Warren Buffett donates $1.1 billion worth Berkshire Hathaway stock, outlines succession plan for $147 billion fortune

Billionaire investor Warren Buffett has donated over $1.1 billion worth of Berkshire Hathway stocks to four of his family's charities and foundations on November 25, according to an AP report.

The ‘Oracle of Omaha’ revived his Thanksgiving tradition of donating during the holiday and also outlined succession plans for his $147.4 billion worth fortune, it added.

Succession Plan for Children

The report noted that while Buffett has earlier said his three children would inherit his $147.4 billion fortune over a period of 10 years after his death, on November 25 he also designated undisclosed successor to his children in case they die before receiving their full inheritance.

While the identity of the successor was not revealed, Buffett, in his letter to fellow shareholders, said his children know them and agree they would be good choices.

“Father time 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. To date, I’ve been very lucky, but, before long, he will get around to me. There is, however, a downside to my good 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 noted.

He added that he still has no interest in creating dynastic wealth, but acknowledged giving Howard, Peter and Susie millions over the years, saying he believes “hugely wealthy parents should leave their children enough so they can do anything but not enough that they can do nothing.”

The Power of Compounding Interest

The secret to building up such massive wealth over time has been the power of compounding interest and the steady growth of the Berkshire conglomerate Buffett leads through acquisitions and smart investments like buying billions of dollars of Apple shares as iPhone sales continued to drive growth in that company, the report noted.

It added that Buffett has continued to live in the same Omaha home he'd bought decades earlier and drive sensible luxury sedans to work. “As a family, we have had everything we needed or simply liked, but we have not sought enjoyment from the fact that others craved what we had,” he said.

Buffett's Donations

If Buffett and his first wife had never given away any of their Berkshire shares, the family's fortune would be worth nearly $364 billion (well above world's richest man Elon Musk's $314 billion).

Since Susan Buffett's death in 2004, the family distributed $3 billion estate. In 2006 Buffet announced annual gifts to the foundations run by his children, his wife, and the Bill & Melinda Gates Foundation.

Till date Buffett's has given the Gates Foundation $55 billion in stock. The report added that it has become his annual “tradition” to make gifts to all five foundations every summer, but for several years now he has been giving additional Berkshire shares to his family's foundations at Thanksgiving.

Advice on Wills

Buffett in his recent letter also reiterated advice for 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 and answer their children's questions, the report added. 

Buffett said he and his longtime investing partner 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.”

(With inputs from AP)