Lessons from the Murdochs: Managing risk and preventing family legacy disputes

The complexities of family life for high profile families in the public gaze are rarely confined to private settings, and few examples illustrate this more vividly than the public rift in recent years within the Murdoch family. 

In late 2023, Rupert Murdoch sought to amend the Murdoch Family Trust to grant his eldest son, Lachlan Murdoch, effective exclusive control of the trust and thus de facto control of the media empire after his death. 

The stated rationale was commercial continuity: Murdoch and Lachlan argued that the trust’s existing equal-control provision risked corporate instability — and feared that his more politically moderate siblings (James, Elisabeth and Prudence) would shift editorial direction, particularly at Fox News.  

James, Elisabeth and Prudence strongly opposed the amendments, both on the basis of the trust’s clear terms and because they opposed the consolidation of control. They argued the trust should remain as written, with equal voting rights.  

After months of litigation and negotiation, the family reached a settlement on 8 September 2025, which effectively brought the long-running succession dispute to an end.

This very public conflict provides an important reminder for private clients, advisers and family offices alike. Disputes rarely erupt suddenly. They often emerge from years of misaligned expectations, unclear governance, structural gaps, or the absence of transparent communication. The risk is magnified in families with international footprints, particularly those with operating businesses and holding structures in the Middle East, where differing legal systems, cultural dynamics and succession norms can further complicate legacy planning.

This article explores the tools and governance strategies available to families seeking to protect their legacy, avoid conflict and foster cohesion across generations.

Common pitfalls in family shareholder structures

Many multi‑generational families operate through complex structures: international holding companies, trusts or foundations, and onshore operating subsidiaries in jurisdictions such as Saudi Arabia. While these offer tax, regulatory and operational advantages, they also introduce ownership‑versus‑control risks.

A recurring problem is the divergence between constitutional documents and the practical realities of how founders continue to act. Even when authority is formally delegated to directors, senior family members often retain de facto control. 

This exposes the family to claims of shadow directorship, challenges to director authority and disputes over the validity of transactions. These risks increase when families expand geographically, as is common for those with business interests in the Gulf, where local corporate governance requirements may differ from those in offshore jurisdictions.

Clear drafting is the most effective preventative measure. Shareholders’ agreements should contain explicit reserved matters, well‑defined delegation matrices and express exclusions of any implied authority. This ensures decisions are taken within a predictable, enforceable framework and reduces the opportunity for misunderstandings to escalate.

Exit mechanics and liquidity events

Many family shareholder agreements are either silent on exit rights or borrow heavily from private‑equity style mechanisms that are ill‑suited to family dynamics. When an exit dispute arises, courts are often asked to infer valuation mechanisms or determine what constitutes fair treatment. This is avoidable.

The solution lies in embedding clear, workable tools at the drafting stage. These include agreed valuation methodologies, internal buy‑out rights with defined funding mechanics and explicit treatment of minority discounts. 

Families operating in the Middle East should be particularly aware of valuation challenges where local market liquidity may be limited or where Sharia‑influenced rules interact with commercial valuation standards.

Unequal contribution and perceived injustice

Another common friction point arises where family members hold equal shares but contribute unevenly to management. Without clear frameworks, these disagreements can be framed as oppression or unfair prejudice.

Courts, however, usually enforce strict share rights and will not rebalance contributions unless expressly provided for. 

This is where contractual sophistication is crucial. Separating equity return, remuneration and incentive equity ensures that contribution is recognised through the correct channel. Management agreements can sit alongside shareholder documents to reinforce that unequal effort does not alter share rights unless the family chooses to formalise such adjustments.

Deadlock provisions and dispute resolution

Deadlock provisions frequently fail, not because families intend them to, but because triggers are too narrow, mechanisms overly complex or reliant on third‑party input without a defined process. When deadlock clauses fail, families often resort to public litigation, including winding‑up petitions, which can cause reputational damage similar to the very public disputes seen in the Murdoch situation.

Best practice includes defining deadlock clearly, adopting simple and enforceable mechanisms (such as single‑step or two‑step buy‑sell clauses) and incorporating arbitration or mediation as a fallback. 

This is especially valuable across Middle Eastern jurisdictions, where strong cultural preferences for private, relationship‑based dispute resolution often make arbitration or mediated settlement more suitable than open court proceedings.

Governance and transparency: The cornerstones of stability

Good governance protects families against allegations of mismanagement, breaches of fiduciary duty and regulatory challenge. The correct framework can prevent the common blurring of family and business roles, problems particularly prevalent in large families in the Gulf, where informal instruction at family gatherings or majlis can unintentionally undermine formal boards.

Good governance uses a layered model:

• A Family Council to address values, succession and family employment rules.
• A Shareholder level focused on rights, dividends and exits.
• A Board level dedicated to strategy, oversight and accountability.

Independent directors play a crucial role. They reduce emotional bias, provide external credibility and protect founders from personalising commercial disagreements. 

Transparency does not mean giving every individual a veto; it means consistent reporting, fair processes and predictable decision‑making.

Trusts, foundations and beneficiary expectations

In families using trusts or foundations, misunderstandings often arise around trustee discretion, protector powers and fiduciary boundaries. Without careful drafting, families face disclosure disputes, paralysis or litigation.

Robust documents should define protector powers and limits, exclude beneficiary rights to direct, establish clear governing law and forum clauses and include strong indemnities. This reduces the risk of beneficiaries challenging decisions out of misunderstanding rather than genuine grievance.

The Murdoch family’s public difficulties remind us how fragile family harmony can be when expectations, communication and governance are misaligned. While most families will never experience such public scrutiny, the underlying risks are universal. 

Particularly for families with cross‑border structures and ties to the Middle East, the combination of legal variation, cultural nuance and multi‑generational complexity demands sophisticated planning. By addressing governance early, drafting clearly, separating business and family roles and building transparent decision‑making frameworks, families can significantly reduce the likelihood of dispute. 

Legacy is not just about wealth. It is about continuity, cohesion and the ability to protect the family narrative for future generations.