Court rules Helmsley Trustees can depart from donor's instructions

From The Chronicle of Philanthropy, February 2009

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.

© 2009