Warren Buffett, CEO of Berkshire Hathaway, has an enormous estate estimated at nearly $163 billion, three children and a plan for his wealth. He’s also got advice for parents about estate planning, as reported in a recent article from yahoo! finance, “Warren Buffet Offers One Piece of Estate Planning Advice to the Middle Class.”
Buffett has an annual letter to shareholders in which he comments on finance and families, among other topics. In the 2024 edition, he had a lot to say to parents. The primary advice he offered is to have adult children read their parents’ will and for the parents not to sign it until the children have had a chance to read it. He says this prevents any surprises after the parents’ death and tells the children what to expect when their parents do pass.
He believes sharing the estate plan is worthwhile so children can ask questions and make suggestions before the will is set in stone. Parents should not just show the will but explain what each part means, so their children understand the logic behind the decisions and the responsibilities they may have upon the parent’s death.
Buffett believes that sharing the will’s contents can help prevent fighting among family members who might otherwise be angry and resentful. Giving the family a chance to learn how the estate was planned could make the family even closer.
Buffett’s own estate planning is more public than most billionaires. He is donating $1.1 billion of his Berkshire Hathaway shares to the family’s four foundations, with the three children responsible for distributing the rest of his holdings after he dies.
He added an interesting provision to his estate plan. All three of the Buffett children must agree on what to do with the money they are donating. If one disagrees, the other two must respect the third’s wishes. This will either make it harder for them to give away the money or be instructive in teaching them how to work together. Only time will tell if this strategy works for the Buffett family.
While you may not have billions in your estate to give away, your family will still be faced with decisions about their inheritances, regardless of their size. Some families don’t talk about money or death, which often leads to problems after parents have passed.
Having the children read the will may be hard for some families. However, discussing what the will contains and the thinking behind the decisions is something to discuss with your estate planning attorney. There are families where discussions are productive and helpful. However, there are also families where the dynamics preclude such an open discussion.
Your estate planning attorney will have years of experience to draw on and can advise how to foster communication among family members. It’s ultimately your decision. However, knowing what other families have done is a helpful discussion to have with your estate planning attorney.
Reference: yahoo! finance (Feb. 16, 2025) “Warren Buffet Offers One Piece of Estate Planning Advice to the Middle Class.”