February 26, 2009
Court Rules Helmsley Trustees Can Depart From Donor's Instructions
By Maria Di Mento
A Judge with the Surrogate’s Court, in New York, has ruled that the trustees of the Leona M. and Harry B. Helmsley Charitable Trust do not have to limit the distribution of money to charities focused on the care and welfare of dogs.
The ruling is significant because it allows the foundation’s trustees to go against Ms. Helmsley’s wishes that the bulk of her estate be directed toward that purpose.
The ruling could set a precedent for charitable bequests, since it is likely to raise serious questions for many philanthropists as to how tightly trustees of their estates are legally bound to dole out bequest money to causes designated by the donor.
The ruling also raises questions for charities that might have been expecting money from Ms. Helmsley’s foundation.
‘Noble Purposes’
In the case of the Helmsley estate, one charity, the Humane Society of the United States, released a statement yesterday in response to the judge’s ruling that seemed to be directed toward the trustees.
“Leona Helmsley’s estate could still be used for noble purposes to improve the welfare of millions of dogs, should her trustees choose to honor her wishes fully,” Wayne Pacelle, the organization’s president, said in a news release.
In November Ms. Helmsley’s estate filed an inventory of her assets with the Surrogate’s Court of the State of New York showing that her estate is worth an estimated $5.2-billion, meaning her foundation will likely become one of the wealthiest in the country.
Ms. Helmsley, who died in August 2007, had directed in a mission statement she signed in March 2004 that her foundation support the care and welfare of dogs. The statement revoked a similar document she signed in 2003 that said she wanted her foundation to support not only the care of dogs, but also “medical and health-care services for indigent people, with emphasis on providing care to children.”
The estate is still in the process of being settled.
Ms. Helmsley’s assets include property, cash, stocks, and bonds. Given the current volatility of the financial markets, the value of the estate could change slightly.
However, after more than a year of silence on the subject, the trustees are now moving toward distributing some grant money.
Howard J. Rubenstein, a spokesman for the estate, said in a news release that the trustees plan to announce the first charitable grants next month.
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What is the point in setting up your giving guidelines if those who are left behind do not honour them?
All the more reason for people who are setting up these private foundations need to start talking to their trustees/family members and others so that the courts do not make the decisions for them after the fact. I think this case has started something down a very slippery slope.
— Gena Rotstein Feb 26, 12:23 PM #
The best way to manage this is for philanthropists to make as many gifts as they can while they are alive. This also gives the organizations an opportunity to thank and honor the donor during his/her lifetime.
— Sally Collins Feb 26, 02:30 PM #
It will be interesting to see if the court ruling is contested and also how the trustees implement the donors wishes. Ethics, integrity and legal implications aside, being a trustee means staying mission focused. The fact that the estate has billions not millions I am certain is why the trustees needed more flexibility for their required 5% distribution. Ms. Helmsley’s vision and generosity should be applauded. As a society these trustees also need to be thanked. It is stressful to go against donors wishes and seek more flexibility. But when our food banks are empty, our children are living in cars with their parents, when our citizens are out of work in record numbers the needs are great. I applaud the trustees for this leadership is truly needed and necessary.
— BBH Seattle Feb 27, 11:15 AM #
Subversion of the wishes of the dead in regard to distribution of their estates is nothing new. One New Jersey man left his estate to primate care (he owned over 100 primates at his estate) but his money ended up funding primate experimentation. It was Ms. Helmsley’s money and no judges or lawyers should be allowed to override her exoressed wishes. In cases where money is left to animal causes, these challenges are more likely to succeed than when funds are left to human-oriented or disease charities. The Helmsley case could be a disastrous precedent.
— Shirley McGreal Feb 27, 07:01 PM #
There are many ways Mrs, Helmsley’s money could be used to help animals and people. Think of help for families who cannot afford vet bills;assistance animals; therapy animals, etc. Even if her mission statement wasn’t legally binding, her intent was very clear. The decision not to require that some of her money be given to animal welfare is unjust, unwise and unethical, It is simply wrong!
— MRJ Mar 2, 12:24 AM #
The bigger the money, the uglier the human behavior. This sort of thing happens ALL the time—but not big enough money to bother reporting.
— Susan Doelger Mar 6, 02:02 PM #