Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Friday, August 29, 2008

Is being "too generous" to help animals against public policy?

PetsAs most readers are already aware, Leona M. Helmsley left the vast majority of her $4 billion fortune to a foundation to benefit dogs.

The battle is now being waged between people who think the law should either not enforce or somehow restrict a person's charitable desires and others who believe that a person should be able do with their property as they so desire.

Earlier on this blog, I reported on the attack against Helmsley's intent lead by Ray D. Madoff (Professor of Law, Boston College Law School) who believes that charitable gifts such as her causes "American taxpayers [to] subsidize the whims of the rich and fulfill their fantasies of immorality." Rather than arguing that the charitable deduction is poor policy generally as every deduction be it for charity, a gift to a spouse, or an annual exclusion gift, increases the tax burden on everyone else, she claims that the charitable deduction should be limited as follows:

There should be a limit — a dollar amount or a percentage of the estate — on the estate tax charitable deduction. People could still give to charity as they like, but after a point they would be giving after-tax dollars. The deduction should be lower for bequests to private foundations than for money given directly to good causes.

There is an unstated assumption in Prof. Madoff's argument, that is, that is it appropriate to impose a gift or estate tax in the first place.  Prof. Madoff claims that it is unfair for donors to tie up "our[]" resources.  What she fails to recognize is that none of the resources which the donors are restricting belong to "us" -- they belong to the donor.

A formal response has now been made to Prof. Madoff's attack by Leslie Lenkowsky (Professor of Public Affairs and Philanthropic Studies, Indiana University), Should a Big Bequest Go to the Dogs?, Chronicle of Philanthropy, Aug. 21, 2008.   He explains that:

Whatever one might think of her judgment in leaving the bulk of her estate to care for dogs, it was her money, and as the Nobel Prize-winning economist Gary Becker wrote in his blog, "Respecting individual preferences, no matter how idiosyncratic, is one important measure of a free society, even when those tastes relate to bequests and inheritances."

Prof. Leslie points out that "helping animals has long been accepted as a charitable purpose."  Although this may not have been case centuries ago, in 1918, the United States Congress passed legislation providing that the prevention of cruelty to animals (as well as children) was a valid charitable purpose.  He also concludes:

In a society that values individual rights, philanthropy gives those with such differing views opportunities to act on them constructively, regardless of what others may think. That is why public policy in the United States, if not always elsewhere, encourages it and gives it broad, but not unlimited, scope.

On September 5, 2008, these two opposing sides will debate the issue at a lunch session sponsored by the Hudson Institute's Bradley Center for Philanthropy.  Panelists will include the aforementioned Prof. Madoff and Prof. Lenkowsky as well as Pablo Eisenberg and Judge Robert H. Bork.  More details of this event are available at http://philanthropy.com/extras.

For readers interested in advice on how to prepare a will or trust to provide for the care (although probably in a more modest amount) of a pet animal, see Estate Planning for Pet Owners.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing Prof. Lenkowsky's article to my attention.

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