People of all levels of wealth need to create a plan to distribute their assets upon their death. Hugh Heffner, the founder of Playboy Magazine who recently passed away, used estate planning to ensure his loved ones were taken care of when he passed away. At 91-years-old, Heffner had an estate valued over $40 million as well as $100 million from the sale of his home earlier this year. In the 1970s, the estate was worth over $200 million (equaling over $1 billion today).
Heffner left his estate to various parties including his four children, the USC Film School and multiple charities. However, Heffner’s widow, Crystal Harris, is not receiving anything from the estate due to a prenuptial agreement signed in 2012, but will apparently be taken care of. While it is unclear what this means at this time, it is likely that the prenup stated that Harris would receive income from a trust or annuity.
For example, a Qualified Terminable Interest Property trust could allow Harris, who was only 26-years-old when they married, to receive an income stream to support her for the rest of her life. However, Harris would not be able to change the beneficiaries to the trust or manage the trust in anyway. If the QTIP trust is in place, the trust will pass to Heffner’s children upon Harris’ death, if they were the beneficiaries listed. Heffner may also have put life insurance in an irrevocable trust, but it is unlikely due to how expensive life insurance would be for a man getting married in his mid-80s. A final possibility may be that Heffner’s estate bought a commercial annuity equaling $5000 a month for his life that would go to Harris upon Heffner’s death.
Regardless of the methods used, it is clear that Heffner made sure his loved ones were well cared for upon his death. Talk to a qualified estate planning attorney to discuss your options and protect your loved ones.
Source: InvestmentNews, “How will Hugh Hefner’s estate ‘look after’ his widow’s finances?,” Greg Iacurci, Sept. 29, 2017