Hudson Valley
Estate Planning
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Murdoch Case Should Give Irrevocable Trust Grantors Pause
As was reported in The New York Times, a Nevada court recently ruled against international media tycoon Rupert Murdoch in his attempt to alter the voting power of his children under his irrevocable trust. The trust, created in 2006, gave four of Murdoch’s children equally voting power in the trust upon his death. Last year, however, Murdoch sought to change the voting power to favor the son he has handpicked to succeed him as manager of his media empire.
The ruling should give pause to irrevocable trust grantors everywhere. As Murdoch has now learned, irrevocable trusts are very hard to change once established. As a result, I always coach my clients to consider the following questions before placing any property into an irrevocable trust:
- Do you own the property outright? (free of a mortgage or loan)
- To maintain your lifestyle, will you need to sell the property?
- Do you know who you want to inherit the property?
- Do you have an individual or institution you trust to serve as trustee of the property?
If you fail to fully consider these questions and potential worst-case scenarios, you end up in the same spot as Murdoch: paying significant legal fees to explore novel legal maneuvers that often fail.
