Warren Buffett, one of the most successful investors in history, has long been an advocate for responsible wealth management. Buffet is the chairman and CEO of Berkshire Hathaway and one of the richest individuals in the world. Buffett is also a philanthropist, pledging to give more than 99% of his worth to charitable foundations and efforts. But when it comes to estate planning, Buffett’s advice isn’t just for billionaires; it’s something every parent should hear and consider.

Buffett recently issued a warning to parents: Before signing a will, they should have a frank discussion with their children about what is in the will, including the money their children will inherit. According to Buffett, proper estate planning is about preparing the next generation for financial responsibility as well as distributing assets. Yet, many families fail to have crucial conversations about money. According to a Fidelity Investments survey, a striking 56% of people said their parents never discussed money with them, and 81% believed they would have benefited from an early financial education.

In this article, we break down Buffet’s advice for families, offer tips on how families can follow that advice, and explain how a Rosenblum Law estate planning attorney can help families craft an appropriate estate plan.

Warren Buffett’s Key Advice on Estate Planning

Buffet emphasizes  the importance of transparency when writing an estate plan. He advises parents to allow their children, once they are at a mature age, to read their wills before finalizing them. This proactive approach ensures that children understand the logic of their parent’s decisions, as well as the responsibilities they will face once their parents are gone.

Buffett also highlights the importance of parents listening to their children’s feedback during these discussions. By considering their children’s perspectives, parents can make informed decisions that reflect the family’s collective values and expectations. This collaborative approach will ensure that when a parent is gone, the children are not left with unanswered questions or demands. 

The Great Wealth Transfer: Why It Matters Now

The Great Wealth Transfer is a term that refers to the transfer of wealth from the Silent Generation and baby boomers to their heirs. It is estimated that by 2045, $84.4 trillion will be transferred from this generation to their inheritors. 

Regardless of how much wealth they have accumulated, Buffet says that parents must begin having conversations with their children about their wills sooner rather than later. These conversations are vital to ensuring proper wealth management. 

Common Pitfalls of Keeping Estate Plans a Secret

Buffet’s advice in favor of transparency is important because keeping one’s will a secret can have negative consequences. For example, not discussing a will with one’s children can lead to family conflicts and disputes. By discussing the will openly, parents can prevent unexpected surprises that might lead to emotional distress or conflicts among siblings. 

Parents who keep estate plans a secret also risk their children struggling with asset management. The sudden responsibility of handling a deceased parent’s wealth can be overwhelming, especially after the emotional toll of losing themIf a child doesn’t understand their parent’s will and the responsibilities they have to assume, they may struggle to  properly manage the money and make informed financial decisions. Preparing beneficiaries in advance can help them make informed and responsible financial choices.

How Parents Can Effectively Follow Buffett’s Advice

Based on Buffet’s advice and our expertise in estate planning law, here are some steps every parent should take in order to create a successful estate plan: 

• Start the conversation early:  Parents should begin discussing estate planning with their children when they are mature enough to understand financial and legal matters. 
• Clarify intentions:  Parents should explain their reasoning behind the decisions in their will to prevent confusion and resentment once they have died. Explaining the purpose behind asset distribution can also help avoid legal disputes over the will. 
• Consult an experienced estate planning attorney:  Parents should hire an experienced attorney to ensure their will is legally sound and properly structured. An attorney can also provide guidance on how to effectively explain the estate plan to their children and other family members.
• Review and update the will regularly:  Parents should review their will periodically even if they feel it is done. This is because a will should accurately reflect assets, family circumstances, and legal requirements, any or all of which may change over time. Additionally, keeping children informed of significant updates will help maintain transparency and an understanding. 

How an Estate Planning Attorney from Rosenblum Law Can Help

At Rosenblum Law, our experienced estate planning attorneys provide the guidance and legal knowledge necessary to help parents and families create sound wills and trusts. We understand that estate planning can be complex, and we are here to simplify the process for you.

Our team will help you navigate the legal intricacies of wills, trusts, and other estate planning documents, empowering you to have informed discussions with your family and children about your wishes. We also ensure that your documents are clear, up to date, and legally enforceable. Don’t leave your family’s future to chance. Contact us today for a free consultation, and get one step closer to creating a will that accomplishes your objectives and protects the interests of all concerned.