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Suspicious Minds

It has been a slow month for celebrity estate planning news. Lisa Marie Presley is embroiled in a lawsuit with her financial manager claiming he mismanaged her $100 million trust and left her with $14,000. She alleges that the manager sold 85% of her ownership in Elvis Presley Enterprises in 2005 for $100 million but invested most of the proceeds in the company which owned American Idol which filed for bankruptcy in 2016. She is also in the midst of a divorce from her fourth husband who is seeking $263,000 in annual alimony payments. She claims to owe $10 million in back taxes and $6 million in other debts.

Lots to digest.

1. The manager has countersued for $800K for unpaid investment fees. He alleges that Lisa Marie has a spending problem.

2. Allegedly, $20 million of the $100 million sales proceeds were used to pay off debts she had accumulated at the time.

3. Lisa Marie’s mother was concerned enough about her ability as a high school dropout to manage the inheritance that she was able to delay the distribution from Elvis’ trust until she turned 30.

4. Call it a hunch, but I suspect that Lisa Marie’s drug abuse, uncontrolled spending, and four marriages have as much to do with the financial straits as poor fiscal management.

Photo credit:  Unknown

License:  Fair Use/Education (from linked article)

She Didn’t Know

As news breaks that Bobbi Kristina Brown will be  moved to a long term care facility, one wonders what will become of her estate.  Or at least those of us in the estate planning field wonder.  Her mother, Whitney Houston, left her reportedly $20 million estate in trust for Bobbi Kristina per the terms of her 1993 will.   Bobbi Kristina should have received 10% of that on her 21st birthday last year under the terms of the trust.  Bobbi Kristina’s assets will go to her closest living relatives i.e. her father, Bobby Brown.  The remaining 90% of the trust will be distributed per the terms of Whitney’s will which means to her mother and her two brothers.  Bobby Brown was also listed as a trust beneficiary, as was her father who died in 2003, but is precluded from inheriting from Whitney due to their 2007 divorce.

Several points:

1.   Whitney should have updated her will multiple times – as her daughter aged, after the death of her father in 2003, and after her divorce in 2007.

2.  Distributing trust assets to a child at the age of 21 is a bad idea.  I never draft a trust that permits a distribution prior to age 25.  I also have a clause prohibiting distributions to beneficiaries suffering from drug use, alcohol abuse, or a gambling problem.

3.  Recreational drug use is expensive.  In an age where Lou Reed’s estate was valued at $20 million primarily based on one song (“Walk on the Wild Side”), a $20 million estate seems small for an artist of Whitney’s stature recording in an era of larger royalties and multi-platinum CDs, with a film career to boot. Not that Lou Reed did not do drugs.

 

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All Posts By Jay Brinker

I am an attorney located in Cincinnati, Ohio who practices in the areas of estate planning, probate, asset protection, and small business advice. I make a difficult and bewildering process as simple as possible. Most importantly, I provide "more for less" for my clients.