Warren Buffett Shares Details of His Will: 2 Lessons You Can Learn From It

Actively managing your finances is crucial. This includes setting up a will to designate where your assets will go after your passing. But, many Americans aren’t taking action .

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Caring.com reported that only 32% of Americans have a will in 2024. This represents a 6% decline from 2023 and the first decrease in estate planning rates since 2020. What’s more?

Since 2023, 14% more U.S. adults give “a lack of assets” as their reason for neglecting estate planning.

The reality is that not creating or planning a will in advance of your passing can cause financial issues, and Warren Buffett understands this well.

Otherwise known as the “Oracle of Omaha,” billionaire Berkshire Hathaway CEO Warren Buffett knows something about money. After all, he’s one of the wealthiest people on Earth so he’s probably doing something right — according to Forbes , Buffett’s real-time net worth tops $143.5 billion as of August 28, 2024.

You might be wondering what Buffett plans to do to make sure his enormous wealth is left in the right hands after his passing. Well, he has two notable lessons about his own will and estate planning to share, according to CNBC :

Money mistakes the super wealthy never make - that you might be doing now.

Start planning early and communicate often

Buffett emphasizes that you should start planning early and communicate with your loved ones often.

“It’s a well thought out and communicated plan among the family,” said Jose Reynoso, head of advanced estate and tax planning at Citizens Private Wealth, to CNBC regarding the publicly available information from Buffett’s plan. “That communication can help avoid issues that can come up down the line.”

Delaying will and estate plans until the inevitable strikes can lead to a huge financial and logistical headache for your loved ones after you pass. Even if you aren’t very old yet, it’s best to take action. Early planning can include setting up a simple will, making beneficiary designations, and determining power of attorney directives. Having all the logistics in place before crisis strikes will allow for a smoother transition of your finances, assets, and more.

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Create a charitable account through a donor-advised fund

While most of us aren’t anywhere near as wealthy as Buffett, there’s another option to donate your money to charity other than creating a charitable trust or a private foundation: a donor-advised fund.

A donor-advised fund (DAF) is an account that you control which funds are earmarked for charitable giving. You usually open a DAF with the charitable arm of a brokerage firm, such as Charles Schwab or Vanguard. There’s typically no required minimum deposit.

Some types of assets you can deposit into a DAF include stocks, real estate, and cash. As the donor, you choose how to invest the designated assets and, of course, where you want to donate them. One great perk of a DAF is that as a living donor, you can get instant tax deductions for your donations now but decide where your money is going later on.

“A donor-advised fund is an excellent, low-cost way to bless the organizations that you care about,” said Nicholas Yeomans, a certified financial planner, estate planning specialist and president of Yeomans Consulting Group, to CNBC.

DAFs are a great way to reduce tax liability and ensure your money will go to a cause you believe in.

This article originally appeared on GOBankingRates.com : Warren Buffett Shares Details of His Will: 2 Lessons You Can Learn From It