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Family feuds over generational wealth and property are not uncommon, whether it is siblings fighting over property, sons getting the better of daughters, or interference of extended family and friends. And, that is why Warren Buffett has yet again given away an additional $1.1 billion donation in Berkshire Hathaway stock to his family’s four foundations.
“I’ve never wished to create a dynasty or pursue any plan that extended beyond the children. I know the three well and trust them completely. Future generations are another matter. Who can foresee the priorities, intelligence and fidelity of successive generations to deal with the distribution of extraordinary wealth amid what may be a far different philanthropic landscape?” the veteran investor wrote in a letter on November 25.
The 94-year-old has long pledged to give away 99% of the fortune he built at Berkshire, the Omaha, Nebraska-based conglomerate he has been running since 1965. Buffett, also known as the Oracle of Omaha owns about 37.6% of Berkshire Class A shares.
The man who has a $150 billion personal fortune, in his letter acknowledged that the massive wealth he’s collected may take longer to deploy than his children (now aged 71, 69 and 66) live. And tomorrow’s decisions are likely to be better made by three live and well-directed brains than by a dead hand, he said.
Buffett has instead appointed three potential successor trustees of his charitable trust to potentially succeed his children in disbursing his wealth. “Each is well known to my children and makes sense to all of us. They are also somewhat younger than my children. But these successors are on the waitlist. I hope Susie, Howie and Peter themselves disburse all of my assets,” the Berkshire Hathaway CEO said in his letter.
He has affirmed that each of them respects his wish that the disposition program for his holdings of Berkshire shares in no way betrays the exceptional trust Berkshire shareholders bestowed upon Charlie Munger and himself.
He said that in the past 19 years, he has had the chance to observe his children in action and they have learned much about large-scale philanthropy and human behavior. Each one of them has overseen teams of 20-30 for many years and has observed the unique employment dynamics affecting philanthropic organisations.
Why does Warren Buffet have this extraordinary confidence in his children and trustees?
He explained that it could happen that his children would forever be besieged with earnest requests from friends and others. And a second reality is that, when large philanthropic gifts are requested, a “no” frequently prompts would-be grantees to ponder a different approach – another friend, a different project, whatever, he wrote in his letter.
“Those who can distribute huge sums are forever regarded as “targets of opportunity.” This unpleasant reality comes with the territory. Hence, the “unanimous decision” provision. That restriction enables an immediate and final reply to grant-seekers: “It’s not something that would ever receive my brother’s consent.” And that answer will improve the lives of my children. My unanimity clause, of course, is not a panacea – it clearly isn’t workable if you have nine or ten children or stepchildren. And it doesn’t solve the daunting problem of intelligently distributing many billions annually.”
Warren Buffet’s suggestion to parents
Buffett's suggestion for all parents, whether they are of modest or staggering wealth, is that when their children are mature, have them read your will before you sign it. Be sure each child understands both the logic for your decisions and the responsibilities they will encounter upon your death.
If any have questions or suggestions, listen carefully and adopt those found sensible.
“I change my will every couple of years – often only in very minor ways – and keep things simple. Over the years, Charlie and I saw many families driven apart after the posthumous dictates of the will left beneficiaries confused and sometimes angry. Jealousies, along with actual or imagined slights during childhood, became magnified, particularly when sons were favored over daughters, either in monetary ways or by positions of importance. Charlie and I also witnessed a few cases where a wealthy parent’s will that was fully discussed before death helped the family become closer. What could be more satisfying?”
“I’ve never wished to create a dynasty or pursue any plan that extended beyond the children. I know the three well and trust them completely. Future generations are another matter. Who can foresee the priorities, intelligence and fidelity of successive generations to deal with the distribution of extraordinary wealth amid what may be a far different philanthropic landscape?” the veteran investor wrote in a letter on November 25.
The 94-year-old has long pledged to give away 99% of the fortune he built at Berkshire, the Omaha, Nebraska-based conglomerate he has been running since 1965. Buffett, also known as the Oracle of Omaha owns about 37.6% of Berkshire Class A shares.
The man who has a $150 billion personal fortune, in his letter acknowledged that the massive wealth he’s collected may take longer to deploy than his children (now aged 71, 69 and 66) live. And tomorrow’s decisions are likely to be better made by three live and well-directed brains than by a dead hand, he said.
Buffett has instead appointed three potential successor trustees of his charitable trust to potentially succeed his children in disbursing his wealth. “Each is well known to my children and makes sense to all of us. They are also somewhat younger than my children. But these successors are on the waitlist. I hope Susie, Howie and Peter themselves disburse all of my assets,” the Berkshire Hathaway CEO said in his letter.
He has affirmed that each of them respects his wish that the disposition program for his holdings of Berkshire shares in no way betrays the exceptional trust Berkshire shareholders bestowed upon Charlie Munger and himself.
He said that in the past 19 years, he has had the chance to observe his children in action and they have learned much about large-scale philanthropy and human behavior. Each one of them has overseen teams of 20-30 for many years and has observed the unique employment dynamics affecting philanthropic organisations.
Why does Warren Buffet have this extraordinary confidence in his children and trustees?
He explained that it could happen that his children would forever be besieged with earnest requests from friends and others. And a second reality is that, when large philanthropic gifts are requested, a “no” frequently prompts would-be grantees to ponder a different approach – another friend, a different project, whatever, he wrote in his letter.
“Those who can distribute huge sums are forever regarded as “targets of opportunity.” This unpleasant reality comes with the territory. Hence, the “unanimous decision” provision. That restriction enables an immediate and final reply to grant-seekers: “It’s not something that would ever receive my brother’s consent.” And that answer will improve the lives of my children. My unanimity clause, of course, is not a panacea – it clearly isn’t workable if you have nine or ten children or stepchildren. And it doesn’t solve the daunting problem of intelligently distributing many billions annually.”
Warren Buffet’s suggestion to parents
Buffett's suggestion for all parents, whether they are of modest or staggering wealth, is that when their children are mature, have them read your will before you sign it. Be sure each child understands both the logic for your decisions and the responsibilities they will encounter upon your death.
If any have questions or suggestions, listen carefully and adopt those found sensible.
“I change my will every couple of years – often only in very minor ways – and keep things simple. Over the years, Charlie and I saw many families driven apart after the posthumous dictates of the will left beneficiaries confused and sometimes angry. Jealousies, along with actual or imagined slights during childhood, became magnified, particularly when sons were favored over daughters, either in monetary ways or by positions of importance. Charlie and I also witnessed a few cases where a wealthy parent’s will that was fully discussed before death helped the family become closer. What could be more satisfying?”
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