Not just the Murdochs: How to stop ‘destructive’ inheritance battles

2 weeks ago 5

Opinion

September 23, 2025 — 11.41am

The Murdochs made headlines when they settled their family battle recently, but you don’t need to be a billionaire to have trouble with siblings. Money and inheritance can bring out tensions in the best of families, and those fights can be exhausting and destructive.

As Donal Griffin, Sydney estate lawyer at Legacy Law and trust family adviser, often reminds me, one of the big flashpoints is the discretionary family trust. They work well for a couple, but once the next generation comes along things get tricky. Imagine being told in your 50s that you now have to run a trust with your brothers and sisters – it’s no surprise sparks fly.

The Murdochs’ Nevada hearing, details of which were leaked to the media, showed how courts apply a black-letter approach when interpreting trust deeds. These are often signed without much thought, then forgotten until a dispute erupts.

It’s not unlike a shareholders’ agreement, which is ignored while business runs on consensus – until suddenly, it doesn’t. While parents control trusts without involving their children, later they’re often horrified to discover their adult children may not run things the same way. As Griffin says, the transition is from a monarchy to a democracy – and there’s usually a revolution along the way.

In the end, family harmony is what matters most. Yet difficulties arise when there’s no clear mandate, leaving everyone free to argue about what parents intended. Add to this the very different financial positions of adult children at the time of a parent’s death, and the fact they may never have shared a substantial asset before, and tensions escalate quickly.

In the absence of clarity, old wounds resurface, alliances form – sometimes fuelled by spouses – and decision-making grinds to a halt. Deadlock sets in, and one sibling eventually demands action. At that point lawyers are consulted and the advice is often blunt: “Let the court resolve it – at least you’ll get a result.”

Don’t wait for trouble to strike. Talk openly with your family and get agreements in place while everyone is still on good terms.

Griffin, who has written a more comprehensive book on the topic called Be A Better Ancestor, offers six lessons – not legal advice – for families who share assets. And it doesn’t need to be a large business; it could just as easily be a discretionary family trust, a treasured beach house, or even the family home.

Private mediation is always better. It’s far wiser to agree in advance to settle disputes privately with advisers, so the pie isn’t eaten away by legal fees. If assets can be restructured rather than sold, much can be saved.

Control over the sale of assets is also vital. The Murdoch settlement included carefully timed announcements and share sales, clearly designed to achieve the best possible return. By contrast, courts dealing with families often order assets to be sold when they can’t be shared – sometimes at “fire sale” prices.

Ownership and management should be separated unless there’s a proven culture of harmony. In family businesses, one child may work for less than market rates, only to feel entitled to a greater share of the asset they’ve helped build while siblings stayed on the sidelines. A clear written agreement can minimise this sort of conflict.

Financial settlements don’t automatically repair family relationships. Griffin likes to say that succession law is really “family law for dead people”. Old rivalries, jealousy and disappointments can all erupt once parents are gone.

Disputes are so predictable that Griffin recommends what he calls a “prenup for siblings”. This means adult children agree in advance on who will value assets when the time comes, how discounts will apply, and how any sales will be handled.

And finally, siblings who work in the family business need to be properly rewarded. Paying them below market rates breeds resentment and can make them reactionary. Fair remuneration reduces one of the biggest triggers for family conflict.

The message is simple. Don’t wait for trouble to strike. Talk openly with your family, set clear rules, and get agreements in place while everyone is still on good terms. Do that, and you’ll have a much better chance of keeping harmony – and keeping the lawyers out.

Noel Whittaker is author of Retirement Made Simple and other books on personal finance. Questions to: [email protected]

Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.