Posted November 1st, 2007

What Did Leona Helmsley Really Do?

When Leona Helmsley passed away in August, the national media had a field day at the departed “Queen of Mean’s” expense. Much ado was made over the fact that she disinherited two of her grandchildren and left two others less than she left her dog!

About the only kind words came, remarkably, from Donald Trump, who observed that “At least Harry Helmsley seemed to be happy whenever Leona was around, and isn’t that the most important thing?”

A closer reading of Leona Helmsley’s will reveals that her actions and intentions may not be quite as clear as what was reported in the press.

Trust for Trouble

Article One Section F of the Last Will and Testatment of Leona M. Helmsley states:

“I leave the sum of twelve million dollars ($12,000,000) to the trustees of the Leona Helmsley July 2005 Trust,…to be disposed of in accordance with the provisions of that agreement. I leave my dog, Trouble, if she survives me, to my brother…if he survives me, or if he doesn’t survive me, to my grandson…I direct that when my dog, Trouble, dies, her remains shall be buried next to my remains in the Helmsley Mausoleum…”

Based upon the language in the will, Ms. Helmsley established a trust that will apparently in some way benefit her beloved pet, Trouble, who was to be cared for by her brother or grandson. Nothing in the will actually states that any funds are “left” to Trouble. The terms of the July 2005 trust are not public. A reading of the remainder of her will, however, may shed light on what can be inferred regarding the eventual destination of the $12 million used to fund that trust.

Gifts for others

The “Trouble” trust is only a small part of the Helmsley legacy. In addition to providing for Trouble, as well as funds for the perpetual care and maintenance of the Helmsley Mausoleum so that it remains in “mint condition,” her will specifies that the bulk of her estate will be left for charitable purposes through the Leona M. and Harry B. Helmsley Charitable Trust. This trust is the residuary beneficiary of her estate and several other 5% charitable remainder unitrusts that were established for her brother and two grandchildren.

There is an interesting twist contained in the unitrusts established for her grandsons. In order to receive their 5% payments from their unitrusts, they are required to visit their father’s grave at least once a year. If they do not comply with this provision, their trusts are to be terminated and the remainder of the trusts distributed to the Helmsley Foundation.

These conditions for receipt of income may serve to call new attention to the fact that donors can place reasonable restrictions on the receipt of income from a unitrust. Just as so-called Crummey Trusts date from a famous case brought by a Mr. Crummey, we may now see increased use of what may be referred to as “Helmsley Provisions,” used by creators of trusts to dictate desired behavior on the part of their heirs. (See IRC section 664(f) for more information on what are known as “qualified contingencies.”)

All told, it has been estimated that as much as $2 billion will be devoted for charitable purposes. It appears that the “Queen of Mean” did have a charitable side. And now you know the rest of the story.

The publisher of Give & Take is not engaged in rendering legal or tax advisory service. For advice and assistance in specific cases, the services of your own counsel should be obtained. Articles in Give & Take may generally be reprinted for distribution to board members and staff of nonprofit institutions and other non-donor groups. Proper credit must be given. Call for details.

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