This fall there were a bunch of rumors that Hugh Hefner was deathly ill. The witty Playboy mogul responded on Twitter: “I wish the tabloids had informed me a little earlier in the week that I’m sick. I might have cancelled my weekend plans.” Even at 90 years old, Hef’s still got it. It is claimed that he even remains the driving force behind the magazine and related enterprises. One thing Hefner has let go of, however, is his famous home.
The legendary Playboy Mansion was purchased by financier Daren Metropoulos earlier this year for a cool $100 million, making it the most expensive residential property to ever bought and sold in Los Angeles county. Metropoulos, who has already purchased an adjoining property from Hefner, is reportedly planning on combining the two properties into one giant estate.
What makes this sale particularly interesting, and relevant to estate planning, is that Hefner is not planning on moving out. He retained a life estate in the home when he sold it to Metropoulos. This means he will remain in possession of the home until his death, at which time Metropoulos can take full possession. Hefner’s wife and any other people living in the mansion at the time of Hef’s death will be given a reasonable amount of time to move out, but they will not be able to continue living there, or inherit the home since full title to it will automatically transfer over to Metropoulos.
Life estates are not as common as they were back in ye olde England, but they are gaining in popularity as seniors look for a way to ensure they can stay in their home rather than moving into an extended care facility. It costs a lot to hire the in-home help that is often necessary toward the end of one’s life, and selling your home but retaining a life estate is one way to do it.
Reverse mortgages, which are sort of similar to life estates, are also becoming more popular. In a reverse mortgage, a lender gives a home owner a loan based on the value of the property. The loan is repaid when the owner moves out, sells the property, or dies.
With both life estates and reverse mortgages, the original owner is responsible for maintaining the home and paying all the property taxes on it while they are in possession of it. For example, if the pool at the Playboy Mansion developed a leak because there were too many people partying in its famous grotto, Hefner would need to pay to have the pool repaired.
If you are looking for a way to afford to live in your own home until your death, you should make an appointment to talk with an experienced estate planning attorney. As Hugh Hefner’s sale of the Playboy Mansion reminds us, there are a lot of options out there that you may have never considered or even heard of.