The Murdochs and the Buffetts – succession planning for billionaires

Warren Buffet and Rupert Murdoch's succession plans have recently come under the media spotlight, revealing contrasting approaches to legacy and inheritance.

Billionaires’ estate planning is usually done in private but has huge ramifications. They have responsibilities to business stakeholders and their families. Their wishes will also have wider implications globally. Here, both have adopted prudent approaches to succession planning, but their aims have been very different.

The Murdoch Family

Murdoch’s succession planning has centred around his children and the future direction of his businesses. He is understood to have recently modified his plans to reflect his vision for those businesses and shifting family dynamics.

In December 2024, a Nevada court commissioner denied Rupert Murdoch’s attempt to amend a family trust (established by Murdoch in 1999). Murdoch previously intended for his four eldest children Prudence, Elisabeth, Lachlan, and James to control the family businesses, News Corp and Fox News after his death. This sought to ensure fairness and business stability. Mr Murdoch now seeks to favour only his eldest son, Lachlan.

The 1999 trust is understood to have been created around the time of Murdoch’s divorce from his second wife, to codify the succession of his media empire to the next generation. The trust specified that Murdoch had 50 per cent of the family voting rights (4 votes) with each child given one vote. Upon Murdoch's death, his votes would pass to his four eldest children. By the amendment, however, Murdoch’s shares would instead pass to Lachlan. He would have voting control, without interference from his siblings, and so could steer the direction of the media empire.

Whilst proceedings have taken place in private and the decision is understood to be being appealed, news outlets have reported that the attempt to alter the trust failed at first instance. The Nevada Probate Commissioner who put a stop to the amendment is said to have ruled that Murdoch and Lachlan acted in "bad faith," describing their efforts as a "carefully crafted charade."

The Buffett Family

The Buffett family’s approach centres on transparency and philanthropy. On the death of Warren Buffett’s first wife Susie in 2004, 96 per cent of her $3bn estate was transferred to their family foundation.

In a November 2024 letter to Berkshire Hathaway Inc shareholders, Buffett explained that he had gifted further shares in his business to charitable foundations. This continues his “2006 pledge”, by which Buffett vowed to give all of his shareholdings in Berkshire Hathaway for philanthropic causes.

Mr Buffett believes, “hugely wealthy parents should leave their children enough so they can do anything but not enough that they can do nothing”. He expressed scepticism about dynastic wealth and a wish that his children disburse all of his assets during their lifetimes.

Mr Buffett also advised parents to have their mature children read their wills, before signing them. Mr Buffett explained that he takes his children’s suggestions into consideration in his estate planning and that he changes his will regularly.

This philanthropic approach mirrors the decisions of other high-net-worth individuals, including Bill Gates, who publicly announced in 2011 that his three children would inherit a tiny portion of his overall wealth (a rumoured amount of $10mn each). Bill and Melinda Gates have given over $59bn to the Gates Foundation.

Future-proofed succession planning – six things to consider

Whether you are Elon Musk or a small business owner, succession planning needs to be approached carefully especially where there are complex and non-traditional family arrangements, the transfer of a thriving business or an international dynamic.

Openness

Mr Buffett’s transparent planning appears harmonious (although succession planning has an emotional dimension and we do not know how his children feel about the smaller legacies intended for them). Mr Murdoch’s approach has, in contrast, faced opposition and litigation. Transparency can benefit shareholder and stakeholder relations too, as seen through Mr Buffett’s reassuring communications with Berkshire Hathaway shareholders. This fosters a sense of security and maximises company prosperity.

Timing

Mr Buffett frequently revisits his will, allowing for adjustments over time. In contrast Mr Murdoch’s difficulty in amending a structure created 25 years ago highlights the importance of future-proofing succession arrangements, particularly where shares in a family business are settled into trust. Later life estate planning may be more susceptible to challenge (due to concerns about undue influence or lack of capacity) so early planning, with periodic revisiting, should be encouraged.

Flexibility

Flexibility is an important element of succession planning. Choosing a trustee or executor who understands your wishes and the wider landscape is important too. A trust may not be suitable if you might change your mind. There are other options such as family investment companies, foundations or lifetime giving. Voting rights in companies may be documented in separate constitutional documents rather than as an integral component of a trust structure.

Decision-making

Mr Buffett’s emphasis on unanimity amongst his children was done to provide checks and balances for important decisions and to protect his children from financial predators. It contrasts with Mr Murdoch’s move away from family consensus to a single base of power to facilitate swift business decisions. There are pros and cons to both. This will depend on the personalities involved and the dynamics between them.

Philanthropy

Philanthropy can be valuable, not only for altruism, but to cement family bonds and to publicly message family values.

Tax

Considering tax reliefs and savings is integral to international succession planning and business transfer. While regimes differ by jurisdiction, in England and Wales, substantial philanthropic legacies on death can reduce the inheritance tax chargeable. Changes to fiscal policy necessitate regular reviews of estate planning arrangements, particularly where assets are complex and multi-jurisdictional.

Succession planning is unique to each family and will reflect their aims and ethos. Where businesses are involved, due consideration should be given to existing, as well as future, arrangements to ensure continuity. Good communication and transparency minimises disputes after death.