Estate Planning Blog

Estate Planning Lessons from Elvis’ Mistakes

So far, part of the Presley legacy appears to be the failure to create effective estate plans, says a recent article from Kiplinger, “Five Estate Planning Lessons We Can Learn From Elvis’ Mistakes.” An effective estate plan transfers assets and legacy to the right people at the right time, while keeping the wrong people out.

In this case, the right people would be the people whom Elvis and Lisa Marie wanted to benefit, and a good estate plan would have ensured that their desired beneficiaries or heirs received their inheritance. The right time would be to give control of assets to loved ones when they are mature enough to benefit for a lifetime. Keeping the wrong people out would mean minimizing tax and administrative costs and protecting heirs from lawsuits, divorce, creditors and a second level of estate taxes upon their own death.

Most recently, Priscilla Presley challenged a 2016 amendment to Lisa Marie’s trust which would have removed Pricilla as co-trustee from serving alongside Lisa Marie’s former business manager, Barry Siegel. This may have been her intent. However, the amendment didn’t include basic legal formalities. A confidential settlement was recently reached on this issue.

Priscilla had grown Elvis’ estate after his death. Despite his fame, he left an illiquid estate worth $5 million in 1977—adjusted for inflation, roughly $20 million in today’s dollars. The IRS successfully asserted that the estate was worth far more and asserted $10 million in estate taxes.

The estate didn’t include as much royalty income as expected because Elvis’ business manager, Colonel Tom Parker, sold the music catalog to RCA for $5.4 million, of which only $1.35 million went to the estate. Priscilla then assumed control of the estate. From her wise use of Graceland profits, merchandising and royalties for music recorded after the RCA deal, Priscilla grew the estate to $100 million.

In 1993, Lisa Marie turned 25 and was eligible to receive and control her inheritance. She established a revocable trust to hold her inheritance, then appointed a businessman as her co-trustee with primary control over her assets. In two years, he sold 85% of her interests in Elvis Presley Enterprises, an entity The Elvis Presley Trust created to conduct business, including Graceland and worldwide licensing of Elvis Presley Products.

The deal was worth $100 million but brought the estate only $40 million after taxes, plus $25 million in stock in a future holding company of American Idol, later made worthless due to bankruptcy by its parent company.

Careful planning could have avoided substantial income tax on the sale and provided the family a much better financial return. Siegal was removed as trustee in 2015 when lawsuits between Siegel and Lisa Marie began, which were pending when she died unexpectedly in 2023.

The lessons from the Elvis estate:

Use a trust, not a will. The trust removes delays, and higher costs and keeps private details private.

Make sure that your estate plan addresses estate tax issues. The goal is to reduce the value of the taxable estate and increase the value of your legacy to family and loved ones. The estate tax must be paid in cash within nine months from the date of death. This often requires a sale of estate or trust assets to pay the tax and can lead to heirs getting less than the full value of assets because of the need to come up with the cash. A simple testamentary charitable lead annuity trust (TCLAT) could have prevented the estate tax assessed after Elvis’ death and provided substantial benefits to Lisa Marie.

Plan for a lifetime legacy. Lisa Marie gained complete control over her inheritance at age 25. First, however, she needed to prepare for the complexity of the business and other assets she inherited and learn how to maintain a lifetime of living within her means.

Plan for estate taxes on the sale of the family business. Careful planning can almost always reduce the tax triggered by the sale of appreciated property. Unfortunately, no tax mitigation planning was taken before the $100 million sale of Elvis Presley Enterprises. As a result, the maximum capital gains tax, federal and estate combined, can be more than 40%.

Carefully choose the successor trustee or executor and provide at least two alternatives. Elvis appointed his father Vernon as the executor. Elvis died tragically in 1977 when Vernon was elderly and not well. Appointing a business manager as a trustee creates an inherent conflict of interest due to the business manager’s ability to profit from decisions made. A professional trustee would have been a better choice due to the complexity of the estate and Lisa Marie’s age.

Reference: Kiplinger (May 18, 2023) “Five Estate Planning Lessons We Can Learn From Elvis’ Mistakes”

Is Jimmy Carter Spending a Long Time in Hospice?

