Billionaire Warren Buffett has shared his thoughts on the future of his immense fortune and offered advice on inheritance in a message to his company's shareholders.
The Berkshire Hathaway CEO revealed his plans for wealth distribution in a letter posted to the company website. Mr Buffett announced that $1.1 billion of his Berkshire shares would be donated to his family's four foundations, with the remainder of his holdings to be gradually distributed by his three children after his passing.
The 94-year-old's message carried an introspective tone, reflecting on the inevitability of mortality. “Father time always wins. But he can be fickle – indeed unfair and even cruel – sometimes ending life at birth or soon thereafter while, at other times, waiting a century or so before paying a visit. To date, I've been very lucky, but, before long, he will get around to me,” he wrote.
Acknowledging the challenges his children may face due to their own advancing years — now aged 71, 69 and 66 — Mr Buffett said that he has appointed three potential trustees to ensure his wishes are honoured if his children cannot complete the task. “Three potential successor trustees have been designated. Each is well known to my children and makes sense to all of us. They are also somewhat younger than my children,” Mr Buffett wrote.
He underscored his preference for decisions within the foundations to be made unanimously and shared his approach to simplifying his will, which he reviews periodically.
Mr Buffett also offered advice for parents navigating the sensitive topic of inheritance planning. He said, “I have one further suggestion for all parents, whether they are of modest or staggering wealth. When your children are mature, have them read your will before you sign it.”
He stressed the importance of transparency, urging parents to explain their decisions to avoid misunderstandings. “Be sure each child understands both the logic for your decisions and the responsibilities they will encounter upon your death. If any have questions or suggestions, listen carefully and adopt those found sensible. You don't want your children asking “Why?” in respect to testamentary decisions when you are no longer able to respond.”
Reflecting on decades of observation, Mr Buffett noted how unresolved issues stemming from wills have caused discord among families. He recounted instances he and his late business partner, Charlie Munger, witnessed when miscommunication and perceived inequities led to fractured relationships.
“Jealousies, along with actual or imagined slights during childhood, became magnified, particularly when sons were favoured over daughters, either in monetary ways or by positions of importance,” Buffett wrote.
Yet, he also highlighted success stories of open discussions about a will bringing families closer and together.
“Charlie and I also witnessed a few cases where a wealthy parent's will that was fully discussed before death helped the family become closer. What could be more satisfying?” Buffett added.
According to Forbes, at the time of writing, the Berkshire Hathaway CEO had a net worth of $143 billion.
