Rupert Murdoch’s 1999 Divorce Put the Empire Into a Trust His Ex-Wife Insisted On, With Her Three Children Holding Equal Votes. In 2024 He Tried to Rewrite It at 93, a Nevada Court Said No, and Last Year Her Three Kids Each Walked Away With $1.1 Billion, Because the Trust She Insisted On Held
At 93, one of the world's most powerful media moguls tried to rewrite a trust he had signed decades earlier, and a Nevada court told him he could not touch it. What his second wife insisted on during their 1999…
If you set up an irrevocable trust, or you’re named as a beneficiary, the document can bind the person who created it. That’s the core of the irrevocable trust rule the Murdoch family fought over in a Nevada court.
When the founder tried to change the terms, the trust held, and three of his children each walked away with about $1.1bn instead of being cut out of control.
How a 1999 Divorce Locked In Four Equal Votes
Rupert Murdoch created the Murdoch Family Trust in 1999 during his divorce from his second wife, Anna, shortly before he married Wendi Deng. It was designed to keep his four oldest children from losing their inheritances to any children he had later. Rupert held four of the eight shares, and Prudence, Elisabeth, Lachlan, and James each got one.
Prudence is his daughter from his first marriage, so the equal-vote group included one child Anna didn’t have. His younger daughters, Grace and Chloe, have no voting rights under the trust. The trust holds the family’s voting control of Fox Corp (NASDAQ:FOXA | FOXA Price Prediction) and News Corp (NASDAQ:NWSA).
Why a Founder at 93 Couldn’t Rewrite His Own Trust
In December 2023, Rupert and Lachlan asked the court to change the trust so Lachlan would hold sole control after Rupert’s death. The trust allowed an amendment only if Rupert acted in “good faith” and for the sole benefit of the beneficiary involved. On December 9, 2024, Nevada probate commissioner Edmund Gorman Jr. ruled against them. He found “bad faith” and called the plan a “carefully crafted charade.”
The family settled in September 2025 for $3.3 billion. Lachlan took control of a new trust. Prudence, Elisabeth, and James stopped being beneficiaries of any trust holding Fox or News Corp shares, and they accepted a reported 12-year standstill. Lachlan’s first offer was 60% of the value of their shares. He ended up paying around 80% of a higher share price.
Tax Code Rule That Makes Irrevocable Mean Irrevocable
The federal anchor is 26 U.S.C. § 2038(a)(1). It pulls trust property back into your taxable estate if, at your death, you still hold a power to “alter, amend, revoke, or terminate” it. Giving up control is the price of moving assets out of your estate.
For 2026, the basic exclusion is $15,000,000 per person under 26 U.S.C. § 2010(c)(3)(A), with inflation adjustments for deaths after 2026. In 2024, 7,195 estate tax returns were filed and 2,663 owed net estate tax.
Who Gets Protection and Who Gives Up Flexibility
This setup suits parents in second marriages, divorcing spouses negotiating for their children, families with estates near the federal exclusion, and beneficiaries who want their share protected from a later change of heart. It’s a poor fit if you want to freely rewrite your plan.
A revocable living trust gives you that freedom, but Section 2038 still treats its assets as part of your estate. Most estate messes trace back to a missed form, an outdated beneficiary, or an untitled account, and we put the full cleanup checklist in a free guide.
How to Build This Lock Into Your Own Plan
- Decide whether you need revocable flexibility or irrevocable protection before you sign anything.
- If you’re divorcing, get the trust terms written into the settlement so the protection doesn’t depend on future goodwill.
- Write any amendment power narrowly. The court applied the Murdoch trust’s good-faith and sole-benefit test.
- Ask about the provisions estate planners now recommend: protector provisions, decanting options, and periodic reviews. A trust protector is a named third party who can make limited changes.
- Fund the trust with gifts. The 2026 annual gift exclusion is $19,000 per recipient, and larger gifts count against the $15,000,000 lifetime amount.
- If you’re a beneficiary, keep a copy of the trust document. Your right to object depends on its terms.
Catch: Irrevocable Works Against You Too
The lock that protected three siblings also barred the person who built the empire. Changing an irrevocable trust over a beneficiary’s objection can mean a full formal hearing. The Murdoch dispute ran a seven-day hearing, and the schedule listed some fifty lawyers. Equal votes also let a group of heirs outvote a chosen successor. Rupert and Lachlan paid billions to remove that risk of deadlock.
The tax rule has its own trap. Keeping a broad power to amend can drag assets back into your estate, and Section 2038 also covers any such power you relinquished during the 3-year period ending on the decedent’s death. You can’t fix the problem by giving up the power on your deathbed. If you wrote your trust years ago, compare its voting and amendment terms with your current family.
Contact [email protected] for any questions or corrections.
David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
