Warren Buffett gives away $1.1B, plans how to provide his $147B fortune after his death

OMAHA, Neb. — Investor Warren Buffett renewed his Thanksgiving custom of giving by handing out more than $1.1 billion of Berkshire Hathaway stake to four of his household’s foundations Monday, and he offered recent details about who will be handing out the rest of his fortune after his death.

Buffett has said previously that his three kids will distribute his remaining $147.4 billion fortune in the 10 years after his death, but now he has also designated successors for them because it’s feasible that Buffett’s children could die before giving it all away. He didn’t identify the successors, but said his kids all recognize them and consent they would be excellent choices.

“Father period always wins. 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,” the 94-year-ancient Buffett said in a note to his fellow shareholders Monday. “To date, I’ve been very lucky, but, before long, he will get around to me. There is, however, a downside to my excellent fortune in avoiding his notice. The expected life span of my children has materially diminished since the 2006 pledge. They are now 71, 69 and 66.”

Buffett said he still has no gain in creating dynastic affluence in his household — a view shared by his first and current wives. He acknowledged giving Howard, Peter and Susie millions over the years, but he has long said he believes “hugely wealthy parents should leave their children enough so they can do anything but not enough that they can do nothing.”

The secret to building up such massive affluence over period has been the power of compounding gain and the steady growth of the Berkshire conglomerate Buffett leads through acquisitions and intelligent investments like buying billions of dollars of Apple shares as iPhone sales continued to drive growth in that business. Buffett never sold any of his Berkshire stake over the years and also resisted the trappings of affluence and never indulged in much — preferring instead to continue living in the same Omaha home he’d bought decades earlier and drive sensible luxury sedans about 20 blocks to work each day.

“As a household, we have had everything we needed or simply liked, but we have not sought enjoyment from the truth that others craved what we had,” he said.

If Buffett and his first wife had never given away any of their Berkshire shares, the household’s fortune would be worth nearly $364 billion — easily making him the globe’s richest man — but Buffett said he had no regrets about his giving over the years. The household’s giving began in earnest with the distribution of Susan Buffett’s $3 billion estate after her death in 2004, but really took off when Warren Buffett announced plans in 2006 to make annual gifts to the foundations run by his kids along with the one he and his wife started, as well as the statement & Melinda Gates Foundation.

Warren Buffett’s giving to date has favored the Gates Foundation with $55 billion in stake because his partner statement Gates already had his foundation set up and could handle huge gifts when Buffett started giving away his fortune. But Buffett has said his kids now have enough encounter in philanthropy to handle the job and he plans to cut off his Gates Foundation donations after his death. Buffett always makes his main annual gifts to all five foundations every summer, but for several years now he has been giving additional Berkshire shares to his household’s foundations at Thanksgiving.

Buffett reiterated Monday his advice to every parent to allow their families to read their will while they are still alive — like he has done — to make sure they have a chance to explain their decisions about how to distribute their belongings and respond their children’s questions. Buffett said he and his longtime investing associate Charlie Munger, who died a year ago, “saw many families driven apart after the posthumous dictates of the will left beneficiaries confused and sometimes angry.”

Today, Buffett continues to navigator Berkshire Hathaway as chairman and CEO and has no plans to retire although he has handed over most of the day-to-day managing duties for the conglomerates dozens of companies to others. That allows him to focus on his favorite activity of deciding where to invest Berkshire’s billions. One of Buffett’s deputies who oversees all the noninsurance companies now, Greg Abel, is set to receive over as CEO after Buffett’s death.

Even after converting 1,600 Class A shares into 2.4 million Class B Berkshire shares and giving them away, Buffett still owns 206,363 Class A shares and controls more than 30% of the vote.