Warren Buffett, one of the most successful investors of all time and the fifth richest man in the world has outlined his intentions for Berkshire Hathaway and his wealth in the event of his death. In a letter posted on the website of the multinational corporation, "the Oracle of Omaha," made the announcement and stated that he had given millions of shares in Berkshire Hathaway to four family-affiliated charity trusts, as per a report in Fortune Magazine.
The 93-year-old converted 1,600 Class A shares into 2,400,000 Class B shares according to a regulatory filing. Of those shares, the Howard G. Buffett Foundation, the Sherwood Foundation, and the NoVo Foundation each received 300,000 shares, while the Susan Thompson Buffett Foundation received 1,500,000 shares.
In the letter to shareholders dated November 21, he said, "The donations itemized above repeat those made at Thanksgiving last year. They supplement certain of the lifetime pledges I made in 2006 and that continue until my death (at 93, I feel good but fully realize I am playing in extra innings)."
"My children, along with their father, have a common belief that dynastic wealth, though both legal and common in much of the world including the United States, is not desirable. Moreover, we have had many opportunities to observe that being rich does not make you either wise or evil. We also agree that capitalism - whatever its weaknesses, including the vast disparities in wealth and political influence that it delivers somewhat capriciously to its citizens - has worked wonders and continues to work wonders," he added.
He confirmed that his three children, who are currently between the ages of 65 and 70, are the executors of his current will and added that "99%-plus" of his wealth will go to his charity trust. "My three children are the executors of my current will as well as the named trustees of the charitable trust that will receive 99%-plus of my wealth pursuant to the provisions of the will. They were not fully prepared for this awesome responsibility in 2006, but they are now," he continued.
Mr Buffett disclosed certain information about how his wealth will be managed in the letter, stating that his three children must make decisions together. "Because of the random nature of mortality, successors must always be designated. Laws in respect to philanthropy will change from time to time, and wise trustees above ground are preferable to any strictures written by someone long gone. Whatever the rules-and rules are necessary-private philanthropy will always have an important place in America," he said.
Berkshire Hathaway has grown to a market cap of more than $780 billion with reportedly more than 380,000 employees and the company's CEO believes that the firm will thrive in his absence, even though mistakes will inevitably be made.
"Berkshire-one of the largest and most diversified companies in the world-will inevitably encounter human errors in judgment and behavior. These occur at all large organizations, public or private. But these mistakes are unlikely to be serious at Berkshire and will be acknowledged and corrected. We have the right CEO to succeed me and the right board of directors as well. Both are needed," he added.
He went on to say that while Buffett's holdings will back Berkshire's actions and traits in the near run, the company "before long" will stand alone and acquire "whatever reputation it then deserves." He concluded, "Decay can occur at all types of large institutions, whether governmental, philanthropic or profit-seeking. But it is not inevitable. Berkshire's advantage is that it has been built to last."
