Hotel magnate Barron Hilton announced yesterday that he's leaving 97% of his wealth to charity, dramatically cutting the fortune his children and grandkids will get.

That means granddaughter Paris Hilton, who once stood to inherit $100 million or more by some accounts, could end up with a measly $5 million or so.

"The whole family will be devastated, particularly [Paris' mom] Kathy," a pal of the clan told the Daily News last night.

"Some of them could be likely to contest the will - it'll be in the courts longer than Anna Nicole Smith versus J. Howard Marshall."

Barron Hilton is worth an estimated $2.3 billion, including the $1.2 billion he made from the sale of the Hilton Hotels and Harrah's casino chains.

All but 3% of the money will go into a charitable trust to benefit the Conrad N. Hilton Foundation, which was started by his father, the foundation announced yesterday.

The foundation funds clean water in Africa, education for blind children and housing for the mentally ill.

It doesn't buy jeweled collars for Chihuahuas named Tinkerbell.

Paris - who makes millions a year from her celebrity appearances and endorsements - had no immediate comment on her grandfather's bequest.

There have been conflicting reports about the socialite's relationship with the 80-year-old.

Author Jerry Oppenheimer has said Barron Hilton is so embarrassed by Paris' antics - from her sex tape to her drunken-driving bust - that he cut her out of his will.

But other sources have reported that the businessman was so impressed by her money-making abilities that he forked over a big chunk of her inheritance last year.

Although Barron Hilton's plans for his fortune are big-hearted, he wasn't always so charitable.

After his father, Conrad Hilton, died in 1979 and left most of his money to the foundation, Barron sued to get his hands on half the bounty.