buzz's Comment:

If Leona Helmsley's intent, as set forth below, is upheld, which is a strong possibility, the billions of dollars mentioned below would create a major change in funds available for animal shelters, animal welfare agencies, veterinary schools, etc. throughout the United States.

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Sure, the hotelier and real estate magnate Leona Helmsley left $12 million in her will to her dog, Trouble. But that, it turns out, is nothing much compared with what other dogs may receive from the charitable trust of Mrs. Helmsley, who died last August.

Her instructions, specified in a two-page “mission statement,” are that the entire trust, valued at $5 billion to $8 billion and amounting to virtually all her estate, be used for the care and welfare of dogs, according to two people who have seen the document and who described it on condition of anonymity.

It is by no means clear, however, that all the money will go to dogs. Another provision of the mission statement says Mrs. Helmsley’s trustees may use their discretion in distributing the money, and some lawyers say the statement may not mean much anyway, given that its directions were not incorporated into Mrs. Helmsley’s will or the trust documents.

“The statement is an expression of her wishes that is not necessarily legally binding,” said William Josephson, a lawyer who was the chief of the Charities Bureau in the New York State attorney general’s office from 1999 to 2004.

Still, longstanding laws favor adherence to a donor’s intent, and the mission statement is the only clear expression of Mrs. Helmsley’s charitable intentions. That will make the document difficult for her trustees, as well as the probate court and state charity regulators, to ignore.

The two people who described the statement said Mrs. Helmsley signed it in 2003 to establish goals for the multibillion-dollar trust that would disburse assets after her death.

The first goal was to help indigent people, the second to provide for the care and welfare of dogs. A year later, they said, she deleted the first goal.

Howard J. Rubenstein, a spokesman for the executors of Mrs. Helmsley’s estate, said they did not want to comment on the statement because they were still working to determine the trust’s direction.

Mrs. Helmsley, the widow of Harry B. Helmsley, who built a real estate empire in Manhattan, was best known for her sharp tongue and impatience with humanity. She became a household name when she was featured in glossy advertisements for the Helmsley hotels. “It’s the only palace in the world where the queen stands guard,” advertisements for the Helmsley Palace proclaimed.

But for many Americans, she later became a symbol of unbridled arrogance and belief in entitlement, particularly after she was convicted in 1989 of $1.2 million in federal income tax evasion, for which she was sent to prison. She was the subject of a 1990 television film, “Leona Helmsley: The Queen of Mean,” with Suzanne Pleshette in the title role, and at least three books.

When she died last year at 87, she left all but a few million dollars of her vast estate to what will become one of the nation’s dozen largest foundations when the probate process is finished. She had $2.3 billion in liquid assets when she died, according to the probate petition, and the disposal of her real estate holdings is expected to produce an additional $3 billion to $6 billion.

Even if the resulting total is at the low end of the estimate — $5 billion or so — the trust will be worth almost 10 times the combined assets of all 7,381 animal-related nonprofit groups reporting to the Internal Revenue Service in 2005.

The five executors of her will — Mrs. Helmsley’s brother, Alvin Rosenthal; two of her grandsons, Walter and David Panzirer; her lawyer, Sandor Frankel; and her longtime friend John Codey — have been preoccupied with disposing of the real estate.

They are also the trustees of the Leona M. and Harry B. Helmsley Charitable Trust and, according to the two people who discussed the mission statement, have fretted about the public outcry that disclosure of its terms might incite.

They have reason for concern: News last year that the biggest named beneficiary in Mrs. Helmsley’s will was Trouble, her Maltese, led to death threats against the dog, which now requires security costing $100,000 a year. But they also cannot sit on the liquid assets much longer without raising questions from the attorney general’s office, which oversees the use of charitable assets in New York State.

The trustees recently hired a philanthropic advisory service to help them figure out a way to remain true to Mrs. Helmsley’s intentions while at the same time pursuing broader charitable goals with her foundation.

Judge Renee R. Roth of Surrogate’s Court in Manhattan will also play a role. She has already demonstrated a willingness to be flexible, cutting the size of Trouble’s trust fund to $2 million, from the $12 million prescribed in Mrs. Helmsley’s will, and ordering that the difference be added to the pending charitable trust.

Judge Roth also agreed to a settlement between the trustees and two of Mrs. Helmsley’s grandchildren who were explicitly left out of her will. The agreement gave those grandchildren a combined $6 million.

There are many ways the trustees could spend the Helmsley money on dogs. National groups like the Humane Society of the United States and the American Society for the Prevention of Cruelty to Animals have programs dedicated to dogs, and many smaller local groups rescue abandoned and abused dogs.

Or the trustees could use the trust’s money to finance veterinary schools or research on canine diseases.

Her goal of helping dogs was not Mrs. Helmsley’s only posthumous quirk. In her will, she ordered that her tomb, in Sleepy Hollow Cemetery in Sleepy Hollow, N.Y., be “acid-washed or steam-cleaned” once a year.

She also made two grandchildren’s combined $10 million inheritance contingent on their visiting their father’s grave, requiring that a registration book be placed in the mausoleum to prove that they had shown up.