Leona Helmsley’s Estate Creates a Stir in Nonprofit Sector

Nearly everyone is familiar with hotel mogul Leona Helmsley’s $12 million trust she willed to her dog, Trouble. What most people are unfamiliar with, however, is that the rest of her $5 – $8 billion estate may be left to a charity supporting dogs in need.

The New York Times (July 2, 2008) reported that Ms. Helmsley left a charitable trust with a two page mission statement that states she wants virtually all of her estate left to the “care and welfare” of dogs. Though the mission statement is not part of the will or trust documents, it is “the only clear expression of Mrs. Helmsley’s charitable intentions” and will therefore likely be respected or at the very least, addressed.

Once the probate process is finished, her estate will become of the nation’s largest foundations. According to The New York Times, her estate, if left entirely to the benefit of dogs, will “be worth almost 10 times the combined assets of all 7,381 animal-related nonprofit.”

While this may seem to be a watershed event in animal-related charities, attorney Jack Siegel, author of the Charity Governance Blog believes otherwise. Siegel states that to measure the impact of the gift, “the more appropriate measure is on income.” Of the $5 billion of Helmsley’s estate, only about 5% of it is required under law to be distributed, which would amount to roughly $250 million. The combined yearly income of just four other animal-related charities is equivalent to half of Helmsley’s potential income into the sector. Still, the income to be derived from Helmsley’s estate would undoubtedly be an immense contribution to help needy dogs, if her trustees do decide to proceed with Helmsley’s apparent intent.

Ambiguity still lurks within the mission statement, wherein one provision states that the trustees may use discretion in distributing the estate. That provision relates to the reason the trust documents and will are being kept private, for fear of public outcry. Should her trustees devote virtually the entire estate to the care and welfare of dogs or should the money be put to better use given to human-related charities? Siegel notes that the “prevention of cruelly to animals” is a legitimate purpose for a charity and that “each donor is entitled to have their intent respected” even if “[w]hat is one person’s charity is another’s frivolity.”

You can read The New York Time’s article here.

You can read the Charity Governance post here.

– Taleen Alexander