Billionaire investor Warren Buffett wrote a surprise letter to shareholders ahead of the Thanksgiving holiday, and the 94-year-old shared many personal thoughts about his children and his legacy.
With a net worth of $150.5 billion, according to Forbes, the Berkshire Hathaway CEO is considered one of the most successful investors of all time.
His widely read annual letter is usually published in February.
This year's letters, released Monday, took on a more personal tone as the “Oracle of Omaha” discussed his fortunate life, his children's inheritance and the importance of philanthropy.
It was also announced that the company would donate $1.2 billion to four family foundations: the Susan Thompson Buffett Foundation, the Sherwood Foundation, the Howard G. Buffett Foundation, and the Novo Foundation.
After his first wife, Susan Thompson Buffett, died of a stroke in 2004, Buffett vowed in 2006 to gradually donate his wealth to charity during his lifetime and after his death.
The gift brings Buffett's ownership of Class A voting stock to 206,363 shares, a 56.6% decrease from 2006.
“When Susie passed away, her estate was approximately $3 billion, and approximately 96 percent of this amount was donated to our foundation,” Buffett wrote.
“Additionally, she left our three children $10 million each, which was the first large gift we ever gave to our children. These bequests were made by a millionaire. reflects our belief that parents should leave their children enough to do everything, but not enough to do nothing.
At the time of his mother's death, Buffett said his children (Susan, 71, Howard, 69, and Peter, 66) were “not ready to handle the incredible wealth that Berkshire stock generated.” Ta.
“Nonetheless, their philanthropy increased dramatically with the 2006 Lifetime Pledge that I subsequently made and expanded upon,” he said.
“My children have now more than met our wishes and upon my death will be fully responsible for the gradual distribution of all of my Berkshire holdings. These are now my assets. It accounts for 99.5% of the total.
Noting his good fortune to live this long, Buffett said the downside is that our children are aging, and their life expectancy has “reduced significantly since our 2006 pledge.”
“I've never wanted to create a dynasty, and I've never wanted to pursue plans beyond my children,” he said.
“I know all three of them very well and have complete confidence in them. Future generations are a different matter. They will have to deal with an extraordinary distribution of wealth in a much different philanthropic context. , who can predict the priorities, intelligence, and fidelity of succeeding generations?”
“Yet it may take longer than my children's lives to deploy the vast wealth I have amassed, and tomorrow's decisions will be made more by a living person than by a dead person. There is a high possibility that the decision will be made more appropriately by the brains of the three people who
For this reason, Buffett said he has nominated three candidates to replace him as trustee.
“It’s all familiar to my kids and understandable to all of us,” he said.
“They are slightly younger than my children. But these successors are on the waiting list. I hope that Susie, Howie and Peter themselves will pay for all of my assets.”
Under the arrangement, all philanthropic decisions require a unanimous vote of the children, a requirement that Mr. Buffett said surprised even his wealthy friends.
“I explained that my children would forever be burdened by the urgent demands of very loyal friends and others,” he said.
“Second reality: When asked to make a large philanthropic donation, the answer “no” often prompts the potential donor to consider a different approach: another friend, another project. there is. Those who can distribute large amounts of money will forever be considered 'targets of opportunity.' ”
“This unpleasant reality is attached to this region, which is why the provision of “unanimous decision'' is in place. This restriction allows for an immediate and final response to grant applicants: “That's not like getting your big brother's approval.” And the answer will improve my children's lives. ”
Buffett also offered advice “for all parents, whether you have a modest amount of wealth or a lot of wealth.”
“Once your children are adults, have them read your will before you sign it,” he said.
“Make sure each child understands both the logic of your decisions and the responsibility they face in the event of your death. If they have questions or suggestions, listen carefully and be wise. Please adopt the opinion that you think is correct.You don't want your children to ask you “why?” Regarding testamentary decisions in case of inability to respond. ”
Over the years, Buffett and Berkshire Hathaway's late vice chairman Charlie Munger have said, “We've seen many families break up after a will's after-death instructions left beneficiaries confused and sometimes angry.'' ” he explained.
“In addition to real or imagined contempt during childhood, jealousy was compounded if sons received preferential treatment over daughters, especially in terms of money or important positions,” he said.
“Charlie and I have witnessed several cases in which well-discussed wills between wealthy parents during their lifetimes helped strengthen family bonds. What could be more satisfying?”
Berkshire Hathaway's Class B shares have risen more than 30% this year, outpacing the S&P 500's 27%.
Australia's richest former couple, mining billionaires Andrew and Nicola Forrest, have similarly vowed that their three children will not inherit the majority of their family's $35 billion fortune.
The funds will instead be distributed to a variety of philanthropic causes, including indigenous support, education reform and cancer research.
Mrs Forrest, who appeared on ABC's Australian Story in 2022, said she did not want her children to be “burdened” with such large sums of money.
“We live at home and have a great life, but money can't buy the most important things in life,” she said on the show.
“It is not in the children's interest to think they will inherit a large fortune.”
Mr Forrest echoed his wife's sentiments, saying it was an easy decision.
“It was an easy decision to give up everything except my personal belongings and items,” he says.
“You know, let’s not die rich. What does that mean?
