Media mogul Rupert Murdoch is making news with an effort to change an irrevocable trust. The 93-year-old Murdoch has been trying to alter a trust to ensure his oldest son, Lachlan, stays in charge of his media properties.
Trusts are private documents that don’t get filed in court unless there is a dispute. Trusts are an estate planning tool for giving away property, and they can be useful for minimizing estate taxes, making charitable contributions, avoiding probate, and protecting assets.
The Murdoch Family Trust holds various types of properties, including a family farm in Melbourne, Australia; the Murdoch art collection; and shares in Disney News Corp. and Fox. This irrevocable family trust set in place nearly a quarter of a century ago would divide control of the business equally between Murdoch’s four oldest kids Lachlan, James, Elisabeth, and Prudence upon the patriarch’s death. However, Murdoch is trying to change the trust to ensure his eldest son and chosen heir, Lachlan, would remain in charge of the media assets, including The Wall Street Journal, Fox News, and The New York Post.
Although the trust is supposed to be irrevocable, a Nevada probate commissioner recently ruled in a 48-page decision that Murdoch can amend it if he is able to prove that the changes are made in “good faith” with the sole purpose of benefiting all of its members. (A small stipulation in the irrevocable trust allows for changes as long as all of the mentioned heirs will benefit.)
Rupert Murdoch’s argument is that by taking away governance rights from James, Elisabeth, and Prudence, Lachlan will be able to manage the family business more profitably, thereby increasing the value of trust assets for all beneficiaries. He claims that “only by empowering Lachlan to run the company without interference from his more politically moderate siblings can he preserve its conservative editorial bent, and thus protect its commercial value for all his heirs.”
Murdoch is allegedly motivated by the desire to ensure that Fox News, The New York Post, The Wall Street Journal, and other media assets (The Times, The Sun) under the Fox Corp. and News Corp. banners maintain the politically conservative perspectives that they now present to viewers and readers.
The billionaire, alongside Lachlan, is also arguing a “lack of consensus” will disrupt Fox’s and News Corp.’s strategic direction. Murdoch’s three other oldest children, who are said to have been blindsided by the move, have reportedly hired their own legal team to contest their father’s plans. A trial is expected to begin in September.
Although James, Elisabeth, and Prudence’s ownership stake would not be impacted by Murdoch’s changes, the new version of the trust would increase Lachlan’s voting powers for Fox and News Corp. so that he can’t be challenged by his siblings.
This latest intrafamily battle sparked immediate comparisons to the HBO series Succession as well as other family-controlled business empires like the Redstones, who are in the midst of their own family drama with the sale of Paramount Global.
If you are interested in learning more about irrevocable trusts and estate planning, call The Law Offices of Max J. Paul at 561-807-1977 or email max@maxjpaul.com.