The Sad Case of Lisa Marie Presley

Transcript of Podcast Episode 224

Hello this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode, the sad case of Lisa Marie Presley.

Earlier this year, the unexpected death of Lisa Marie Presley, Elvis’s only child, came as a shock to many people. She was only 54.

She has three surviving children. Her only son, Benjamin, died by suicide in 2020. The three daughters will inherit Graceland, Elvis’s famed estate in Memphis, but it’s unclear what else is coming. Lisa Marie sold off 85 percent of her father’s possessions, likeness and publishing rights back in 2004.

People were equally shocked to learn that Presley, who had inherited $100 million when she turned 25 in 1993, had somehow managed to lose or squander most of what she had gotten. As always, with sad details of a shattered estate, there are lessons that we can all learn.

Let’s start with Lisa Marie’s spending habits. It’s a textbook example of what’s known as the “wealth effect.” The wealth effect is a behavioral finance theory that people spend more money as the value of their assets rise. And that seems to be what happened to Lisa Marie starting with the 1993 inheritance. As the money dissipated, she was unable to cut back when she really needed to.

According to published reports, a few years ago Presley was spending $92,000 per month on her living expenses, with less than $1,000,000 of liquid assets. Not to mention a significant reported debt to the IRS and a bitter custody battle with her fourth ex-husband. Her ex also alleged that Presley was behind on her $4,600 a month in child support payments.

And there were other planning mistakes. She appointed her mother and then business manager as trustees rather than hiring a professional fiduciary. That was until 2016, when she fired her mom and her manager, appointed her daughters (even though two of them were  minors), and ended up suing the manager for mismanagement. 

But since her death, problems have surfaced with the 2016 document. For one thing, her mother Priscilla’s attorneys have claimed that the amendment was neither witnessed nor notarized, and that Priscilla’s name is misspelled. They also question the authenticity of Lisa Marie’s signature.

It also appears that she had a $10 million life insurance policy that lapsed, presumably for non-payment.

And there is the question of what happened to the proceeds of the trust that terminated in 1993. According to legal experts, the money would likely have been better protected had it been set up for an older age distribution or even for Lisa Marie’s lifetime. Had Elvis done this, more of the money he earned would have stayed in the family.

All of this will likely lead to years of expensive litigation and hurt feelings. And much of it could have been avoided with more careful planning and a little bit of spending discipline.

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