Hugh Hefner died on September 27, 2017 at the age of 91.
He was survived by his wife, Crystal, age 31, and four children, two of whom are in their 60s, and two who are in their 20s.
He is reported to have left an estate with an estimated value of about $40m (US), with other assets held in trusts (he apparently sold the Playboy Mansion for $100m (US) in August, 2016).
It has been reported that Crystal will inherit nothing from Hugh’s estate, due to an “iron-clad prenuptial agreement”. However, it was said that she would be
“looked after”.
Investment News has speculated that this could be done in a number of ways. One possible method is by way of a “Qualified Terminable Interest Trust Property trust” or Q-TIP trust – what we commonly refer to as a “spousal trust”. The trust could provide for Crystal during her lifetime, with the residue to be distributed to named beneficiaries upon her death. Properly executed, such a trust can provide for a spouse while maintaining the estate for the deceased’s children. It can also provide significant tax savings through deferral of taxes.
One issue that arises in the Playboy scenario that doesn’t often arise elsewhere is the ages of the players: Crystal is only 31, while her oldest step-daughter Christie is 64. Assuming normal life expectancies, Hugh’s older children may never benefit from the residue of the trust.
Another scenario posited by Investment News is the use of insurance proceeds to fund a trust or annuity for Crystal. However, they observe that Hugh was 86 at the time of his marriage to Crystal, and the cost of purchasing significant coverage would be extreme.
More recent reports state that Crystal will survive Hugh with a Hollywood Hills home, which was held in a trust controlled by her (or jointly owned by Crystal and Hugh, depending on what webpage you read), and also $5m (US) from his estate.
As to Hugh’s estate, it is believed that it will go to his children and charities.
Hugh Hefner once said “I’m actually a very moral guy.” Hopefully, and to the extent possible, he did the right thing on death.
Have a great Thanksgiving weekend.