In last week’s 200th post in my Family Legacy Planning series, I reflected on some of my personal favorite posts. Looking back over those 200, one of the most popular and recurring subjects is Warren Buffett, the Oracle of Omaha. People are fascinated with everything Buffett says and does. Today I’ll share an update on Buffett’s estate plan that he recently revealed.
My personal fascination with Buffett started years ago when our family made the annual pilgrimage to Omaha for the Berkshire Hathaway annual meeting. As many as 50,000 gather each year and hang on every word as he answers questions from selected attendees. As I’ve written in this blog, I had the privilege three times of asking questions of Buffett. Click on this link for a prior post covering my questions on Buffett’s estate plan, his philanthropy, and his views on preparing heirs.
For a long time, Buffett’s Will leaves more than 99% of his estate to charity (Berkshire Hathway Inc. News Release, Business Wire, June 28, 2024). With a net worth of more than $100 billion, that money will do a lot of good. But who gets to decide what charities to support? That’s the big change Buffett recently disclosed.
In an earlier version of his Will, Buffett (then the world’s second richest man) was entrusting that task to the world’s then richest man, Bill Gates. Although his lifetime gifts to the Gates Foundation exceed $39 billion, Buffett has decided that’s enough.
Why the shift? The notoriously modest-living (some even say frugal) Buffett expressed concern over Bill Gates’ extravagant billionaire lifestyle—homes, planes, fast cars, art, and a big personal staff. He also has “been bothered by what he saw as the bloat and inflated operating costs” of the Gates Foundation. (Anupreeta Das, “Has the Long Friendship of Bill Gates and Warren Buffett Reached Its Final Act?,” The New York Times, August 4, 2024).
In place of the Gates Foundation, Buffett’s Will now creates a charitable trust to be administered by his three children—Susan, Howard, and Peter. His kids will disburse the funds over a ten-year period following Warren’s death. But here’s the catch: the three must unanimously agree on how to donate the funds. Given that they each have very divergent charitable priorities, many speculate Buffett may be setting up “a version of a philanthropic ‘Succession’” battle. (Madeline Berg, “Warren Buffett Wants His Children to Give Away His $130 Billion Fortune. Does that Set Up a ‘Succession’ – Style Fight?,” Business Insider, July 11, 2024).
Susan, a full-time philanthropist, favors social justice, education, and healthcare. Howard, a farmer and former sheriff, focuses on food security, crime, human trafficking, and aid to Ukraine. Peter, a musician and composer, supports Indigenous communities and combating hunger. It’ll be interesting to see how this unfolds.
Buffett defends his decision after seeing how his children have matured over the years. “’I have 100% trust in how they will carry things out… I like to think I can think outside the box, but I’m not sure if I can think outside the box when it’s 6 feet below the surface and do a better job than three people who are on the surface who I trust completely.’” Buffett adds that his children will be able to respond to any future law changes governing taxes and foundations. (Karen Langley, “Warren Buffett Gives Us a Preview of His Will,” The Wall Street Journal, June 28, 2024).
Here’s my key takeaway: Don’t lock away your Will and fail to update it periodically. Our rule of thumb at The Blum Firm is to review your estate plan at each Presidential election. Over time, your views and your wishes may change. When that happens, it may be time to follow Warren Buffett’s lead and change your Will.
Marvin and Laurie with business and philanthropic role model, Warren Buffett.