American Royalty – The Queen of Mean
Daughter of immigrants. Successful real estate investor in a male-dominated real estate game in the 1960s. Self-made millionaire. Three times divorced before meeting and marrying the love of her life – investment banker Harry Helmsley in 1972. With this union, Leona Helmsley oversaw the vast real estate portfolio of Harry’s investment firm including luxury hotels.
No one accused Leona Helmsley of graduating from charm school. By all accounts, she was foul-mouthed and ill-tempered. She relished firing employees for the least of reasons or no reason at all. In 1982, Leona’s son, Jay, died. Jay and his family lived in a house owned by Helmsley. Immediately after Jay’s funeral, Leona served Jay’s wife with an eviction notice for her and her children (Leona’s grandchildren) to vacate the house. Leona earned her monicker as the Queen of Mean who ruled her empire for decades.
The Helmsley’s were billionaires. In the early 1990s, they remolded their Connecticut estate with a construction price tag of $8 million. They deducted the full $8 million as business expenses as the palatial estate would be, at times, used to host business guests. The IRS disagreed, with the Helmsley’s charged with tax evasion, conspiracy and fraud. The Government did not proceed against Harry Helmsley due to his advanced age and health. They did succeed in securing a conviction against Leona and she received a 16 year prison sentence. Leona served 19 months in jail.
Harry died in 1997 leaving a $5 billion estate. Leona was forced to divest her beloved real estate holdings to a trust as a convicted felon, she could not own property which had a liquor license (all her hotels had liquor licenses). Most of the Helmsley holdings were tied up in a trust which did not provide for disbursements to relatives or family members. The trust was essentially established to benefit dog charities.
In 2004, Leona executed a 14 page Will which detailed all beyond her trust (about $25 million). 2 grandchildren were to receive $5 million so long as they visited Leona’s grave; and 2 grandchildren were disinherited “for reasons known to them”. Leona left $12 million to her dog, Trouble. In 2006, Leona executed a “Mission Statement” directing care for her dog with the remainder of her assets to then to be for the benefit of dogs in general. The last clause of her Mission Statement provided: “and such other charitable activities as the trustees shall determine.” The Mission Statement never became part of Leona’s Will. Leona died in 2007.
The disinherited grandchildren sued after Leona’s death. The 2006 Mission Statement caused sufficient ambiguity as to Leona’s intent and opened the door to claims that Leona suffered from undue influence of others or lacked capacity. The Court allocated $6 million to the benefit of Trouble, the dog, and $3 million to each disinherited grandchild. Further, the trustees argued that the final clause in the Mission Statement authorized them to consider other charities of their choice and not simply dog-related charities. The Court agreed.
Do not undue your well-crafted estate plan with Mission Statements, explanatory letters, or other writings. They may only cause ambiguities and allow others to assert claims such as undue influence or lacking capacity based on these subsequent acts. For Leona, she herself undercut her otherwise clear intent to disinherit 2 grandchildren. In fact, these two grandchildren did not even have to visit Leona’s grave as did the other two grandchildren.
For those with comprehensive estate plans, they appreciate the effort to arrange all as desired. Avoid having all your efforts being undone by ill-advised additional writings left behind. Estate plans can be changed, modified, or even disregarded. However, do it properly with assistance of counsel. Contact Estate Planning Attorney Michael Geiger at 901.219.5549 or at michael@geigerattoreny.com to properly prepare amendments or effectuate changes to your own plan.