High-Profile Example Highlights Need for Clarity in the Estate Planning Process

Perhaps no New York estate planning effort has received more attention over the past few years than that of well-known New York hotelier Leona Helmsley. Upon her death in 2007 a scramble ensued to determine what would happen with her estate, estimated to be worth billions. As a post yesterday at Financial Planning explains, the subsequent way in which her assets were divided imparts lessons for all local residents, regardless of the size of their estate.

Mrs. Helmsley’s wishes captured the public attention when it was revealed that the she left $12 million to care for her dog, Trouble, and created a charitable trust worth billions to be spent primarily for the care and welfare of dogs. Mrs. Helmsley’s wishes were placed in a “mission statement” where she explained that she desired the trustees to use their discretion to disperse funds first for the care of dogs and only secondly for “other charitable activities as the Trustees shall determine.”

But there were concerns about the legal effect of the intentions placed in the statement. For one thing, the statement gave the trustees discretion to spend the resources. On top of that, the statement was never incorporated into her will or other trust documents.

As a result, the trustees have been given the power by local judges to essentially disperse the charitable trust funds in any way they wish. So far the trustees have donated $450 million to charity; of that amount only $100,000 has been given to dog-related efforts. That constitutes less than one fiftieth of one percent–hardly an amount which would indicate dog welfare as the main priority suggested in Mrs. Helmsley’s mission statement. Several animal charities sued to force a larger share of the trust given to animal efforts, but their legal efforts have been unsuccessful.

The overarching goal of all New York estate plans is to ensure that an individual’s specific wishes are carried out when they won’t be around. However, without a clear, consistent plan a judge usually decides what happens to an estate, regardless of one’s actual wishes. Even when some planning is done, as in this case, confusion may remain unless those planning documents are updated and integrated so that there remains no ambiguity about how to handle affairs.

The lesson of this situation is clear: get in touch with a New York estate planning lawyer to ensure that your wishes will actually be carried out as you desire. Only professional advice and legal work can ensure that everything is done to avoid complications such as the ones that occurred in the case of Leona Helmsley. After a lifetime building an estate, it is important to pass on your assets in the way that you actually chose.

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