As many people here in California already know, Hugh Hefner died in 2017. As the family works through the details of his estate, certain terms in Hefner’s trust document have come to light that could potentially lead to trust litigation. The trust prohibits any beneficiary from “frequently” using drugs or alcohol as a condition to remaining a beneficiary and receiving distributions.
Hefner’s widow and four children are listed as beneficiaries in the trust. According to reports, the document provides trustees with the discretion to remove a beneficiary (and suspend his or her rights) if they reasonably believe that he or she has a problem with drug or alcohol use. The trust does provide for an exception if a medical doctor or psychiatrist prescribes a medication for regular use as part of a treatment program.
If the trustees believe a beneficiary cannot care for him or herself due to a substance abuse problem, that beneficiary’s rights under the trust become suspended. The trustees have wide discretion to require drug testing and participation in a treatment program in order to reinstate those rights, but only after the beneficiary has been “clean” for 12 months. This gives the trustees a significant amount of power over the beneficiaries.
The problem is that this type of broad discretion could easily be abused. Like other California residents who include such clauses in their trusts, Hefner put a great deal of confidence in the people he chose to administer the trust. If that confidence is misplaced, a beneficiary could potentially be denied his or her rights without cause. If this happens to one of Hefner’s beneficiaries, or the beneficiaries of any trust administered here in the state, trust litigation may be necessary in order to deal with the situation and restore a beneficiary’s rights.
Source: etonline.com, “Hugh Hefner’s Trust Reveals He Prohibits Drug Abuse By Family Members”, Liz Calvario, Dec. 20, 2017