Warren Buffett tours the grounds at the Berkshire Hathaway Annual Shareholders Meeting in Omaha Nebraska.
Warren Buffett has some advice for parents. It can bring you closer to your kids, while avoiding hurt feelings and arguments in the future, according to the famed investor — and you don't even have to be a billionaire to follow it.
"I have one ... suggestion for all parents, whether they are of modest or staggering wealth," Buffett, the CEO of Berkshire Hathaway, wrote in a letter to his company's shareholders on Monday. "When your children are mature, have them read your will before you sign it."
Aim to ensure your children understand "both the logic for your decisions and the responsibilities they will encounter upon your death," Buffett wrote. They can ask questions, or even offer up suggested edits. "Carefully" listen to those suggestions and adopt any you find to be "sensible," Buffett advised.
"You don't want your children asking 'Why?' in respect to testamentary decisions when you are no longer able to respond," he noted.
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Many people don't know the details of their parents' estate plans, or even if they exist. Whether you're distributing billions of dollars or a handful of sentimental family heirlooms, sharing those plans with your children ahead of time can help avoid unwanted complications, surprises and disagreements among heirs, New Jersey-based estate planning attorney Martin Shenkman told CNBC in September.
"As soon as the parents are gone, those emotions come out of the closet like a torrent, and no, [the heirs] don't always get along," said Shenkman.
Buffett and longtime friend and business partner Charlie Munger, who died last year, observed the same phenomenon, Buffett wrote: "Charlie and I saw many families driven apart after the posthumous dictates of the will left beneficiaries confused and sometimes angry."
Money Report
Buffett's dad successfully used this technique, Buffett says
Buffett regularly alters his own will, making changes "every couple of years," he wrote. He typically discusses any changes with his children and regularly takes their suggestions, he added.
In his letter, Buffett noted one new wrinkle in his will: He's adding three independent trustees to his charitable trust to potentially succeed his three adult children, who've been tasked with overseeing his pledge to distribute 99% of his estimated $150 billion fortune after he dies.
The new trustees are "well known to my children and [make] sense to all of us," he wrote.
In running his changes past his children, Buffett is emulating a tactic he learned from his own father, a former U.S. congressman, he noted: "There is nothing wrong with my having to defend my thoughts. My dad did the same with me."
Discussing estate plans with your children can bring parents and children closer together, Buffett wrote. After all, being transparent and willing to have frank conversations can build trust and foster healthy relationships, according to parenting experts.
"Charlie and I also witnessed a few cases where a wealthy parent's will that was fully discussed before death helped the family become closer," wrote Buffett. "What could be more satisfying?"
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