The news that former President Jimmy Carter entered hospice care came in late February. The Carter Center announced that he’d “decided to spend his remaining time at home with his family and receive hospice care, instead of additional medical intervention.”

Now more than two months later, experts say that spending months at a time in hospice — while not always the case — is not at all uncommon, reports MSN’s recent article entitled, “Jimmy Carter’s Hospice Care Is Not Unusually Long, Expert Says: ‘Average Is 60-70 Days.’”

“A misconception is that the average length of stay in hospice is for the last several days of someone’s life,” explains Jonathan Fleece, president and CEO of Empath Health, one of the largest not-for-profit hospice organizations in the country. “The average length of stay nationally is in the 60- to 70-day range.”

While many consider hospice 24/7 care, it depends on a patient’s situation.

“A lot of hospice care is not 24/7. It’s in and out of the home and working with the family and caregiver to be able to support their loved one,” he says. “So we teach them a lot of different ways to help, whether it’s helping with bathing or administering medication or keeping them comfortable.”

It’s interesting to note that hospice was made eligible for Medicare reimbursement under the Tax Equity and Fiscal Responsibility Act of 1982 — which was passed into law under Carter himself.

“I truly believe that the former president wanted to make this part of the American conversation,” Fleece said.

Hospice care isn’t only meant for those at the end of life but for their family members, as well. It also provides caregivers and families with the resources they need.

This includes guiding family members through the grief and bereavement process, including the period of “anticipatory grief,” in which the family and patient know that death is coming.

Hospice care can also include things like veterans programs (Carter, being a veteran, would likely be provided with a pinning ceremony, in which a decorated soldier administers a flag with military honors). It also provides full medical care, as well as spiritual support.

“We hear all the time from families and patients, ‘I wish someone had explained the scale and depth and breadth of what hospice can bring sooner.'”

Reference: MSN (April 20, 2023) “Jimmy Carter’s Hospice Care Is Not Unusually Long, Expert Says: ‘Average Is 60-70 Days’”

Is Aretha Franklin’s ‘Voice-from-the-Grave’ Having an Impact on Litigation Over Estate?

In some voicemail messages from May 2018, Aretha Franklin mentions her desired adjustments to a will recently drafted by an attorney she’d hired. While Franklin is heard saying she’d like to arrange an office visit “to finish this,” those voicemails turned out to be her last communication with the attorney, and the eight-page document remained unsigned when she died a few months later.

The Detroit Free Press’ recent article, “Aretha Franklin voicemails revealed in court as estate battle takes latest twist,” reports that these voicemails made for a chilling “voice-from-the-grave” scene in the courtroom of Oakland County Probate Judge Jennifer Callaghan. The counsel for Franklin’s four sons gathered at the judge’s bench as audio was streamed from a laptop computer while three of the sons listened on from the gallery.

In the recordings left on the voicemail of the Troy estate attorney, the Queen of Soul sounds polite but firm as she states her requested changes to the drafted will.

The hearing was the latest twist in the long estate battle complicated by the discovery of multiple conflicting documents that indicate her final wishes. The 2018 draft is one of three wills as the judge considers how the estate will be distributed among the four sons and other heirs.

The document was filed to the court in 2021 by Ted White II, the second youngest of Franklin’s sons. It followed the appearance of two handwritten wills, penned by the singer in 2010 and 2014 and found tucked away in her home after her death. The wills have varying instructions, which has made for a contentious impasse among her sons. The 2018 draft is the only one that calls for assets to be split equally among the three youngest, with eldest son Clarence Franklin, who has special needs and is under guardianship, to be supported by a trust.

A jury trial is scheduled for July to determine which — if any — of the documents should be upheld. The recent hearing was scheduled to determine if the unsigned 2018 draft is admissible under Michigan statutes. The judge is expected to rule later this month.

Reference: Detroit Free Press (April 21, 2023) “Aretha Franklin voicemails revealed in court as estate battle takes latest twist”

Can We Learn from the Presley’s Estate Fight?

Priscilla Presley, mother of the only daughter of Elvis Presley, argues that a 2016 amendment to Lisa Marie’s trust, which removed her as co-trustee, is invalid. The amendment replaced her and Lisa Marie’s former business manager as co-trustees with her children Riley and Benjamin Keough (the latter of whom died in 2020).

