Simple Trust Mistake Costs Murdoch Millions — How to Avoid

Simple Trust Mistake Costs Murdoch Millions — How to Avoid Same Situation, Even on Smaller Scale- It would seem any estate plan for a multi-billionaire like Rupert Murdoch would be bulletproof. However, his was flawed. The problem and a solution are presented in a recent article from AOL, “Rupert Murdoch Made A Simple Mistake When Constructing His Trust. It Cost Him $3.3 Billion to Fix. Here’s What Estate Planners Say You Should Do Instead.”

The Murdoch family fortune includes two public companies: News Corp, which owns The Wall Street Journal, The Times of London, and the New York Post. Fox Corp owns Fox News and the broadcast, cable, business and sports networks. Fox Corp has a market capitalization of approximately $29 billion, and News Corp’s market capitalization is $15.5 billion.

The controlling entity is the Murdoch Family Trust, created in 1999 as part of Rupert Murdoch’s divorce settlement with his second wife. It owns about 40% of the voting stakes in both News Corp and Fox Corp. Four children are equal beneficiaries with equal voting power.

At the time, splitting the control four ways looked like a fair way to prepare for the future. It was also a recipe for disaster.

Lachlan was named sole CEO and successor to both companies in 2023. In 2024, Rupert tried to amend the trust to give Lachlan sole voting control to preserve Fox’s conservative editorial stance. Son James had very publicly broken with the family over how coverage of the Australian bushfires was handled, and this was just the start.

Rupert brought his case to a Nevada court in 2024 to make a change. Nevada’s probate commissioner rejected the change, saying both Rupert and Lachlan had acted in bad faith. The original four-way structure remained intact.

The family’s solution was to buy its way out. Three of the four siblings, Prudence, Elisabeth, and James, agreed to accept $1.1 billion each to exit the trust and relinquish any voting rights. Lachlan became the sole decision-maker.

Simple Trust Mistake Costs Murdoch Millions — How to Avoid Same Situation, Even on Smaller Scale

Was this a win? The three siblings got a hefty payout; one son got complete control. The trust's flaw was structural: an irrevocable trust with four co-equal beneficiaries, equal voting power and no mechanism to resolve disagreements set the stage for estate battles. There are ways to prevent this scenario:

Trust protector provisions. The trust names an independent third party with authority to approve modifications without court involvement, serving as a built-in escape valve.

Decanting the trust. Transferring trust assets into a newly drafted trust with updated and less stringent terms. This needs to be handled carefully but can provide a solution.

Nonjudicial settlement agreements. Let the trustees and all beneficiaries resolve a conflict without going to court.

Special powers of appointment. Gives a designated party flexibility to determine which beneficiary ultimately receives what, without rewriting the entire trust.

Sub-trusts for each beneficiary. Create sub-trusts for each beneficiary so each oversees their inheritance and is not dependent on the others.

Periodic reviews of the trust. Revisiting the trust terms every few years, or after major life events, may have reduced the friction of the Murdoch fight.

While the Murdoch family could afford the $3.3 billion fix, most of us can’t. Flexibility needs to be part of the trust from the start. If it’s too rigid, no matter the size of the estate, trouble will follow. Talk with an experienced estate planning attorney about how to preempt these kinds of disputes before they happen.

Schedule your phone consultation: THE LAW OFFICES OF CLAUDE S. SMITH, III

Simple Trust Mistake Costs Murdoch Millions - How to Avoid Same Situation, Even on Smaller Scale

Reference: AOL (Aug. 19, 2026) “Rupert Murdoch Made A Simple Mistake When Constructing His Trust. It Cost Him $3.3 Billion to Fix. Here’s What Estate Planners Say You Should Do Instead.”