Warren Buffett, one of the world’s wealthiest individuals, has some timeless advice for parents crafting their wills: let your children read and understand it before you sign. This transparent approach, he argues, can prevent misunderstandings and strengthen family bonds.
The Logic of Transparency
In a letter to shareholders, Buffett encouraged parents to ensure their children understand the reasoning behind their estate decisions. “Be sure each child understands both the logic for your decisions and the responsibilities they will encounter upon your death,” Buffett wrote. He emphasized listening to their feedback and adopting any sensible suggestions.
“You don’t want your children asking ‘Why?’ in respect to testamentary decisions when you are no longer able to respond,” Buffett added.
Tough Conversations That Build Relationships
Douglas Boneparth, a certified financial planner and founder of Bone Fide Wealth, echoed Buffett’s sentiment. Discussing an estate plan openly, while challenging, can lead to deeper understanding and stronger relationships within families.
“These are tough conversations to have, but they’re meaningful,” Boneparth said. Transparency ensures that children have realistic expectations about their inheritance. “Kids’ imagination can run wild with what they think they should be getting,” he warned, emphasizing the need for clear communication about who gets what—and why.
Addressing Inequalities and Special Circumstances
Buffett acknowledged that families are often torn apart by confusion and jealousy stemming from wills. For parents leaving unequal inheritances among their children, explaining the reasoning behind such decisions is crucial.
Certified financial planner Carolyn McClanahan, founder of Life Planning Partners, suggested that parents should involve children in these discussions early on. For instance, if one child has already received financial support, such as help with a down payment or tuition, the parent can explain why another sibling might receive more in the will.
McClanahan also recommends considering the unique circumstances of each child. If one is more financially stable, parents might ask for their understanding in allocating more resources to a sibling in need. This proactive approach can prevent resentment later.
“You might say, ‘Your brother is an artist and could use a little more help,’” McClanahan said. “That way, the child is not slighted when they actually find out.”
When to Hold Back
While transparency is often beneficial, there are cases where withholding information may be wise. McClanahan noted that if a child has exploited their parents financially or is irresponsible with money, revealing the terms of the will could lead to further issues.
For such cases, she suggested writing a letter to be shared after death, explaining the estate decisions and avoiding potential conflicts during the parent’s lifetime. “Every family is different,” McClanahan said. “That’s why there should be no set rule.”
Lessons from Buffett’s Approach
Buffett, who has amassed a $150 billion fortune, practices what he preaches. He has involved his children in discussions about his estate, ensuring they understand both the logic and responsibility behind his decisions.
“There is nothing wrong with my having to defend my thoughts,” Buffett wrote. “My dad did the same with me.” By fostering this culture of openness, Buffett aims to prevent discord and miscommunication among his heirs.
Warren Buffett’s advice to let children read and discuss a will before it’s finalized reflects his commitment to transparency and fairness. While these conversations can be uncomfortable, they help set clear expectations, foster stronger relationships, and prevent future conflicts. For families navigating estate planning, Buffett’s wisdom offers a valuable framework to ensure both clarity and harmony.
