Oct 13, 2024
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For pretty much everyone else on the planet, the idea of hoarding Warren Buffett’s wealth (estimated to be between $132 billion and $148 billion) is flat out impossible. Perhaps that’s why it’s somewhat surprising Buffett once refused to help his daughter when she asked for a $41,000 loan to remodel her kitchen. With about 3,000 times that sum in the bank, why say no?
Buffett's rationale was straightforward: he believes in independence and hard work. Or, put differently, he wants merit, not nepotism, for his own children. That’s why he told his daughter to "go to the bank like everyone else", rather than relying on the Bank of Dad to fund any renovations.
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Perhaps it seems harsh. But he's the type of parent who believes in chores, responsibility, and hard work. Whether or not you’re the same, you should ensure your adult children won’t have any inheritance headaches when you eventually pass on your wealth.
Here’s what we know about Buffett's will — and how to make navigating this touchy subject a little easier for you and your family.
Buffett’s approach to wealth
Most of Buffett’s wealth will only be shared with his kids once he passes on. He’s famed for saying you should “give your kids enough so they can do anything, but not so much that they'll do nothing.”
Given his children are now all adults, none of whom require his financial support, his will is very specific with regards to how they will spend his money.
Buffett announced earlier this year that he’ll donate his fortune to a charitable trust managed by his three children when he dies. Prior to this statement, he’d indicated his wealth would be going towards the Gates Foundation.
As Buffett puts it, “Society has a use for my money; I don’t”.
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Why estate planning matters for everyone
Estate planning isn’t just for multi-billionaires. While 62% of Americans agree that having a will is “important” before they pass, only 32% of Americans have actually made one.
It’s an alarming discrepancy, because making a will is not only important if you any assets in your name, but also play a critical role in appointing guardians for young children. You can even outline your end-of-life preferences for medical care.
Trust & Will is an organization seeking to flip that narrative, by providing helpful, concise, and human support. They want to make estate planning simple, accessible, and affordable for all Americans.
You can easily create, edit, manage and share your will online through their helpful platform. That means you can make sure your loved ones know, understand and have input on exactly what your plan is, before you pass.
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In the words of Buffett, “I don’t sign a will until my children have read it”.
Setting up a trust
Wills are important, but for some, trusts are a crucial part of estate planning, too.
Trusts have even greater control than wills do in terms of how your assets are distributed. A trust will help your loved ones avoid probate, which can be a long and costly legal process where assets are transferred to beneficiaries, and any remaining debts or taxes are paid from the estate.
Making a trust is a surefire way to ensure that your wealth is handled in the exact way you’d like it to be — without the need for your family to spend precious time and money in probate court. These specifications can include age specifications or asset use rules. All while saving your family time and money by avoiding probate court.
Buffett’s trust is crystal clear that his kids need to spend his wealth on charitable ventures, and that they have 10 years to decide where it should be allocated.
If you’re beginning your estate management process and are looking for research, comparisons, or industry definitions to better understand the landscape, Trust & Will can make the important process of estate planning easy with advisors who are patient and understanding. They’re committed to helping Americans seeking answers about the complexities of estate planning with advice that is both professional and empathetic.
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Gemma Lewis is a freelance contributor with her CFA UK Certificate in Investment Management. She has navigated the ever-evolving world of financial technology as both a product manager and investment analyst, having earned her Master’s of Business from the University of St Andrews, and Bachelor of Commerce from McGill University. Her writing and commentary has been featured across top-tier publications, including Forbes, the BBC, Financial Times, Telegraph, Yahoo!, Motley Fool, and Fortune. If she's not writing, she's either reading, or running around and exploring the great outdoors.
