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What Did Leona Want?

August 12, 2009

Trust_instrument Word that three prominent animal welfare organizations have petitioned Manhattan Surrogate Court to intervene in the matter of Leona Helmsley's $5 billion estate shouldn't surprise anyone who has followed the story in PND or here on PhilanTopic.

According to the suit, a two-page "mission statement" drawn up by the hotel heiress before her death in 2007 expressly stated that her trust be used for the care of dogs and general charitable purposes. She also left $12 million for the care of Trouble, her beloved Maltese.

After her death, the five trustees -- Helmsley's brother, two grandsons, her lawyer, and a longtime friend -- and the New York attorney general's office filed separate motions in Surrogate's Court arguing that the so-called mission statement did not limit the trust to the purposes stipulated by Mrs. Helmsley. Earlier this year, Judge Troy K. Webber agreed, ruling that the trustees could "apply trust funds for such charitable purposes and in such amounts as they may, in their sole discretion, determine."

And that's what they did. In April, the trustees announced the first round of grants from the Leona M. and Harry B. Helmsley Charitable Trust -- $136 million to a variety of tax-exempt institutions and nonprofits, including $40 million to support the creation of a digestive diseases center at New York-Presbyterian/Weill Cornell Medical Center; $15 million to various healthcare systems in South Dakota; $6.6 million to Joint Aid Management USA to support construction of a food factory and warehouse to help provide food aid to local communities in southern Africa; $2 million to the Cornell University School of Hotel Administration to create a Helmsley Scholarship; $750,000 to the National Geographic Society to help create a conservation fund for the Galapagos Islands; and $350,000 to the Rabbi Arthur Schneier Park East Day School. The trustees also awarded a total of $1 million to ten dog-related organizations -- $900,000 of it to groups that work with seeing-eye dogs.

Animal welfare groups cried foul. "Mrs. Helmsley's Trust Agreement and Mission Statement were clear: Help dogs. And the trustees have not done this, and instead pursued their own agendas with Mrs. Helmsley's money," said Wayne Pacelle, president and CEO of the Humane Society of the United States, one of the groups (along with Maddie's Fund and the ASPCA) filing the suit.

In other words, the suit is about donor intent. Okay, it's about money, too. But more importantly, it's about whether "the courts are willing to enforce donor intent," especially when it involves dogs and their welfare. Or, as Rich Avanzino, president of Maddie's Fund, the nation's largest animal welfare organization, put it in the same statement: "Literally hundreds of millions of dollars that have been willed by people nationally who cared about dogs have not gone to provide for dogs as was intended. The ignoring of donor intent in this country has become an unspoken national shame."

I'm sympathetic to that argument -- even if it's weakened by the fact that the three animal welfare groups involved in the suit are at pains to distance themselves from the eight-figure bequest to little Trouble. That's a totally separate issue, said Pacelle in a press conference yesterday to announce the legal challenge, leaving unsaid what many people no doubt think: Directing $5 billion to animal welfare groups -- or even a "significant" portion of that amount, say, $2.5 billion -- might be as irresponsible as leaving $12 million to a single dog. (In June, it was revealed that Manhattan surrogate court judge Renee Roth, with support from the New York AG's office, had knocked $10 million off the $12 million award to Trouble.)

Not surprisingly, the trustees of the Helmsley Trust agree that it all boils down to donor intent; they just don't agree on the petitioners' interpretation of Mrs. Helmsley's intent. Indeed, a statement on the trust's Web site goes to some length to make that point:

Did Leona Helmsley intend for this charitable trust to focus on the care and help of dogs, rather than people? Absolutely not. Have the trustees of this vast fortune acted improperly and ignored Mrs. Helmsley's instructions? Again, absolutely not....

Then, after seven paragraphs detailing evidence and arguments in support of this assertion, the statement closes thusly:

One final thought. Mrs. Helmsley was not known for reticence. Here, her actions spoke as clearly as the words of the Trust documents. In the eight years between the formation of the Trust and her death, Mrs. Helmsley contributed (as the sole trustee of this Trust and otherwise) over $55 million to charitable causes; of that amount, she made only one gift to a dog-related charity, for one thousand dollars.

Even more telling is this: The claim that the Trust was established for dog-related purposes relies on a document entitled "Mission Statement" signed by Mrs. Helmsley in 2004. Between her signing that document and her death -- during which time she alone controlled the Trust -- Mrs. Helmsley and the Trust gave over $29 million to charities; of that, the amount she and the Trust gave to dog-related charities was exactly zero.

Okay, so these kinds of disagreements are not unusual when large fortunes are at stake. And Pacelle and Avanzino raise an important point when they argue, as they did in their press conference, that judges, lawyers, and trustees -- most of them men -- are often quick to ignore the wishes of wealthy heiresses, especially when those wishes involve large amounts of tax-advantaged dollars being directed to the care and succor of animals.

But this particular situation is not casting any of the parties involved in a particularly flattering light. It's time for the New York AG's office, the Helmsley trustees, and the animal rights groups that filed suit to sit down and work out a compromise.

-- Mitch Nauffts

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Posted by Matt  |   August 13, 2009 at 04:22 PM

There seems little to compel the trustees or the AG's office to meet with the animal welfare groups. The AG sided with the Trust in its decision, and the Trust has made it clear what they believe is right. The only options the animal groups had were to sue or accept the judge's decision. Neither seems likely to change things. I can only imagine that the supporters of the organizations felt they were being left outside in the rain on a leash. (Sorry, I couldn't resist.)

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