Warren Buffett
David A. Grogan | CNBC
Warren Buffett, who has amassed a personal fortune of $150 billion, made a strong case against creating “dynastic” wealth by appointing three independent trustees to oversee his philanthropy after his children and another $1.1 billion to donate Berkshire Hathaway stock to four family foundations.
Rather than leave his three children a huge inheritance, the 94-year-old legendary investor has long vowed to give away 99% of the fortune he built at Berkshire, the Omaha, Nebraska-based conglomerate he started since 1965 to run.
Buffett believes that family wealth dynasties can have negative consequences, such as eroding personal growth and complicating relationships. Meanwhile, they also create social insecurities, because it is impossible to predict how future generations will choose to distribute this wealth.
“I have never wanted to create a dynasty or pursue a plan that extended beyond the children,” Buffett wrote in a lengthy letter on Monday. “I know the three well and trust them completely. Future generations are another matter. Who can foresee the priorities, intelligence and loyalty of successive generations to deal with the distribution of extraordinary wealth in what may be a very different philanthropic landscape?”
Successors appointed
The “Oracle of Omaha,” who owns about 37.6% of Berkshire Class A shares, said the assets he has amassed could take longer to deploy than his children are alive. He has appointed three trustees of his charity fund to possibly succeed his children in disbursing his wealth. Buffett’s children are now 71, 69 and 66.
“Three potential successors have been identified. Each is well known to my children and meaningful to all of us. They are also slightly younger than my children,” Buffett wrote. ‘But these successors are on the waiting list. I hope Susie, Howie and Peter will pay for all my assets themselves.’
The identity of the curators was not disclosed.
Buffett has made annual donations to four family foundations since 2006. He said that through years of observation, he has built strong confidence in his children’s management ability and philanthropic ambition.
“The period 2006-2024 gave me the opportunity to observe each of my children in action and they learned a lot about large-scale philanthropy and human behavior,” he said. “They like to be comfortable financially, but are not concerned with wealth. Their mother, from whom they learned these values, would be very proud of them. As would I.”
Buffett’s Berkshire, which broke through a $1 trillion market cap this year, owns a wide range of renowned companies, ranging from the crown jewel Geico insurance to BNSF Railway to consumer brands like Dairy Queen and See’s Candies.