Hey there, Legal Tea Listeners! This is your host, Jenny Rozelle. Today, we’re on the “estate planning of the rich and famous” topic and for today’s episode, we’re going to dive into what happened following the death of Leona Helmsley, which some, if not many, may not immediately recognize her name. First, maybe I shouldn’t technically call her Leona – here’s why: Shortly after high school, she changed her name many times. She was actually born Lena Rosenthal, but changed it over the course of time, to Lee Roberts … then to Mindy Roberts … then to Leni Roberts … and finally to Leona Roberts (she later acquired Helmsley when she married a gentleman named Harry Helmsley – which we’ll get into in a minute). So, on these estate planning of the rich and famous episodes, she may just mainly go under the “rich” category since she wasn’t super famous. Leona, though, was most well-known for being quite the businesswoman and famously, she was called the “Queen of Mean.”
As always with these types of episodes, let’s dive into Leona first as a person – her upbringing, family, career, etc. so we have a better understanding of her before we dive into what happened estate-wise following her passing.
According to her Wikipedia page, Leona was born in the State of New York and ultimately after her family moved her a handful of times, they settled in Manhattan. At the age of 18, Leona married her first husband, Leo Panzirer, an attorney, and they got married in 1938 – though, ended up divorcing in 1952. Together, though, they had one child named Jay. Jay was Leona’s only child – and tragically, at the age of 42, Jay passed away of heart failure. Prior to his passing, Jay and his wife, Mimi, had four children. After Leona and Leo got divorced, Leona proceeded to marry Joseph Lubin. Leona and Joseph got divorced, but they found their way back to one another – because they got remarried after their divorce, but ultimately their second marriage came to and end as well and they got divorced a second time.
Then, in 1968, Leona met Harry Helmsley, who was then-married and was a condominium broker. In 1970, Leona joined one of Harry’s firms (called Brown Harris Stevens) and she joined as a Senior Vice President. Harry ultimately divorced his then-wife, and proceeded to start a relationship with Leona – and then in 1972, Harry and Leona got married. According to her Wikipedia page, “The marriage may well have saved her career as several of her tenants had sued her the year before for forcing them to buy condominiums. They won, and she was forced to not only compensate the tenants but to give them three year leases. Her real estate license was also suspending, so she focused on running Harrys growing hotel empire.” Just to name drop a few things that Harry, and now Leona, owned: 230 Park Avenue (Helmsley Building), the Empire State Building, the Tudor City apartment complex on the East Side, etc. That’s just naming a few. We’re talking that the value of these is in the billions of dollars here, people. Mega money.
Fast forward to 1983, when Harry and Leona purchased a mansion in Connecticut – long story short, they had a ton of work done on it and after a dispute about payment with the contractors, the contractors basically ratted out the Helmsleys by claiming that Harry/Leona had them invoice some of the hotels as “business expenses” which of course they weren’t business expenses to the hotels – that’s, kind of, textbook tax fraud. Anyway, so that led to some serious things like fraud, conspiracy, and tax evasion convictions. She/they got in a lot of trouble for sure. Throughout the court cases, Harry was showing very obvious signs of physical decline – and in fact, ended up getting declared mentally/physically unfit to stand trial, so Leona faced the charges alone. When all was said and done, Leona ended up spending about 21 months in prison.
Just a few years later, Harry ended up dying in 1997 and after he passed away, Leona inherited Harry’s entire large fortune – which was estimated to be in excess of $5 Billion Dollars (according to her Wikipedia page). A few of her close friends shared that after the court cases and Harry’s death, Leona really isolated herself and went into seclusion. She became estranged from her grandchildren, and just lived in her penthouse with her dog. While she was certainly known for being the “Queen of Mean” and for doing some icky things tax-wise (and there was even a case where the plaintiff, a former employee, alleged the only reason he was fired was because he was gay … well, he won and she had to pay him lots of money). But even though she was surrounded by some of these icky stories, she was also quite charitable, too, with her money – like, according to her Wikipedia, she donated $5 Million Dollars after the 9/11 attacks to families of NYC firefighters/police. She also donated $25 Million Dollars to a New York hospital in 2006 for medical research.
