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Hugh Hefner carefully charted his estate planning program

Hugh Hefner generally fits the profile of many celebrities who have lived and retired in California. He was a widely-known personality and was admired by many people. Conversely, many Americans likely viewed him as too liberated and excessively public with his private life. Nonetheless, it appears that he handled his estate planning wisely and effectively.

Hefner had a net worth reportedly valued at $43 million in 2010 but that did not include the Playboy Enterprises stock and his real estate holdings. He had a yearly income of $3.5 million with expenses of $1.3 million. However, with the Internet challenging the value and popularity of print media, Playboy had started to lose money in 2010. In 2011, he raised funds and took Playboy private, retaining for himself a 37 percent ownership interest.

Part of the deal was an annual salary of $1 million plus other benefits. At about the same time, Hefner married his third wife, Crystal Harris. He wisely entered into a prenuptial agreement with Harris. It gave her $5 million cash and a house worth about $5 million, which were put in a living trust controlled by Harris.

Harris took care of him well in his last few years of life. Hefner also had a will in which he devised half of his wealth to his four children and half to charity. He left Harris with enough to be comfortable while preserving the assets going to his children. The Playboy stock will be sold on the market and the proceeds put into Hefner's estate for his beneficiaries.

While alive, Playboy Enterprises sold the Playboy mansion for $100 million to Hefner's neighbor. Until his death, Playboy paid the neighbor $1 million annually for Heffner to remain living there. The overall results were beneficial to his family and his wife, with the result that they are unlikely to contest Hefner's thoughtful estate planning framework. Whether one resides in California or elsewhere, however, Hefner's plans are not for everyone. It is necessary to consult with an experienced estate planning attorney to go over one's own situation and craft a plan relevant to those facts.

Source: Forbes, "Hugh Hefner, Role Model? He Was When It Came To Estate Planning", Danielle and Andy Mayoras, Oct. 9, 2017

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