MarketWatch’s recent article entitled, “Lisa Marie and Priscilla Presley can teach us some estate-planning lessons,” reported that Presley said she was never told that she was being replaced, as was required. She also said her name was misspelled, her daughter’s signature was ‘inconsistent’ with her usual autograph and the amendment wasn’t witnessed or notarized. We can learn that estate planning must be meticulous, and the Presleys provide some simple lessons for anyone looking to create or amend an estate.

Follow the trust rules. Priscilla said she was supposed to be told if she was to be replaced as co-trustee, but she wasn’t. The trust sets out the rules. If you’re going to make an amendment, you must follow what the trust says. There may be consequences if the rules aren’t followed precisely. For example, Lisa Marie’s latest amendment allegedly ignored one of the rules of her trust when her mother wasn’t notified that she’d been replaced as co-trustee. This is where having an experienced estate planning attorney is critical: they can spot mistakes and understand legal language and procedures, so these important documents are upheld in court.

Update your documents when necessary . The amendment Priscilla is contesting was made in 2016 and named two of Lisa Marie’s children as the new co-trustees. However, one died four years later. If a judge deems the amendment valid, what happens next will depend on what the trust specifically says about one co-trustee predeceasing the granter of the trust. You should also review your documents every few years, or when major life events occur, such as a birth, death, marriage, or divorce.

Inform trustees. Deciding who will be trustee to an estate can be challenging. It’s not uncommon for successors to not know they were named. However, they should be notified of this critical job.

Get your paperwork witnessed or notarized – even when you don’t have to. Priscilla’s name being misspelled in the amendment raises questions because she was referring to her mother. In addition, the fact that her name is spelled incorrectly creates issues. A witness or notarization can avoid any additional legal hurdles with a misspelled name or an inconsistent signature. The court will need handwriting experts to examine Lisa Marie’s amendment and determine if it was actually her signature.

Reference: MarketWatch (Feb. 4, 2023) “Lisa Marie and Priscilla Presley can teach us some estate-planning lessons”

More Heirs Found for Pope Benedict XVI’s Estate

The archbishop who assisted Pope Benedict XVI has been trying to handle the late pontiff’s estate, but has found more heirs than he was expecting, reports Fox News’ recent article entitled, “Vatican searching for heirs to Pope Benedict XVI’s estate.”

Born in Marktl, Bavaria, Pope Benedict XVI, passed away last year at the age of 95.

Some estimates show Pope Benedict’s net worth was approximately $2.5 million. After he stepped down as the head of the Catholic Church, he continued to receive a monthly pension of about $3,300, CNBC reported in 2013.

He was buried on January 5, 2023, in St. Peter’s Basilica, Vatican City. There are 90 other popes buried under the church.

Archbishop Georg Gänswein, Benedict’s personal secretary, told Vatican News that he was surprised to find he had five individuals with claims to Pope Benedict’s estate.

“This has been very interesting for me. I thought he had two relatives, two cousins, but there are five cousins in total,” the archbishop said, according to translations from Catholic News Agency.

He continued, “By law I have to write to the cousins who are the closest relatives, and also by law I have to ask them, ‘Do you accept the inheritance, or do you not accept it?’”

What money or assets are to be inherited from the late pontiff is not publicly known.

Pope Benedict XVI spent his last few years living simply in a Vatican apartment.

Gänswein told the newspaper Il Messaggero that “other personal items, from watches to pens, from paintings to liturgical items, were included in a list meticulously drawn up by Benedict XVI before he died.”

The late pope’s vast library was willed to the Vatican and the Joseph Ratzinger Vatican Foundation.

Reference: Fox News (March 22, 2023) “Vatican searching for heirs to Pope Benedict XVI’s estate”

What’s Going on with Larry King’s Estate?

Larry King’s widow Shawn has accused the firm Blouin & Company of helping Larry King Jr. as part of the fight over the late broadcaster’s estate.

Radar Online’s recent article entitled, “Larry King’s Widow Shawn SUES HER OWN SISTER Claiming He Spent Millions On Her While They Had Secret Affair,” says that Larry Sr. died in January 2021.

