LISA MARIE PRESLEY & THE RISE AND FALL OF THE ELVIS ESTATE
As the daughter to the King of Rock ‘n’ Roll, Lisa Marie Presley enjoyed a charmed childhood. She had ponies, private access to an amusement park for herself and her friends, and legions of household employees to cater to her every whim. In fact, when Elvis found out that Lisa Marie wanted to see snow for the first time, he ordered his private jet to fly her to Idaho to play in the snow for twenty minutes, before flying her home again.
This is the fifth installment in our Fortune Fights series, based on the celebrity documentary television show, Fortune Fights, for which we serve as hosts, legal commentators and executive producers. The next episode, Lisa Marie Presley: Fortune Fight, airs March 31st.
Elvis Presley was always reputed to be a free-spender. Estimates place his lifetime earnings anywhere from $100 million up to one billion dollars. Regardless of where the true figure lies, there is no doubt that Elvis felt free to be as generous as he wanted to his only daughter — and lots of other people too, for that matter. When Elvis’ bank account started to run dry, he could simply go on tour or set up another movie deal and the money faucet would flow.
The Presley financial picture took a big turn for the worse as of that fateful day on August 16, 1977. Elvis left behind a cash-poor estate, with only about $5 million and lots of debt. A few years later, as reported by the Los Angeles Times, the IRS determined the true value of the Elvis Presley Estate was worth more than what the estate’s tax return disclosed and imposed a $10-million estate tax. Of course by then, there were no concerts to book, new music to release, or movies to make.
Presley Estate was in Dire Financial Straights
The estate was in dire financial straights. And it couldn’t even count on royalties from the large majority of Elvis recordings because his infamous manager, Colonel Tom Parker, had previously brokered a deal to sell those to RCA for a paltry $5.4 million – only $1.35 million of which found its way into Elvis’ pocket after Parker’s 50% fee and income taxes. In fact, it took a probate court battle to remove Parker and his 50% fee from future estate dealings.
As the LA Times piece detailed, Priscilla Presley stepped into the picture and assumed primary management of the Elvis Presley Estate, as one of the executors. With the help of financial professionals, Priscilla formed Elvis Presley Enterprises, or EPE, to manage all Elvis image rights and remaining royalties, which primarily included turning Graceland into a tourist attraction. Between Graceland profits, merchandising, image deals, and royalties from songs recorded after the RCA deal, Priscilla and her co-executors of the Elvis Estate helped grow its value to a reported $100 million by 1993. That was the year during which Lisa Marie Presley turned 25 and became eligible to inherit the money directly under Elvis’s Last Will and Testament.
Instead of receiving the Elvis Presley fortune, Lisa Marie instead created her own revocable living trust in 1993, and appointed others to act as trustees over her inheritance, through the new trust. Ten years later, she appointed business manager Barry Siegel as a co-trustee, to be the person primarily in charge of managing the trust assets.
Less than two years into his tenure as a co-trustee, Siegel decided to sell 85% of the Trust’s interests in EPE, which was worth around $100 million at the time. But instead of netting $100 million for Lisa Marie’s Trust, the deal brought in only $40 million after taxes, plus $25 million worth of stock in the future holding company of American Idol. While not $100 million, this still should have provided Lisa Marie with a tidy nest-egg.
Lisa Marie Presley Left Deeply in Debt
Sadly, between 2005 and 2015, nearly all of this money was gone, and Lisa Marie was left deeply in debt. In 2018, Lisa Marie Presley sued Barry Siegel and his financial company, Provident Financial Management. In the lawsuit, she accuses Siegel and Provident of hiding the Trust’s true financial condition and instead distributing the Trust principal to her for exorbitant spending – including $39 million dollars in only four years, from 2005 to 2008. By the time of Siegel’s removal in 2015, Lisa Marie points out that the Trust was left with only $14,000 cash and she owed hundreds of thousands of dollars in unpaid taxes and other debt.
Lisa Marie alleges that if not for the ill-fated EPE sale and related investment into the American Idol holding company, which eventually went bankrupt, and if the principal of the Trust had been protected and invested, the Trust would have been worth at least $100 million. She says that if Siegel had informed her of the true financial picture, she would not have spent so much money and would have instead limited herself to spending the Trust’s income only, preserving the principal intact. This would have permitted her to receive around $1.5 to 2 million per year, net of taxes, which she would have lived on comfortably, according to her lawsuit. Lisa Marie also alleges that she would not have authorized Siegel and Provident to charge fees that averaged more than $700,000 per year, had the true financial picture been disclosed to her.
Siegel denies the allegations and instead blames Lisa Marie for excessive spending, which he said he tried to convince her to limit, repeatedly. Siegel details yearly meetings he had with Lisa Marie, during which he presented her with financial information about the Trust. Lisa Marie, he says, did not want hard copies of the financial information for fear that people who frequently came into her house would read it. Siegel alleges that Lisa Marie alone is responsible for her own inability to live within a reasonable means.
The lawsuit is currently pending in a Los Angeles courtroom and is expected to be tried sometime later this year. Recently, the presiding judge ordered Siegel to submit an accounting report for the Trust activity under his watch, over Siegel’s objection.
While it will take some time for the lawsuit to be resolved and perhaps reveal who really is to blame for Lisa Marie’s dire financial condition, one thing is certain – Lisa Marie’s upbringing with a silver spoon in her mouth did not help her spending habits as an adult. In that respect, there are many similarities of the recent college admissions scandal and the problem of wealthy parents raising privileged children. Doing so often has negative consequences for the children and parents both, especially when the situation is not properly addressed through estate planning.
If you want to see more about how this played out with Lisa Marie Presley’s upbringing and helped shape her financial troubles as an adult, check out the next episode of our celebrity documentary series, Fortune Fights, on the REELZ network [click here for show times].
The Fortune Fights celebrity documentary series airs on the REELZ cable network, with new episodes airing Thursdays at 9 pm. In the series, Danielle and Andy Mayoras explore the legal ups and downs, and fortunes earned and lost, of stars like Johnny Depp, Madonna, Britney Spears, Robin Williams, Harrison Ford and others.
Danielle and Andy Mayoras are co-authors of Trial & Heirs: Famous Fortune Fights!, television hosts and keynote speakers. You can find them on Facebook, Twitter, Instagram, YouTube, and LinkedIn. For all the latest celebrity legal news, be sure to check out their blog.
[photo credit: thefix.com]