In last week’s column, I shared lessons learned from 94-year-old renowned investor Warren Buffet in his 2025 letter to shareholders. Today we highlight his advice on inheritance planning, which aligns with my deceased father’s views on estate planning.

In a November 2024 Thanksgiving letter, Berkshire Hathaway CEO Warren Buffett outlined how he plans to transfer his wealth and made recommendations to parents on estate planning. It has been widely known that Buffett planned to give away the bulk of his wealth to charities upon his death. In his 2024 Thanksgiving letter, he disclosed that his three children will be responsible for the distribution of all his Berkshire holdings, which is estimated to be 99.5 per cent of his wealth.

It is important to note that Buffett’s net worth is estimated at US$155 billion.

Buffett and his late wife Susan Buffett believed that very wealthy parents should leave their children enough resources for them to achieve “anything”, but not too much that they “do nothing”. Their children were encouraged to do philanthropic undertakings and Buffett was pleased with the attitude and behaviour of his children in managing their affairs. He expressed gratitude for being alive and is cognisant of his mortality. His children are all seniors with ages ranging from 66 to 71 years old. He has complete trust in his children.

However, due to concerns about the possible lifespan of his children, he has designated prospective “successor” trustees who are known by all his children. These trustees are also younger than Warren Buffett’s children. Still, he prefers that his children be alive to disburse his assets.

Buffett’s children respect his wish that, in disposing of his Berkshire shares, the exceptional trust held by shareholders in him and his late business partner, Charlie Munger, will not be betrayed. He is pleased that his children have learned sufficiently and garnered many years of experience in philanthropy and human conduct.

Some of his wealthy friends have expressed concerns about the enormous trust he has in his children.

Buffet has put in place a condition for decision-making with regards to distributing his assets. He introduced a “unanimous decision” provision and all actions taken by the foundation will be done by a “unanimous vote”.

Warren Buffet’s advice to parents:

1) Parents should have their adult children read their wills before signing them. He stressed that it doesn’t matter whether assets are of modest or excessive value.

2) Each child should understand the reason for every decision made and their responsibilities upon the parents’ death.

3) All questions or recommendations made by the children should be considered before final decisions are made. He followed in the tradition of his father. Buffet said that he oftentimes used suggestions made by his children.

He had witnessed families grow apart upon the reading of wills after death. The content of the will led to anger and jealousy in some instances. On the other hand, the reading of the will to the beneficiaries before the death of wealthy parents has proven to bring some families closer after death.

I now speak of my father. He was not wealthy. A building contractor by profession, who owned several properties but had a large family, I recall as a child my father would tell us (his children) that what he owned belonged to us. We learned early what a will was.

When we became adults, he would invite us to his home to discuss his will. If we weren’t all available, then he would resort to one-on-one discussions, but we all knew what was in his will before he died. He would declare repeatedly that he wanted no confusion after his “eyes are closed”. We also knew and respected the person he chose as executor of his will.

My father carefully crafted his will and paid attention to details. The reading of his will was a harmonious occasion for us as siblings. It pulled us together instead of driving us apart.

Concerning Warren Buffet’s inheritance plan, many deserving people stand to benefit from his philanthropy. He acknowledged the support of his wives in supporting his philanthropic endeavours. As he put it, they didn’t believe in “dynastic wealth”. They believed that “equal opportunity should begin at birth” and didn’t seek satisfaction in knowing that others yearned for their wealth.

Buffet’s vast amount of wealth will be passed to others who he deemed “were given a very short straw at birth”. He is heartened that many long-standing Berkshire shareholders have provided a comfortable and fulfilling life for themselves and their families and have given back to the less fortunate. He is proud of the time spent by his children in helping those who are in need. According to him, his children “are not pre-occupied with wealth”.

Estate planning is a legal process that determines how an individual’s assets will be administered or distributed after death. “If you do not have a will or a plan for your estate, then the Government has one for you.” – Shez Christopher

Grace G McLean is a financial advisor and retirement specialist at BPM Financial Limited. Contact her at gmclean@bpmfinancial or visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. E-mail her at livingaboveself@gmail.com

Making a will is a very important part of estate planning. (Graphic: Melinda Gimbel)