Six Estate Planning Tips from Warren Buffett

Episode 323 – The investment wisdom of Warren Buffett is well known through his annual letter to shareholders. But he has some unique ideas about estate planning as well. Here are six of Buffett’s more important estate planning concepts.

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Transcript of Podcast Episode 323

Hello this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode, six estate planning tips from Warren Buffett.

Warren Buffett, with a net worth of about $150 billion, is one of America’s most successful investors. His investing ideas—summarized by his annual letter to Berkshire Hathaway shareholders—highlight some of the most thoroughly examined ideas in the world of finance. But his favorite concepts when it comes to estate planning create a huge buzz as well.[1]

The “Oracle of Omaha,” as he is known, has created some controversy with his approach. For one thing, he believes that wealthy parents should leave their children enough money to do anything, but not so much that they can do nothing.[2]

Here are six other things Buffett recommends when it comes to estate planning,

1. If you have adult children, ask them to read your will. Buffett also suggests not finalizing it until they do. It’s also important to make sure they fully understand the meaning of each section, and to listen to any questions or suggestions they may have.

In Buffett’s view, this will avoid any major surprises after someone dies. It also gives them an idea of what to expect when that day arrives.

2. Be transparent. Buffett believes that it’s important that each child know both the thought process that went into the plan and the responsibilities each of them will have when the parent dies. Also, understanding how the estate was planned can help avoid disagreements later.[3]

3. Longevity is uncertain. Buffett’s wife Susie died in 2004. Since she was two years younger than her husband, they always assumed that he would die first, and she would oversee the distribution of his estate.[4] It didn’t happen that way, and it disrupted their estate plans.

4. Longevity has its downsides. Buffett turned 94 in August of 2024. He considers himself fortunate to have lived this long. And his children are now between the ages of 66 and 71. They no longer have as much life expectancy today as they did before. In Buffett’s words “the massive wealth I’ve collected may take longer to deploy than my children live.”[5] Thus, you should designate successor trustees for any family or charitable trusts that your children may be involved in.

5. It’s not easy giving away a lot of money. Most charitable organizations do a lot of good. But when it comes to fundraising, some are more aggressive than others. As Buffet says, “Those who can distribute huge sums are forever regarded as ‘targets of opportunity.’ This unpleasant reality comes with the territory.”[6]

He has also added a “unanimous decision” provision to his plan.[7] This means that when it comes to philanthropy, all three of his children must agree on what to do with the money. Any one child has veto power over any philanthropic action that may be proposed.

6. Even the most well-thought-out wills and trusts must be updated. We’ve talked about this before. Buffett changes his will every few years, although sometimes the changes are minor.[8] But family membership, family dynamics, and tax laws all tend to change over time.

 

What can we learn from Warren Buffet’s planning? Even if you’re not especially wealthy, your estate plan deserves careful thought, clear communication, periodic updates and contingency plans. Your estate plan can be one of the most important aspects of your financial legacy. And while we may not have as much as he does, we can all learn from his ideas.

[1] Barley, Brooke. “Warren Buffett Offers One Piece of Estate Planning Advice to the Middle Class.” TheWealthAdvisor.com. https://www.thewealthadvisor.com/article/warren-buffett-offers-one-piece-estate-planning-advice-middle-class?mkt_tok=NjY2LVBIQS05NTgAAAGY1Zrsnz_Wt588-p_1kCbuJstYv5bf8FYK8nGTJVGeOnfs6u8pi9f_HLqsF573fzGywVLEJsGwjaAJiQR4yqSz03TSEXqdU5V144g2nw (accessed Feb. 28, 2025)

[2] Manganaro, John. “Warren Buffett’s 7 Nuggets of Estate Planning Wisdom.” Thinkadvisor.com. https://www.thinkadvisor.com/2024/11/25/warren-buffetts-7-nuggets-of-estate-planning-wisdom-/ (accessed Feb. 28, 2025)

[3]  Id.

[4]  Id.

[5] Buffett, Warren. “Berkshire Hathaway News Release, November 25, 2024.” Berkshirehathaway.com. https://www.berkshirehathaway.com/news/nov2524.pdf (accessed Feb. 28, 2025)

[6] Id.

[7] Barley, Brooke. “Warren Buffett Offers One Piece of Estate Planning Advice to the Middle Class.” TheWealthAdvisor.com. https://www.thewealthadvisor.com/article/warren-buffett-offers-one-piece-estate-planning-advice-middle-class?mkt_tok=NjY2LVBIQS05NTgAAAGY1Zrsnz_Wt588-p_1kCbuJstYv5bf8FYK8nGTJVGeOnfs6u8pi9f_HLqsF573fzGywVLEJsGwjaAJiQR4yqSz03TSEXqdU5V144g2nw (accessed Feb. 28, 2025)

[8] Manganaro, John. “Warren Buffett’s 7 Nuggets of Estate Planning Wisdom.” Thinkadvisor.com. https://www.thinkadvisor.com/2024/11/25/warren-buffetts-7-nuggets-of-estate-planning-wisdom-/ (accessed Feb. 28, 2025)

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