How to Choose an Independent Trustee: The Strange Saga of Lisa Marie Presley
Learning how to choose an independent trustee is a vital step in the estate planning process. An independent trustee is an impartial executor who administers trust assets, ensuring that the deceased’s final wishes are followed to their exact specifications.
Failing to select the right candidate for this position can have lasting consequences, as evidenced by the significant monetary loss experienced by Lisa Marie Presley.
The Loss of the Presley Estate
Lisa Marie Presley — the only child of Elvis and Priscilla Presley — recently sued her former business manager for $100 million, the total value of her estate. Presley accuses her business manager of “reckless and negligent mismanagement and self-serving ambition,” which, according to Presley, left her with a mere $14,000 in the estate.
While Presley’s situation is unfortunate, the sad reality is that if Presley’s parents — Elvis and Priscilla Presley — had been more careful in learning how to choose an independent trustee, they could have put their daughter in a much less devastating situation.
Choosing a Trustee
Integrity is the first and foremost quality you should be seeking in an independent trustee. You want someone with an upstanding, established reputation. Ideally, your independent trustee should have multiple reputable individuals willing to vouch for their character. Beyond general trustworthiness, there are some more nuanced qualities that should be on your list as well.
For one, when choosing an independent trustee, you want someone who does not have any personal motivations that might lead them astray. For example, according to Presley’s claims, her business manager had his own dreams of becoming a celebrity, and that was a major contributing factor to why he placed her assets in “risky ventures.”
Beyond looking for someone who has no existing reason to make potentially poor decisions, you want a trustee with a track record of making prudent financial choices. Guaranteeing that your independent trustee can responsibly manage the estate allows you to avoid the risk of someone treating your money frivolously, as was allegedly the case with Presley’s business manager.
It is critical that you watch for these red flags when deciding how to choose an independent trustee. Presley’s business manager allegedly paid himself a $700,000 annual salary and charged exorbitant fees for his services — two immediate red flags that should have led Presley to reconsider her decision.
You must select a trustee who is completely transparent at all times. Lisa Marie Presley was not aware of the financial state of the estate until it was too late. According to her lawyers, Presley’s business manager covered up the estate’s diminished finances until the situation finally hit a breaking point.
Had Presley been aware of the estate’s ongoing current condition at all times, she likely would not have agreed to her manager’s unreasonable fees and salary. More importantly, had Presley’s parents known how to choose an appropriate independent trustee, they could have been able to create a realistic budget that would have allowed their daughter to remain financially comfortable for life.
Contact Derderian & Associates Today
Understanding how to choose an independent trustee before making any serious commitments is absolutely essential to responsibly managing an estate. One wrong decision can have lasting, irreversible consequences. At Derderian & Associates, we are committed to transparency and impartiality, ensuring that you can proceed with your estate planning with the utmost confidence.
At SDA we provide the independent trustee services you need to make sure your beneficiaries are treated fairly in accordance to your wishes. One of the many benefits of having SDA be your independent trustee, is that your beneficiaries with receive CPA produced financials every month.
Another benefit is unconflicted advice on how to manage the assets in the trust. This is contrary to using a bank or investment brokerage to be your trustee, as they will charge a trustee fee and a fee to manage those assets in their own funds. Banks and investment brokerages will also be very resistant to disbursing the trust assets in accordance to your wishes, as they profit from having assets under management, a problem you won’t have with SDA.
We pride ourselves on independence and transparency, providing settlors and beneficiaries with unconflicted advice and all the financial information needed for their trusts to execute their wishes.