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Readers Respond to Helmsley’s Historic Bequest

March 13, 2009

(March 16, 2009) AFP eWire recently asked for reader feedback about the use of Leona Helmsley’s $5.2 billion bequest and the ramifications for donor intent.

In an unusual case that is raising eyebrows among fundraisers and donors alike, a court defied Helmsley’s wish for the bulk of her $5.2 billion estate to be directed solely to the care and welfare of dogs. Although a mission statement she signed in 2004 revoked a statement about money going to human services, Helmsley did add to the final mission statement the phrase “and such other charitable activities as the trustees shall determine,” as reported by The New York Times.

Here is what members had to say about the situation. (The original story can be found here.)

Reader responses:

"As much as I celebrate these funds becoming available for humanitarian purposes, I am deeply concerned that this court action seems to undermine the longstanding support for donor intent as the determining factor for how contributions are used.  This is likely to be viewed – years from now – as a ‘camel’s nose in the tent’ creating an avalanche of unappreciated ramifications for the philanthropic community." 

—M. Kent Stroman, CPA, CFRE , president, Stroman & Associates, Bartlesville, Okla.

* * *

"While we all feel that a donor’s wishes should be followed in the subsequent distribution of a bequest, it may be well to pause and reflect on the question of totality. When a bequest as large as Leona Helmsley’s is so narrow in scope as to be open to question then maybe there needs to be some tolerance for court intervention.

In this case, since it is the Trustees who brought the motion into question, this may reflect the exception to the rule. Each case must be viewed accordingly.

I speak from the point of view of one of several charities who are collectively challenging a will that was rewritten three or four times in the last three or four years of the person’s life and subsequently eliminated all charities from the final will. The courts to-date have seen fit to send this to mediation as a result of our challenges."

—Jim Allen, ACFRE

* * *

"If a donor’s wishes cannot be honored after the person passes away, then why should the person designate such gifts?  The person’s wishes should be honored. It was their money to begin with,"

—Nyla Ptomey Ph.D., director of development and stewardship, Lubbock, Texas

* * *

"As long as Mrs. Helmsley indicated that the trustees could also support “such other charitable activities as the trustees shall determine,” I don’t see this decision as negating donor intent. If she wanted to limit support only to animal welfare, she could have done so. The language of the mission statement clearly seems to give the trustees wide discretion." 

—Dennis W. Fliehman, president and CEO, Capital Region Community Foundation, Lansing, Mich.

* * *

"Legally, it should ride on the form and circumstances of the revocation statement. If it was not formally done, then it probably is not at all binding. This may be a case of bad facts making bad law. With a narcissistic and self-willed personality like Leona Helmsley, I can see that she may well not have observed the legal niceties that would have made the revocation fully binding on the trustees. 

With a better-advised and more observant trustor, however, it can easily be said that a clear intent in the will or trust instrument to leave their money for dogs, cats, or the building of a hotel on Mars, could easily be fully enforceable.

Hopefully, this case will not establish a bad precedent for trust and will interpretation in the future.

As you could probably tell, I am a lawyer who 'retired' to the nonprofit world."

—J C Stromberger, executive director, Lifetime Recovery, San Antonio, Texas

* * *

"According to your report, Mrs. Helmsley deliberately declined to make the canine limitation legally binding, and she also included a clause that allowed for "other charitable activities."  Therefore the court decision to permit grants to other charitable purposes seems proper."

—Cecil Phillips, management consultant, Baton Rouge, La. 

* * *

"I think the lesson to take away from the legal overturn of Leona Helmsley's final wishes is to be as careful as possible when crafting that final document. If the true intentions are not guarded, there will be many ways around the last request—especially when you're dealing with billions of dollars and members of the family.  If she wanted it to go to the dogs, she should have stated so unequivocally. The dogs could use it just now. Too bad."

—Lynn R. Terelle, director of development for Recording for the Blind & Dyslexic in Massachusetts

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