The 84-year-old media mogul’s surprise engagement to legendary supermodel Jerry Hall raises estate planning questions that go beyond doubts about the wisdom of courting another expensive date in divorce court.It’s a sad fact of life among the extremely rich that when a billionaire marries a model 25 years his junior, people assume she’s found a big new meal ticket and he’s gone crazy. After all, Rupert Murdoch has been burned so badly by multiple divorces that he should know better than trust his hard-built family fortune to so fragile a feeling as love. He could easily go the route of fellow billionaires and simply pursue all the romantic companionship he wants without making any affair legally binding. And with his 85th birthday on the horizon, the real threat his advisors need to face this time is the prospect that the happy couple is actually bonded for life. In that scenario, a billionaire like Murdoch has more to lose the better the relationship works out. Should death do us part Most mogul watchers thought Murdoch was done with marriage after he caught Wife No. 3 cheating on him a few years back. Settling that relationship cost him at least a $44 million Manhattan apartment and spousal support, and that’s over and above what the prenuptial contract gave her. Walking away from the previous wife added another $1.7 billion to the lifetime divorce bill. And while terms of the first split have gotten hazy 50 years after the fact, it’s a pretty good bet that busted marriages have been at least a $2 billion drain on Murdoch personally. With that track record to work with, I suspect that Murdoch’s advisors are making Jerry Hall sign away all rights to every penny in perpetuity if the relationship falls apart in his lifetime. They’re not stupid and she’s probably eager to prove she’s marrying him for love and not the money. Since she held onto a reported $15 million from the supermodel days with Mick Jagger, it’s not like she’d be left destitute in any event. That said, while her assets are significant in real dollar terms, it’s still a minuscule number compared to the Murdoch family’s collective wealth of $15 billion or so. On a proportional basis, it’s like a mere millionaire was marrying a working-class kid with barely a few thousand dollars in the checking account. In scenarios like that, a well-crafted prenup generally guarantees the “poor” partner at least a token sum to balance the scales if the relationship ever ends up in divorce court. For Murdoch, that bit of cash could add up to tens of millions of dollars easy, which is easily enough to double or triple Hall’s net worth. However, at a fantastically well-preserved 59, she’ll probably outlive him. That’s why this particular remarriage gets more complicated if it actually succeeds. Murdoch lives in New York, where prenuptial agreements are enforceable but spousal election overrides all other considerations when a partner dies. In other states, the lawyers could wall off Murdoch’s money by classifying it as separate property that Hall can’t inherit. Additional clauses in the marital agreement would prevent her from pushing back. New York, on the other hand, gives the widow a third of the probate assets no matter what the will or other estate planning documents say. She'd need to expressly opt out in advance. That means that if this truly is Murdoch’s final marriage, it might cost his family more than all the others put together. And while it’s a nice romantic gesture, that bill could ultimately leave his kids billions of dollars poorer. Fox remains invulnerable Of course Hall won’t be able to soften Murdoch’s control over his media empire even after he’s dead. Wife No. 2 made sure that the Fox voting stock went into a trust for the four children Murdoch had fathered up to that point. As a result, those assets won’t technically become part of his estate when he dies. If it’s not in the estate, it doesn’t pass through probate or become eligible for that New York spousal election, so Hall will never see those shares or exert any real power over the family business. It’s an old dynastic strategy in the publishing industry, designed to keep meddling spouses or stepparents out of the big decisions. For the Murdochs, the goal was to make sure that blood would run the show no matter who ended up with Dad. It worked to keep Wife No. 3 out of the line of succession for the decade she was in the picture. Unfortunately, since the trust holds so much stock in publicly traded companies – close to 40% of the shares of both Fox and News Corp. – its existence is a matter of regulatory record. She could see how much stock the trust held by reading the SEC filings. She could even figure out that it was based in Nevada and that Murdoch’s old corporate lawyer Arthur Siskind operates as trustee from a shell company in Delaware. That level of transparency gave her plenty of firepower when she and Murdoch were married, ultimately getting the two kids she bore him a share of the trust income. Now that a fourth wife is on the horizon, that side of the story doesn’t change. Hall is going to have a hard time convincing Murdoch to let her into the trust even if she can see where it is and what’s in it. However, I’m not convinced the trust represents the bulk of the family’s assets at this point. Add up the shares in the trust and you’re only looking at $3 billion in equity, maybe $4 billion if you really stretch. Murdoch was already fantastically rich when he formed the trust. Whatever wealth he kept for himself or earned in the meantime is presumably still on the table. And since the voting shares alone generate around $115 million a year in dividends, that’s a lot of wealth. Revocable trusts and similar deathbed transfer vehicles designed to disinherit the spouse don’t really fly in New York in particular, so if for some reason Hall survives Murdoch and the prenup left her a loophole, she can fight for a big slice of his billions in court. In that scenario, she stands to come out of her marriage a much wealthier woman if she stays with him to the end. Murdoch’s lawyers have learned a lot about defraying the cost of divorce, but they can’t fight the combination of true love and death.
