Dr. Harold Wong
Just before Thanksgiving in 2024, legendary investor Warren Buffett, worth $147.5 billion, offered a deeply personal letter. He talks about crucial principles for the successful transfer of assets to the next generation and ways to preserve family harmony. The vast majority of folks will not have even 1/100th of one percent of his wealth but may still find his letter useful for their family. The article is titled “The Art of Creating a Legacy: Estate Planning Wisdom from Warren Buffett,” found Dec. 12, 2024, by Legacy Plan.
Buffett believes in open communication in estate planning. “When your children are mature, have them read your will before you sign it.” This allows children to understand the logic behind decisions and ask their parents for the rationale behind their decisions. Buffett also believes in reviewing and updating his will every few years.
Buffett’s approach is drastically different from the approach upper-middle-income folks take. Most don’t go over what they own in detail. They feel that if the kids know they have a $1-5 million estate, some of the kids and grandkids will lose their motivation to “be all they can be.” Only you know your kids and grandkids. I suggest that you test them with some amounts of money while you are alive.
Example: I know a successful father who had four kids, and when they were in their 30s and 40s, he gave each of the kids $10,000. The daughter, who was the most responsible one, saved it. One son asked Dad if he could use it toward a down payment on his new personal house, and Dad agreed. The other two sons blew the money. Wouldn’t you like to know how your kids handle money before they get a big inheritance?
Example: an excellent way to test your kids is to not pay for all their college expenses. I recommend that parents not pay more than half. If the child has to contribute half of his college expenses, it might come from a combination of scholarships, student loans, and working while in college. The student will take the college experience more seriously.
Other key nuggets of estate planning wisdom from Buffett are: focus on values over valuables, fair treatment and gender equality between the sons and daughters, and start early and have the kids build experience in handling money, investing, and philanthropy.
Attend my free live seminars: Wednesday, March 19, or Thursday, March 20, starting at 6 p.m. at Hyatt Place, 3535 W. Chandler Blvd., Chandler, AZ 85226. The seminars are followed by a free catered meal. The topic is “Secure Your Financial Future: Lessons from Warren Buffett!”
To RSVP for the seminars or schedule a free consultation, please contact Dr. Harold Wong at 480-706-0177 or [email protected]. His website is www.drharoldwong.com.
Dr. Wong earned his PhD in Economics at UC Berkeley in 1974 and passed the National CPA exam in 1979. He has appeared on over 400 TV/radio programs.