Warren Buffett provides a glimpse into his will

Fri Jul 05 2024
Mark Cooper (3162 articles)
Warren Buffett provides a glimpse into his will

Warren Buffett has carefully strategized his approach to distributing his immense wealth, ensuring that it will have a lasting impact.

During an interview with The Wall Street Journal, Buffett, the chairman and chief executive of Berkshire Hathaway, revealed his plans for his remaining wealth after his passing. He stated that a new charitable trust will be established, with his daughter and two sons overseeing it.

The renowned investor also emphasized that his contributions to the Bill & Melinda Gates Foundation, to which he has generously donated billions, will cease.

“The Gates Foundation will not receive any funds after my passing,” Buffett stated.

The billionaire from Omaha, Nebraska has already distributed over half of his shares of Berkshire, the company he assumed control of in 1965 and transformed into a formidable force. Following the recent release of the latest round of charitable contributions on Friday morning, Buffett now holds almost $130 billion worth of the company’s stock.

His three children must reach a unanimous decision on the philanthropic purposes for the money.

Buffett, at the age of 93, mentioned that he has not given specific instructions to Susie, Howie, and Peter Buffett. However, he offered his own personal viewpoint on the topic of giving.

“It should be used to assist individuals who have not been as fortunate as we have,” he stated. Out of the eight billion people in the world, my kids and I have been incredibly fortunate to belong to a very small and privileged group. There are numerous ways to assist individuals.

In 2006, Buffett, who had previously advocated for saving philanthropy until his death, made the announcement that he was prepared to give. He committed to making yearly donations for the duration of his life to the Gates Foundation and four other foundations associated with his family. Uncertain was the fate of the wealth that would endure beyond his passing.

According to the Journal, Buffett stated that he will continue making donations to the five foundations as long as he is alive.

Buffett mentioned that he has made multiple revisions to his will. He arrived at the current plan after observing the development of his children over the years.

Susie Buffett, aged 71, resides in Omaha and serves as the chair of the Sherwood Foundation, an organization dedicated to advancing early childhood education and social justice. She also leads the Susan Thompson Buffett Foundation, which is named after her mother, Buffett’s first wife, who passed away in 2004. The foundation supports both reproductive rights and college scholarships, as indicated by their tax filings.

Howie Buffett, aged 69 and residing in Decatur, Ill., is involved in farming and serves as the head of the Howard G. Buffett Foundation. The foundation focuses on initiatives related to food security, conflict mitigation, and combating human trafficking. Susie and Howie Buffett both serve on the Berkshire board.

Peter Buffett, 66, is a music composer residing near Kingston, N.Y., alongside his wife, Jennifer Buffett. Together, they are at the helm of the NoVo Foundation, which is dedicated to various projects, including collaborating with indigenous communities.

“I have complete confidence in the values and abilities of my three children,” Warren Buffett stated confidently to the Journal.

The CEO of Berkshire mentioned that his children will be better equipped than him to adapt to any future changes in tax and foundation laws.

He expressed uncertainty about his ability to think outside the box when faced with a situation where three trusted individuals on the surface might outperform him, even if he prides himself on his ability to think creatively.

On Friday, Berkshire announced that Buffett will be converting 8,674 of his Class A shares into Class B shares in order to make another round of donations.

The Bill & Melinda Gates Foundation Trust is receiving Class B shares valued at approximately $4 billion based on Thursday’s closing price, while the Susan Thompson Buffett Foundation is receiving around $400 million. Buffett’s daughter and sons’ foundations are each being granted over $280 million in shares. One Class A share represents the ownership of 1,500 Class B shares, giving A shares a significant advantage in voting power.

In 2006, Buffett penned letters to all five foundations, outlining his intended contributions. He set aside a portion of shares to be given as gifts to each foundation. After six years, Buffett decided to double the pledge to his children’s foundations.

Annually, 5% of the remaining shares will be allocated to the respective foundation. This resulted in a decrease in the number of shares donated annually, although an increase in share price could potentially lead to higher value of the gifts. The price of Berkshire’s Class B shares has increased significantly since June 2006, taking into account a stock split in 2010.

However, the language used in those letters created some uncertainty regarding the fate of the shares he possessed at the time of his passing.

The Gates Foundation, renowned for its global health initiatives, also focuses on addressing poverty and promoting gender equality. Between 2006 and 2023, the foundation received a total of $39.3 billion from Buffett, as stated on its website fact sheet.

Chief Executive Mark Suzman expressed immense gratitude on behalf of the Gates Foundation for Buffett’s generous donations.

“Warren Buffett has shown great generosity to the Gates Foundation over the course of 18 years, providing both financial contributions and valuable advice,” Suzman stated. He has made a significant contribution to advancing and influencing the foundation’s efforts to establish a global society where individuals can lead healthy and fruitful lives.

Buffett resigned from his position as a trustee of the Gates Foundation in 2021, shortly after the couple’s divorce plans were made public. Melinda French Gates recently stepped down from the foundation, with her final day occurring earlier this month.

Buffett chose not to disclose the duration of his estate plan. In a November press release, he provided a detailed description of its contours, specifically discussing the supplemental gifts of Berkshire shares to the four family foundations.

During interviews, the children of Buffett stated that they have not yet made any decisions regarding the distribution of the billions of dollars.

“We haven’t discussed our plans yet as it appears to be a bit premature,” remarked Susie Buffett. I anticipate that it will likely be a continuation of our current efforts.

Peter Buffett noted that various factors, such as stock prices, tax laws, and social and political developments, could potentially influence their ultimate decisions.

“With the multitude of variables at play, it is indeed challenging to accurately predict the optimal decisions in real-time,” he remarked.

Howie Buffett recognized the magnitude of the challenge that lay ahead for him and his siblings.

“Someone will need to assume accountability for the financial resources he intends to allocate to a philanthropic organization,” he remarked. “I believe it is a privilege to have the opportunity.”

Mark Cooper

Mark Cooper

Mark Cooper is Political / Stock Market Correspondent. He has been covering Global Stock Markets for more than 6 years.