Larry King Jr. asked the court to be named special administrator of his father’s estate. He presented a handwritten will that Larry Sr. had reportedly signed before his death. The amended will left his fortune to his child and not Shawn. Shawn objected to the will claiming Larry Sr. was not in the right mind to sign the amendment to the will. A settlement was eventually reached between the two.

But a few months later, Shawn sued Blouin & Company, claiming it had led a “fraudulent and malicious conspiracy to steal money from their client, Mrs. King, and deprive Mrs. King of her rights and interests in the estate of her late husband.”

Shawn brought claims against Blouin & Company and her sister Shannon Engemann Grossman, a named defendant. She claims that Shannon “received a substantial number of improper and unauthorized transfers of” her community assets. Moreover, she alleges that her sister received “unauthorized goods and services worth millions of dollars (or more subject to further investigation), including airfare, clothing and accessories, furniture, limousine services, healthcare services, dental implants, luxury automobiles, luxury hotel accommodations and numerous other goods and services.”

During their marriage, Shawn and Larry were close to divorce multiple times after marrying in 1997. In 2010, they both filed their petitions in Los Angeles Superior Court. Shawn believed Larry and her sister were having an affair.

At the time, Shannon denied having an affair with Larry. She admitted Larry was generous with gifts but said he was like that with everyone. Shannon said, “I’m tired of taking the rap for things. I did not have an affair with Larry. He’s been like a father to me.”

Blouin & Company denied all allegations of wrongdoing in their response and noted that Larry had a secret bank account that they were unaware of that he used to fund his lavish lifestyle. The firm filed a countersuit against Shawn for unpaid invoices.

Reference: Radar Online (Jan. 9, 2023) “Larry King’s Widow Shawn SUES HER OWN SISTER Claiming He Spent Millions On Her While They Had Secret Affair”

What’s the Latest on Bruce Willis’ Dementia Diagnosis?

Last year, actor Bruce Willis announced his retirement due to being diagnosed with ‘aphasia.’ However, that diagnosis was recently updated, reports Microsoft’s recent article entitled, “Bruce Willis’ wife Emma Hemming forced to dementia specialist after actor’s new diagnosis.”

Willis and Heming first met in 2007 at their mutual trainer’s gym. Heming is a British-American model and actress raised in north London and California.

“When we first met, I was surprised at how charming and how funny he was – and extremely handsome,” Heming told People. “That was my first thought of you.”

“I was already in love with her,” Willis, then 52, said. The two dated for a year before they got married in March 2009.

Willis’ diagnosis affects his communication and memory. Dr. Allison Reiss, an Alzheimer’s Foundation of America’s Medical, Scientific and Memory Screening Advisory Board Member told the media what the diagnosis means. She said the causes is a “hodgepodge of different things that have been put together” leads to “a lot of devastating consequences,” such as “difficulty saying words, understanding the meaning of words, and remembering and naming familiar objects.”

The doctor also said that everything “just gets more difficult” as “the problem spreads and gets worse”, until “you pretty much lose everything.”

However, she encouraged families to keep up hope through the challenges that come with the diagnosis. This is exactly what the Willis family seems to be doing. Heming has hired Teepa Snow, a professional who provides awareness, knowledge and hands-on skills for dementia care. Heming took to Instagram to appreciate Snow, she wrote, “I’m grateful I had the opportunity to work with @teepasnows_pac who has helped me add to my dementia care toolbox.”

“She’s a loving, compassionate and skilled leader in this space who navigates herself with pure empathy,” Heming continued. “She’s a gift.”

Snow admired Heming and appreciated how she’s been caring for her husband following his diagnosis. She said that she’s done an absolutely remarkable job of providing the right support for Bruce as his abilities have changed and created a place space and life that continues to provide him with what he needs to live well.

She added that “frontal temporal dementia is never easy but with the right programming and support, it truly is possible to continue living life. Congrats to Emma and their entire family for their very, very hard work and dedication. It is truly remarkable!”

Reference: Microsoft (March 1, 2023) “Bruce Willis’ wife Emma Hemming forced to dementia specialist after actor’s new diagnosis”