October 12, 2007

One doesn’t have to believe in the paranormal, to believe that the deceased can speak to the living from the grave. Messages from the beyond are routinely conveyed to the living with no assistance from psychic mediums. This is achieved through the reading of the recently departed’s wills and instructions. Through this process, the deceased can convey powerful messages to heirs and or to the world at large. In fact, posthumous messages can have a profound impact on individuals, entire families, organizations, etc.

We read the will carefully at our Law Firm and there is no actual indication that she left this amount to the dog. In fact, she left the $12 million to the “Leona Helmsley July 2005 Trust.” The terms of this private trust are unpublished and unknown. Since the $12 million bequest to this trust was made in the same section of the will in which she leaves her dog to her brother, it is widely assumed that the Trust is a “Pet Trust” for Trouble. But no one can confirm that. Additionally, even if it is a Pet Trust, we certainly have no way of knowing the terms of the Trust; how much is to be spent on Trouble, etc.

But rather than spoil the media brouhaha surrounding Leona and what could be the world’s wealthiest canine, let’s run with the $12 million story and keep the party going. As is usually the case with celebrity wills, there is much to learn from Leona’s will (for my analysis of the will of Ray Charles-see newsletter 8/16/05…for Janis Joplin’s will see 8/31/06) As is also the case with many of the wills of the rich and famous, seemingly obvious errors and poor guidance on the part of the estate planning attorneys involved, are difficult to fathom.

WHY DIDN’T LEONA KEEP THE DETAILS OF HER ESTATE PRIVATE?

By creating a typical Revocable Living Trust that our Law Firm creates every day, Leona could have kept all the terms of her will private. She and her lawyers had to know her will would create a media circus. Why would they choose to allow everything to go public…

My conclusion? Leona was using her will, as many prominent individuals often do, to send a public message to the world about herself. And what was the nature of that message? Perhaps the disgraced “Queen of Mean” intended to rehabilitate her reputation and show the public that she was, indeed, a good person, one who cared about her loyal dog, her deceased husband Harry (gold wedding band “never to be removed from my finger”), her deceased son (must be visited by grandchildren in order for them to receive their inheritances,) her chauffeur ($100,000 to Nicholas Celea) and the world (she bequeathed her billions to charity).

BUT THE WORLD GOT A DIFFERENT MESSAGE

The message that the world picked up—by way of our sensationalistic, tabloid style media, was that Leona was indeed the witch she was suspected to be; she left her dog more than the favored grandkids; she disinherited 2 other grandchildren; she is micromanaging from the grave (the 2 grandchildren eligible for inheritance must visit their father’s grave or they forfeit every thing); the dog is a spoiled terror known for nastiness and mauling Helmsley staff members.

LESSONS FOR OUR CLIENTS AND FRIENDS; HOW TO HAVE A MORE EFFECTIVE ESTATE PLAN THAN HELMSLEY…

1. Irrevocable and Revocable Living Trusts can keep your affairs private---

Your wills are subject to Probate and public scrutiny— Trusts that you can create during your lifetime, in place of a will are not; they bypass the probate process as well as keep your affairs private.

With the advent of Internet search engines, and the potential for the worldwide dissemination of personal information, the privacy issue has become a major concern in recent years. The Revocable Living trust is a strategy we would now recommend for that reason alone. With the added advantages of avoiding the substantial expense, time and aggravation associated with the probate process, the streamlined disability provisions, and the ability to maintain better control over your estate, we are strongly recommending a Revocable Living Trust as a key component of any estate plan.

2. Leona’s “Incentive Trust” for the grandkids was ill conceived—you can do better!

Leona’s requirement that her grandchildren visit their father’s grave at least once a year in order to receive their inheritances does not seem to serve any useful purpose. “Incentive trusts” such as this one, usually provide pre-conditions meant to lead heirs in the direction of a more meaningful, or successful life. Why compel kids to visit a grave? What constructive purpose does that serve?

Our Law firm often uses “Incentive Trusts” in what I consider to be a more sensible, beneficial manner. For example, inheritances can be made contingent upon an heir’s completing college, or Graduate school; or provisions can be included for distributions to pay for the purchase of a first home, or to pay for a wedding, or for travel to Rome or Jerusalem for a religious experience, etc. Incentive Trusts can be very useful and meaningful---that is if they are properly and thoughtfully conceived.

3. Talk to your Trustees, Personal Representatives, etc. about the jobs you are giving them.

Apparently, if what I read in the newspapers is correct, Leona’s brother Alvin doesn’t want any part of the pooch, Trouble, that was left under his care. It seems that Trouble is too much trouble for the 80 year-old guy!

Often, people create trusts and wills and give duties that are created upon their deaths, such as Trustee, Guardian, Personal Representative, etc., to family members and trusted friends without consulting them. Guess what? They may be flattered by the honor but have no desire to undertake the responsibility. We see this all the time. We also see many cases where a family member who was not selected feels hurt or angry. Therefore, it is highly advisable that you inform folks about the job that awaits them, or does not, in the event that you pre-decease them. Mrs. Helmsley’s attorneys were remiss in not having her obtain the consent of her brother prior to bestowing the special honor of caring for the dog upon him.

4. Watch your message—don’t trust the written word.

Ever send an e-mail with a message that ends up being misinterpreted? ---Every day, right? If you are lucky, you get the chance to correct the misunderstanding and explain what you really meant. This is not the case with your final wishes. You will never get a second chance to explain what you really meant.

With written messages there is a great potential for mis-communication and a harmful result. That is why it is better to communicate your special feelings in person, while alive. If that is impossible, choose your words carefully, have them reviewed by other people you trust, and by all means keep things private.

POOR PLANNING, OR DID SHE JUST WANT TO GIVE US MORE TO TALK ABOUT...

Throughout her life, Leona Helmsley’s over–the-top actions and behavior were scrutinized by the media. By unnecessarily exposing her personal estate planning details to the world, she has managed to give us new material to dissect and talk about, even after her death.

Or, perhaps I am being naïve, and this was all intentional on her part. Perhaps, she was such a narcissist that she wanted to ensure that she would continue to be the center of attention…  even after she was gone…

Austin A. Frye, MBA, JD, CFP

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