The Real Life Succession of a Media Magnate: Rupert Murdoch

Ever feel like your children are secretly counting on your demise and thinking just how they much their inheritance might be?  That’s exactly what has been put to Rupert Murdoch in a US Court last week.

Media magnate Rupert Murdoch wants to amend his family’s trust to give full control of his company, News Corp and Fox Corp, to his son Lachlan.  The history of this trust is long, but essentially, it was created in 1999 following Rupert’s divorce to his wife, Anna.  Reports are that Anna did not take a larger share of the magnate’s assets in the divorce settlement, and instead, insisted for the irrevocable trust, which stated the following:

1. Rupert’s children (all 6) will receive an equal benefit; and
2. Governance of the trust (and therefore the companies) falls to Rupert’s four eldest children (three of which are also Anna’s children) when Ruperts dies.

In 1999, both the family companies and the family relationships looked different to the current circumstances.  The companies were worth less and the children seemed to get along better.  As is the case with most families, time tells all.

Under the terms of the trust, Rupert can only change the terms if he can satisfy the Nevada Court that it is in the interest of all six beneficiaries that the trust be changed to give control to Lachlan on Rupert’s death, effectively cutting out the control of Rupert’s other eldest 3 children, Prudence, Elisabeth and Lachlan.

It’s been noted that Rupert’s concern and the basis of his argument to the Court is that the success of News Corp and Fox News hinges on its right-wing views and the conservative views of Lachlan are in line with the views of shareholders.  As his other children are less conservative in their views, they may gang up on Lachlan 3-1 and change the course of the company Rupert has built.

The trust is worth upwards of $8.8 billion dollars and it goes without saying, Rupert’s other eldest three children are unhappy with Rupert’s proposal and will be arguing against it in Court.  Whilst the decision of the Court will likely remain confidential, it remains a test of the Nevada Court about what is best for the beneficiaries versus what is best for Rupert and the potential longevity of the media empire.

A trust is a different structure to a Will in that a trust holds assets during a person’s lifetime and that trust continues to hold those assets once a person passes away.  As the trust holds the assets, meaning they are not held in your personal name, you cannot gift these assets under your Will.  Instead, under your Will you can gift control of the trust.  And control of who receives what and when, is everything in Estates.

Whether an Estate is worth $8.8 billion or $800,000.00, families find a way to argue over money once someone has passed away.  To minimise the argument, it is imperative for all of us to ensure that our Will and Estate Planning are prepared with specialist legal advice and consideration of the fact that life changes as time goes on. 

The Marsdens Estate Planning Department can assist with all aspects of Estate Planning, so please give us a call on 02 4626 5077.

The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.