Warren Buffett’s $150 billion question: The posthumous wealth plan of the Oracle of Omaha

Warren Buffett, the 94-year-old billionaire investor and chairman of Berkshire Hathaway, marked this Thanksgiving with another massive act of generosity, donating over $1.1 billion in Berkshire Hathaway stock to four family-run foundations.

This move is part of a larger vision to distribute his wealth, now estimated at over $150 billion, in ways that align with his philanthropic philosophy.

Since 2006, Buffett has pledged to donate more than 99 per cent of his fortune, a commitment that has already seen him give away over $58 billion, including $43 billion to the Bill & Melinda Gates Foundation.

This year’s Thanksgiving donation included 1,600 Class A Berkshire shares, converted into 2.4 million Class B shares. Of these, 1.5 million shares went to the Susan Thompson Buffett Foundation, named after his late first wife, while the remaining 300,000 shares were divided among foundations led by his three children: Susie, Howard, and Peter Buffett.

“Father Time always wins”

In a letter to shareholders released alongside the announcement, Buffett addressed his advancing age and the inevitability of mortality with his characteristic candor. “Father time always wins,” he wrote.

“But he can be fickle – indeed unfair and even cruel – sometimes ending life at birth or soon thereafter while, at other times, waiting a century or so before paying a visit. To date, I’ve been very lucky, but, before long, he will get around to me.”

Reflecting on the realities of aging, Buffett acknowledged that his children — aged 71, 69, and 66 — may not outlive the 10-year timeline he has set for distributing the remainder of his fortune.

To address this possibility, he has named three successor trustees who, though unnamed, are younger and well-known to his family. “I’ve never wished to create a dynasty or pursue any plan that extended beyond the children. But these successors are on the wait list,” Buffett added.

The philosophy behind Buffett’s giving

Buffett’s wealth distribution plans are deeply rooted in his belief that children of the ultra-wealthy should inherit enough to pursue anything they wish but not so much that they can afford to do nothing.

He famously summarised this philosophy, saying, “Hugely wealthy parents should leave their children enough so they can do anything but not enough that they can do nothing.”

His giving strategy began in earnest following the death of his first wife, Susan, in 2004. The Susan Thompson Buffett Foundation has since played a significant role in reproductive health initiatives.

His other family foundations focus on early childhood education (Sherwood Foundation), combating global hunger and human trafficking (Howard G Buffett Foundation), and empowering marginalised women and indigenous communities (NoVo Foundation).

Buffett’s practical approach to wealth management extends beyond philanthropy to estate planning. He strongly advises families to discuss their wills openly during their lifetimes. “When your children are mature, have them read your will before you sign it,” he advised.

“Be sure each child understands both the logic for your decisions and the responsibilities they will encounter upon your death.” He noted that he had followed this advice himself, valuing his children’s feedback. “There is nothing wrong with my having to defend my thoughts. My dad did the same with me.”

Path forward for Berkshire Hathaway

Buffett has led Berkshire Hathaway since 1965,
turning it into a $1 trillion conglomerate encompassing businesses like Geico and BNSF Railway and substantial investments in companies such as Apple and American Express.

Despite his advancing age, Buffett remains at the helm as chairman and CEO, with no plans to retire. Greg Abel, who currently oversees Berkshire’s non-insurance operations, is
designated as his successor.

After Buffett’s death, his three children will have a decade to unanimously decide how to allocate the remaining wealth.

“What could be more satisfying than well-discussed testamentary decisions bringing a family closer in the end?” Buffett mused in his letter, recalling both the tragedies and triumphs he and his
late business partner Charlie Munger witnessed in estate planning.

What could have been but was made sure it was not

If Buffett and his first wife had never given away any Berkshire shares, their family fortune would be worth $364 billion today, making him the world’s richest person.

However, Buffett has no regrets. “As a family, we have had everything we needed or simply liked, but we have not sought enjoyment from the fact that others craved what we had,” he reflected.

Here’s the full letter Warren Buffett sent out to Berkshire Hathaway shareholders pic.twitter.com/RRZsZ5phKc

— Evan (@StockMKTNewz) November 25, 2024

The billionaire’s journey is a testament to the power of compound interest, long-term investments, and a life lived with purpose. As he put it, “You don’t want your children asking ‘Why?’ in respect to testamentary decisions when you are no longer able to respond.”

With inputs from agencies