Canadian Family Offices | Estate Planning
By Anna Sharratt, September 23rd, 2024
In Nevada, a battle is brewing that highlights the fallibility of family trusts. Earlier this week, legal proceedings began in the case of media tycoon Rupert Murdoch, worth an estimated US$20.3 billion, who is seeking to alter an irrevocable family trust in order to maintain control of his media empire, which includes Fox News and News Corp. He’s chosen Nevada as the site of this drama, a state where it’s possible to legally change irrevocable trusts. Murdoch has to prove that changing the conditions of the trust will benefit all heirs.
Although the court proceedings have not been made public, the high-profile case illustrates that trusts can be challenged. And that is a reality that has played out in Canadian courtrooms in recent years, too.
Ultimately, families should work closely with an advisor to ensure there’s a lot of communication, clarity and trouble-shooting… Disputes over trusts are all too common, even in Canada. Here are some ways to minimize the risk:
There’s no such thing as an airtight trust… disputes concerning trusts are common and frequently centre around whether a trustee is following the terms of the trust or isn’t using proper discretion as to how assets in the trust are being distributed. These instruments are only as effective as the people who are given the responsibility to manage them. No drafting of the terms of the [trust] will make it infallible to a judge’s oversight.
Matthew Rendely, Partner, Loopstra Nixon LLP
