Readers of this California estate planning legal blog have probably heard that Hugh Hefner, founder of the Playboy Magazine empire, passed away at the age of 91. At the time of his death, Hefner was survived by his third wife and four children from previous relationships.
Hefner's estate is estimated to be worth $40 million, and often when a married person dies their estate passes to their spouse. However, Hefner and his now 31-year-old widow executed a prenuptial agreement five years ago when they wed that limited the windfall that she would receive in the event of their divorce or his death. Arrangements such as this are not unusual when individuals wish to leave their estates to their children in lieu of their spouses.
Per Hefner's plans, his wife was to be taken care but may not actually be a beneficiary of his time-of-death estate. There are several ways that this type of arrangement may have been achieved, and it is likely through the use of a trust that his widow will receive an income without having any control over the assets of his estate.
It is possible that Hefner established a qualified terminable interest property trust (Q-TIP trust), through which his widow would receive financial support but would have no power to control the trust assets. He could also have put a life insurance policy in trust for his wife, so that the payments out of the policy would pass directly to her.
An estate plan can achieve many of the goals that individuals have for the distribution of their estates at the times of their death. Hefner achieved a unique purpose in establishing a support payment for his widow without having her serve as an estate beneficiary. Readers of this post who have their own estate planning questions are encouraged to contact attorneys for further clarification.
Source: investmentnews.com, "How will Hugh Hefner's estate 'look after' his widow's finances?" Greg Iacurci, Sept. 29, 2017