Why Warren Buffett Believes Leaving Too Much Money to Kids Is a Mistake

Warren Buffett, one of the world’s most successful investors, has long argued that leaving a vast fortune to his children might do more harm than good. 

After decades of observing wealthy families, Buffett believes that excessive inheritance can erode ambition, stifle personal growth, and even create family discord. Instead, he has said that he wants to empower his children with responsibility while directing most of his wealth toward philanthropy.

Key Takeaways

• Warren Buffett plans to leave his children enough money to pursue their passions, but not so much that they lose motivation or purpose.
• He has emphasized the importance of open communication about inheritance, encouraging parents to discuss their wills with their children before signing.

What Buffett Has Said About Leaving Money to His Kids

Buffett’s views have roots in both personal experience and an understanding of human nature. “After much observation of super-wealthy families, here’s my recommendation: Leave the children enough so that they can do anything but not enough that they can do nothing,” he wrote to Berkshire Hathaway (BRK.A, BRK.B) shareholders in 2021.

He has also said he doesn’t want to bind future generations to his fortune. “I’ve never wished to create a dynasty or pursue any plan that extended beyond the children,” he wrote in 2024.

While he knows and trusts his children, he said that “future generations are another matter.” “Who can foresee the priorities, intelligence and fidelity of successive generations to deal with the distribution of extraordinary wealth amid what may be a far different philanthropic landscape?” he wrote.

Rather than direct inheritances, Buffett has set up $2 billion worth of charitable foundations for each of his three children. This gives them the resources to make a difference through philanthropy, while avoiding the pitfalls of unearned privilege. His children, now in their late 60s and early 70s, will collectively oversee the distribution of his remaining wealth to charitable causes, with all major decisions requiring unanimous agreement—a safeguard against external pressures and opportunistic requests.

While the Buffett family doesn’t seem to be engaging in much “Succession”-like drama, some strife has leaked to the press over time. In 2006, the Oracle of Omaha disowned one of his grandchildren, Nicole Buffett, for talking publicly about the family’s wealth.

What You Can Learn From Buffett’s Plans

Independence: Limiting the size of inheritances is a way parents can encourage their children to develop their own ambitions and work ethic, rather than relying solely on family wealth.

Open communication: Buffett recommends that parents let adult children review the will before it’s signed. This transparency prevents misunderstandings and family conflict after a parent’s death. “When your children are mature, have them read your will before you sign it. Be sure each child understands both the logic for your decisions and the responsibilities they will encounter upon your death,” Buffett said in 2024. “You don’t want your children asking ‘Why?’ in respect to testamentary decisions when you are no longer able to respond.”

Focus on values over wealth: Buffett’s plan is designed to pass on values like responsibility, philanthropy, and adaptability alongside his assets.

Regularly update your plan: Buffett said that he updates his will “every couple of years,” typically making only minor adjustments. This means he is adapting to changes in family circumstances and ensuring the plan remains aligned with his intentions.

The Bottom Line

Buffett’s approach to inheritance offers a blueprint for balancing opportunity with responsibility. By leaving his children “enough so that they can do anything but not enough that they can do nothing,” he hopes that they will be empowered to find their own paths in life.

Buffett’s principles offer practical wisdom for families with any amount of wealth: prioritize values over assets, communicate openly about inheritance plans, and consider your financial legacy as one that encourages rather than undermines personal growth and family unity.