Murdoch created a succession plan. However, he made some critical errors, landing him and his children in a public court battle and dooming family relationships. The planning issues resulted from a lack of clarity, power struggles over his media empire and family disputes, says a recent article from MSN, “Learn From Rupert Murdoch’s Errors—Create a Succession Plan Today to Protect Your Company’s Legacy.”
The trouble started when Murdoch appointed his son Lachlan as his primary heir. The other three children objected and sued their father. Murdoch wasn’t even dead, and the succession battle had begun. The company’s reputation and stability felt an impact, to say nothing of the family relationships.
A structured succession plan could have prevented this and much of what followed. With a succession plan, businesses of any size will have a road map for the future and avoid significant internal conflicts.
A recent survey from a major accounting firm in 2021 showed that only 30% of family-owned businesses have created and communicated a robust succession plan. If you own a business and don’t have a succession plan, everything you’ve worked for over the years could fall apart. Here are four lessons from the Murdoch debacle to consider.
Don’t wait to create a succession plan. Some estate planning attorneys say business owners should start preparing their plan about ten years before they expect to retire. The process of documenting the entire business, from how inventory is managed, transportation conducted, sales relationships and all the processes needed to create a proper plan takes time. Developing leadership and preparing for the human resources aspect of a transaction is equally time and labor-intensive.
Be completely open and honest with family members, key employees and other stakeholders. You’ll want everyone to know what to expect, understand what drove certain decisions and be on board with your vision for the future. Transparency does more than manage expectations, it reduces the potential for conflicts. If there are going to be problems with your succession plan, doing it in a timely manner, years in advance, will give you and your company time to address them.
Be able to separate your personal and professional lives. If your plan is to sell or gift your business to family members, there will be many benefits, including gift tax exemptions and income-splitting. However, there will also be challenges.
Plan for the unexpected. Business owners know things never go exactly as planned. Be ready to pivot with a succession plan, including multiple courses in case of change.
A good succession plan identifies key roles for those stepping into leadership positions. Those roles need to be defined clearly and communicated. Honestly assess the skills of the family members you intend to put into positions. Listen to trusted advisors who may have a less emotional response to decisions about family members.
Build a strong team of advisors. Your team will include an estate planning attorney, CPA, financial advisor and possibly a forensic CPA to evaluate the company’s value, processes and assets. If your retirement finances are linked to the transfer or sale of your business, there will be estate planning strategies to embrace to be sure there’s a happy ending for all concerned.
To learn more about estate planning in the East Valley, Gilbert, Mesa and Queen Creek, schedule your free consultation with Attorney Jake Carlson by using one of the links above.
Reference: MSN (March 28, 2025) “Learn From Rupert Murdoch’s Errors—Create a Succession Plan Today to Protect Your Company’s Legacy”