“It’s their identity,” a family friend tells PEOPLE of Beatrice and Eugenie

(Left) Princess Beatrice and Princess Eugenie at Queen Elizabeth’s state funeral on Sept. 19, 2022.Credit : Tim Rooke/Shutterstock

Princess Beatrice and Princess Eugenie have an uncertain future following the arrest of their father, the former Prince Andrew, and renewed scrutiny of their mother, Sarah Ferguson.

While PEOPLE understood that Princess Beatrice and Princess Eugenie’s titles and positions were wholly unaffected when their father’s titles were removed in the fall of 2025, there are questions about where they now fit in the royal fold. A family friend tells PEOPLE in this week’s exclusive cover story, “They want to hold on to their royal status. It’s their identity.”

Andrew Mountbatten-Windsor was arrested on suspicion of misconduct in public office on Feb. 19, as authorities investigate whether he shared confidential information with the late Jeffrey Epstein while serving as trade envoy for the U.K. Meanwhile, the latest batch of Epstein files shed new light on Ferguson’s efforts to maintain contact with the convicted sex offender after his 2009 prison release amid her financial struggles.

Princess Beatrice and Princess Eugenie; Sarah Ferguson and ex-Prince Andrew.Dave Benett/Getty; Mark Cuthbert/UK Press via Getty

Beatrice, 37, and Eugenie, 35, grew up in the spotlight with a childhood lavish even by royal standards: exotic holidays, private jets, yacht trips, extravagant birthday parties and years spent moving comfortably among the ultra-wealthy. They lived in palace apartments, stayed in Alpine chalets and were raised with the assumption that royal status endured.

Andrew reinforced that belief as a father, having pushed for his daughters to be styled as “Her Royal Highness” and receive princess titles at birth. When Princess Eugenie married Jack Brooksbank in October 2018, Andrew insisted on a full-blown royal wedding at St. George’s Chapel at Windsor Castle, complete with security and public spectacle, despite mounting questions about his own standing inside the family.

According to sources, the Duke of York bristled at comparisons to Prince Harry and Meghan Markle’s wedding that spring, determined that his younger daughter’s ceremony not be seen as lesser.

“She’s a granddaughter of the Queen—a princess of the blood,” says Andrew Lownie, author of Entitled: The Rise and Fall of the House of York. “He believed she should get everything.”

Early criticism that the sisters worked too little and vacationed too much was often dismissed as unfair. Both Beatrice and Eugenie attended university and pursued professional careers, though their royal status inevitably shaped the opportunities available to them. They maintain royal residences at Kensington Palace and St. James’s Palace despite not holding working royal roles — an arrangement Andrew is said to have pressed for.

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Both princesses’ careers developed in relationship-driven private sectors, with Beatrice building a career in international tech partnerships and Eugenie working in the high-end art world.

Attention has now turned to their own financial dealings. The U.K. Charity Commission says it is assessing concerns raised about Eugenie’s nonprofit the Anti-Slavery Collective — whose missions include ending sexual exploitation — following media questions over spending and disclosures.

“Their economic prospects depended on remaining within the royal family,” Lownie says of Eugenie and Beatrice. “Their jobs in client relations are based on being princesses.”

Their proximity now carries repercussions, as the release of new Epstein-related material has sharpened questions about what Beatrice and Eugenie knew. Like their parents, the sisters are named in the files, including a reference to lunch with Epstein and their mother at his Palm Beach, Fla., mansion just days after his 2009 release from prison for solicitation of a minor.

Later emails allege that Epstein sought palace tours from the sisters for acquaintances, raising questions about how access was handled within the York family.

In the wake of the disclosures, the sisters spent Christmas Day in 2025 with their uncle King Charles rather than with their parents — a possible signal of where they see their next chapter.

Nevertheless, Lownie says, “They’re caught between a rock and a hard place over loyalty to their parents and their future.”