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Hugh Hefner's widow signed prenuptial, but still gets millions

When 91-year-old Hugh Hefner died this past week, many people wondered how his widow, Crystal, was going to fare. It was common knowledge that the 31-year-old former Playboy cover model had signed an ironclad prenuptial agreement with Hefner. Still, it was speculated that he was going to take care of her for the rest of her life, but the question was how he would accomplish that since she wasn't in his will.

Some speculated that he would do this through Q-TIP trusts, which is a Qualified Terminable Interest Property trust. This type of trust would provide his widow with an income stream that is likened to an annuity or pension payment. Since she wouldn't have control of the trust, she couldn't control who gets the benefits of it when she passes. Instead, Mr. Hefner's instructions prior to his death determines this.

It has come to light that Crystal will be taken of nicely now. Mr. Hefner purchased a Hollywood Hills home for her in 2013, the year after they married. She also walked away with $5 million that Mr. Hefner left her due to the terms in their prenup.

There were other options that Mr. Hefner might have used to make sure that his wife was cared for after his death. He could have set up a life insurance trust; however, due to his advanced age, this wasn't likely going to be financially feasible. He could have also purchased an annuity that would go to her upon his death.

Mr. Hefner's death proves an important point. Estate planning is important for everyone. Before his death, he made sure that this wishes were clearly and legally conveyed. This is something that every adult should make sure he or she does.

Source: Investment News, "How will Hugh Hefner's estate 'look after' his widow's finances?," Greg Iacurci, Sep. 29, 2017

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