Sep 27, 2024
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While Rupert Murdoch is a titan of the media industry, his recent family drama reveals the challenges even the wealthiest families face with estate planning.
In a closed-door hearing before a Nevada probate commissioner, the 93-year-old billionaire and his four eldest children have been engaged in a dispute that could determine the future of Fox Corp. and News Corp., which are the parent companies of Fox News and the Wall Street Journal, respectively. Murdoch’s family trust owns about 40% of each company.
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The hearing, whose final arguments concluded on Sept. 23, centered on Murdoch’s proposed changes to the trust, which was originally created to give equal control of his businesses to each of his four oldest children after his passing.
The New York Times reported that Murdoch sought to modify these terms so as to give his son Lachlan an elevated role, potentially sidelining his siblings Prudence, Elizabeth and James. The latter three siblings responded by taking their father to court, claiming that the effect of the changes would be contrary to their best interests.
The court has not yet delivered its ruling.
The saga bears a striking resemblance to the drama in the hit HBO series Succession, whose creators have cited the Murdoch family as inspiration. But the real-life stakes are clear, not just for the Murdochs but for anyone looking to protect their wealth and ensure a smooth transition for future generations — regardless of the size of their nest egg.
Rupert’s changing plans
Rupert Murdoch built an empire spanning multiple continents, with a net worth of $10.6 billion, according to the Bloomberg Billionaire Index. While his dealmaking prowess is considered legendary, his estate planning has left room for conflict and confusion.
In 2023, Murdoch stepped down as chair of Fox and News Corp., publicly backing his son Lachlan, emphasizing that they share the same values and vision.
“My father firmly believed in freedom, and Lachlan is absolutely committed to the cause,” Rupert wrote in a letter to his employees.
However, his decision to modify the family trust has sparked the legal battle with his other heirs, who feel disenfranchised.
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A survey conducted at the 53rd Annual Heckerling Institute on Estate Planning revealed that nearly half (46%) of professionals, including attorneys and trust officers, cited family conflict as the most significant threat to estate planning. Without proper planning, 58% of families experience disputes or face court control over assets, according to LegalShield.
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Know the role of probate
The Murdoch family’s ongoing legal battle shows how probate can complicate estate transitions.
According to Empathy, the probate process – used to validate and manage a deceased person’s estate – is often the most costly and difficult financial matter tied to death. Fees typically range from 3% to 7% of the estate’s total value, meaning a $750,000 estimate could incur costs between $22,500 and $52,500.
And, according to the American Bar Associations, probate can delay asset distribution for six to nine months, causing both financial strain and emotional stress on the families involved.
You can avoid some of these hurdles by establishing a living trust, which allows you to control and manage your assets during your lifetime while ensuring a smooth transfer after your death. A living trust lets you tweak things as your circumstances change, giving you peace of mind and more control over what happens to your assets.
Leave it in the will
During Rupert’s Murdoch’s 1999 divorce from his ex-wife Anna, the couple set up an irrevocable trust to secure long-term financial stability for their four children.
However, the ongoing legal battle shows even irrevocable trusts can lead to disputes. While a trust can offer protection and keep assets out of probate, its terms are generally more rigid. A will, on the other hand, allows for more flexibility since it can be updated to reflect life changes, such as divorces or shifts in family dynamics, like those currently dividing the Murdochs.
Patrick Hicks, general counsel of Trust & Will says, “Wills and estate planning are essential for everyone, not just the wealthy. Every person over the age of 18 should have an estate plan, no matter their financial situation,”
To ensure your estate plans align with your needs, it’s always wise to consult a financial professional who can guide you through the complexities of wills, trusts and probate. They can help you get everything in order and avoid potential family conflicts.
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Victoria Vesovski is a Toronto-based Staff Reporter at Moneywise, where she covers the intersection of personal finance, lifestyle and trending news. She holds an Honours Bachelor of Arts from the University of Toronto, a postgraduate certificate in Publishing from Toronto Metropolitan University and a Master’s degree in American Journalism from New York University’s Arthur L. Carter Journalism Institute. Her work has been featured in publications including Apple News, Yahoo Finance, MSN Money, Her Campus Media and The Click.
