The Murdoch family’s messy dispute over who will retain control of Rupert Murdoch’s media empire when he passes away has been grabbing headlines. While your affairs might not be in the spotlight, the case offers some useful insight into how to avoid family disputes. 

Following his second divorce in 1999, Rupert Murdoch established a trust foundation to hold the family’s stake in News Corp. While the Murdoch family holds a 14% stake, it controls 41% of the company votes. The trust set out that when Rupert dies, control of the company would be split between his four oldest children. 

A dispute arose when Rupert sought to change the terms of the trust so that his oldest son, Lachlan, would retain control and remove the voting power of his other three children. 

The ensuing court case generated media attention and, ultimately, the court ruled that the family trust could not be changed. 

So, what can you learn from the case when handling your estate plan and potential disputes? 

1. Effective communication with loved ones is important 

When setting out your estate plan or making changes to it, effective communication can make all the difference.

Rupert has stated that he believes the change to the trust was necessary to ensure the long-term profitability of News Corp. However, his three children who were set to lose their voting rights were reportedly blindsided by the news. 

When someone is surprised, they might be more likely to act based on the emotions they’re feeling and it could lead to disputes escalating.

So, being clear about your wishes and setting aside some time to talk to your beneficiaries could help you understand each other’s perspective and get everyone on the same page. 

2. Disputes aren’t always about monetary value 

Your estate covers all of your assets, from investments to material items. When you think about which ones will be the most important to your beneficiaries, you may believe it’s the assets with the highest monetary value, but this isn’t always the case.

Indeed, emotional attachment could lead to disputes too.

In the Murdoch case, modifying the trust wouldn’t have affected the financial inheritance of the beneficiaries, only their voting rights in News Corp. Yet, they felt strongly enough about it to go to court to block the changes. 

While you might not be passing on a multi-billion-pound company, your estate is likely to hold assets that are valuable to your loved ones. Even if they don’t have a high financial value it could lead to bitter disputes. 

Again, speaking to your loved ones could help you form a clearer idea about what’s important to them and where issues might occur. You may find they value a particular piece of jewellery for sentimental reasons, or they’d like to inherit a painting that reminds them of a childhood home.

When you’re writing your will, you might choose to name specific items you’d like to go to a particular beneficiary. 

3. Consider your family dynamics 

While passing on assets that will be equally split or controlled by your children might seem like a fair way to distribute your estate, family dynamics can be complex. 

For some families, sharing assets or working together to manage them can be effective. 

However, if your children have very different views on how to manage wealth, it could lead to conflicts arising. For example, if your children jointly inherited your home, would there be potential conflicts around what to do with the property and who would take responsibility for different tasks?    

In some cases, passing on separate assets to each beneficiary could make more sense. 

An estate plan could help you understand your assets and how you might pass them on in a way that aligns with your wishes and family dynamic. 

4. Consider potential conflicts when making an estate plan

Being proactive may help you avoid conflicts in the future. Considering where disputes might occur could allow you to have important conversations with loved ones or take steps to minimise the chance of them occurring before they arise. 

So, when making your estate plan, you might want to consider questions like how a relationship breaking down could affect how your assets are distributed. For instance, you may take steps to ensure wealth would remain within your family if your child divorced their current partner.  

5. Carefully consider your goals before establishing a trust 

A trust can be a useful tool if you want to pass on assets in a way that allows you to retain some control. 

When creating a trust, you’ll name a trustee to manage the trust on behalf of the beneficiaries, and you can set out conditions. The conditions you can apply depends on the type of trust you set up. So, if you want to create a nest egg for your grandchild, you might state the assets can only be used to cover educational costs during their childhood and they’ll receive full control of the trust when they turn 25. 

As Rupert Murdoch has discovered, changing the terms of a trust once it’s established can be very difficult or, in some cases, impossible. Similarly, once you’ve placed assets in a trust, you may not be able to remove them. 

So, if you think a trust could be right for you, take your time to assess your options.

Seeking professional advice when establishing a trust could be valuable. A financial planner might help you assess which assets to use and how transferring them may affect your financial security. In addition, a solicitor can offer advice on the different types of trusts and minimise the risk of mistakes or contradictions occurring when writing a trust deed. 

6. Carry out regular estate plan reviews 

As the Murdoch case has highlighted, your wishes might change over time. So, regular reviews of your estate plan could help ensure it continues to reflect your circumstances and goals.  

It’s often advised that you review your estate plan following major life events or every five years. 

Contact us to talk about your estate plan

Whether you need to create an estate plan or would like to review an existing one, we can help. We could work with you to understand your long-term goals, ensure your financial security later in life, and consider how you might pass on wealth during your lifetime or when you pass away.

Please get in touch to arrange a meeting. 

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning, trusts, or will writing.

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