On August 20, 2007, Leona ended up dying from congestive heart failure – she was 87 years old when she passed away. After she passed away, a rather extensive estate plan was indeed located, which included some very specific, very unique provisions and terms. For example, according to her Wikipedia page, Leona didn’t really like dirt – so she actually left $3 Million Dollars for the mausoleum in which she was entombed to be washed or steam-cleaned at least once a year. That’s just one of a few pretty specific things that she had in her estate plan!
So, getting to her estate plan and what happened to a majority of her large estate…
I found a copy of her Last Will and Testament online (it’s linked in the source links for the episode) and it gives us a pretty good idea exactly what she wanted to have happen! For example, when I just shared that piece about $3 Million Dollars going for mausoleum upkeep – well, through her Will, she created what is called a testamentary trust (which is a trust fund created in a Last Will and Testament) and it was called the Helmsley Perpetual Care Trust. In that part of the Will is where she wanted the mausoleum to basically be kept in perfect shape and condition with landscaping, cleaning, etc.
The next section of the Will left specific amounts for her grandchildren, David and Walter; her brother, Alvin; her chauffer, Nicholas; and specifically disinherited two grandchildren, Craig and Meegan. The amounts varied – and even the method of distribution varied. Like some went in trusts for people, others went outright, no-strings-attached to people. Nicholas, just since it’s kind of fun he was included, got the least amount by far at $100,000. All others, except for the two grandchildren specifically disinherited were set to get millions of dollars. Another interesting tidbit about how she set things up … for David and Walter, the two grandchildren that DID was supposed to get an inheritance, to receive ANY distributions from their trust, Leona put in her Will/Trust that the only way they got their distribution from their trust was they HAD to visit the gravesite of her deceased son (Jay) once a year, unless there was a mental or physical disability that prevented them from doing it. She even included a provision that the Trustees of the trust place a register for people to “sign in” when visiting the mausoleum; that way, they would know if David and/or Walter were entitled to trust distributions. HOLY COW, right?!
Next in the Will was a specific and unique gift for her dog, which was a Maltese, named Trouble … She left … are you ready for this? She left $12 Million Dollars in trust for the care and maintenance of Trouble, the Maltese. You heard that right. $12 Million Dollars for the dog! So, the way the Will is setup is that after ALL those were addressed and taken care of financially, then the remaining balance of Leona’s Estate was supposed to be “deposited” into the Leona M. and Harry B. Helmsley Charitable Trust., which according to a New York Times article, was left more than $4 Billion Dollars.
Unfortunately, things sure didn’t “stick” as Leona had documented. Some parties, including the disinherited children (Craig and Meegan), contested the estate and trusts claiming that Leona, their grandmother, was mentally unfit when she executed her estate plan. Ultimately, after much time litigating and probably lots of dollars to litigate, all the parties ended up settling and the distribution went a little something like this:
- All the mentioned gifts/amounts to David/Walter, grandchildren not disinherited, and Alvin, the brother, and Nichols, the chauffeur, … all of their amounts were reduced;
- The trust for Trouble, the maltese dog, was reduced from $12 Million to $2 Million;
- Craig and Meegan, the grandchildren disinherited in the Will, split $6 Million Dollars (so probably $3 Million each-ish); and
- The Charitable Trust came with immense question/debate because Leona had left very vague, somewhat confusing language for WHAT the Trustees were supposed to do … what ended up happening was that the Trustees gave, and continue to give, to a healthy list of organizations that can be found in the source links for this episode.
All in all, even though her mental state was questioned, her estate beneficiaries, including the ones she disinherited but still ended up inheriting, really stayed relatively rational and things didn’t take all too long to settle/conclude – and in my eyes, personally-speaking, I think much of her intention was generally followed, except for the two she disinherited. Though, from a 50,000 foot overview, they didn’t get all too much comparing what others got/what charitable organizations go. So, a lot to learn from Leona’s plan … a lot to DIGEST from Leona’s plan … I hope you enjoyed this one. It was a fun one to write for sure! I kept thinking, “WHAT?! She did WHAT?!”
Alrighty, I think we’re ready to wrap this episode up. Next week we’re back to a “cautionary tale” episode where we talk about real-life clients, real-life cases that I, or my office, have worked on. During that episode, we’re going to go through some SUPER common estate planning misconceptions told through stories – told through real-life cautionary tales that may have believed these misconceptions, but then things didn’t work out very well. So, tune in for that next week, but until then, take care and be well!
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