Warren Buffett is not only a master of investments, but also a role model when it comes to estate planning. With these tried and tested tips, he shows how wealth can best be passed on.
• Buffett is a role model for many investors
• Tips for estate planning
• Buffett puts trust in his children
Many investors are interested in the investment strategy and tips from stock market legend Warren Buffett. But the Berkshire Hathaway CEO not only has wise advice when it comes to stock trading, but also has some tips when it comes to estate planning.
Discuss the will
For example, in a letter to investors, Buffett advises not to keep your will secret, as this could lead to conflicts. “If your children are adults, let them read your will before you sign it,” Buffett writes. “You don’t want your children to say ‘Why?’ questions when you are no longer able to answer them,” said Buffett.
He instead encourages people to explain the logic behind their decisions. Buffett himself explains: “Over the years, I have received questions or comments from all three of my children and have often adopted their suggestions. It is not a bad thing if I have to defend my thoughts. My father did that to me too.”
He explains that over the years he and his late business partner Charlie Munger have seen “many families driven apart after the posthumous dictates of the will left beneficiaries confused and sometimes angry.” On the other hand, they also experienced cases in which the will, “which was discussed in detail before the death, contributed to the family becoming closer.”
More advice
Buffett also advises people to think about such questions before it is too late. “Father time always wins,” he writes. Buffett explains that he has been very lucky to live so old so far, but at the same time warned: “but soon he will come to visit me too.”
The Berkshire Hathaway CEO also points out that if you are older yourself, you should consider that your own children may also be older and you should therefore perhaps plan for future generations. In Buffett’s case, “three potential successor trustees were named for this reason. Each of them is well known to my children and makes sense to all of us. They are also slightly younger than my children,” Buffett explains.
Buffett also writes in his letter that he changes his will every few years. He often changes only a little and keeps things simple.
As Buffett explains, wealthy friends were surprised at the trust he placed in his children and their potential representatives. They were particularly surprised by Buffett’s demand that all foundation measures must be approved unanimously. Buffett justifies this by saying that “those who can distribute large sums of money […] will forever be considered “targets of opportunity.” The unanimous decision allows “an immediate and definitive response to the applicants” and that will improve the lives of his children, says Buffett. However, he also admits that his unanimity clause is not a panacea and not always be practical.
Buffett is proud of his children
Buffett ends his letter with a kind of declaration of love to his children. He saw his children “grow into good and productive citizens.” Although they “in many cases have different views” than Buffett himself or his siblings, “but they have common values that are unshakable,” writes the stock market star.
“Susie Jr., Howie and Peter have all spent far more time directly helping others than I have. They enjoy being financially well off, but they are not fixated on wealth. Their mother got this from them “I would be very proud of you and I am too,” said Buffett.
Editorial team finanzen.net
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