Buffett will accelerate the transfer of his fortune to his children's foundations. What does this mean for Berkshire?

Billionaire and Wall Street legend Warren Buffett said he plans to more actively transfer his fortune, including Berkshire Hathaway shares, to his children's foundations. Buffett wrote about this in his traditional Thanksgiving letter. However, the acceleration of asset donations should not be seen as a sign of distrust towards Greg Abel - his successor as head of Berkshire, says the businessman.

"To increase the likelihood that they [Buffett's children] will be able to manage what will effectively be my entire fortune before they are succeeded by other fiduciaries, I need to accelerate the pace of lifetime giving to their three foundations. My children are in their prime in terms of experience and wisdom, but they have yet to enter old age. This 'honeymoon' will not last forever," Warren Buffett wrote. His letter is published on the Berkshire Hathaway website.

Buffett on Nov. 10 converted 1,800 Berkshire Hathaway Class A shares (each paper is now worth about $747,850) into 2.7 million Class B securities (about $498) to donate to four family foundations, the company said. The billionaire himself said that despite plans to accelerate the donations, he nevertheless plans to retain "a significant number of Class A shares" until Berkshire Hathaway shareholders "reach the degree of comfort" with his successor as CEO, Greg Abel, that he himself and his partner Charlie Munger have achieved. Abel will become Berkshire's CEO effective Jan. 1, 2026.

"My children are already 100% supportive" of Abel, as is Berkshire's board of directors. All three children now have the maturity, brains, energy and instincts to manage a huge fortune. [...] Managing from the grave is not characterized by a great success story, and I have never had the ambition to do so," Buffett said.

Accelerating the wealth transfer in no way means that Buffett has changed his mind about Berkshire's prospects or that he doubts Abel's ability to run the company, the letter said. "I hope his [Abel's] health remains good for several decades. With a little luck, Berkshire will only need five or six CEOs in the next 100 years. It should especially avoid those whose goal is to retire at 65, get filthy rich or start a dynasty," the billionaire said.

Buffett now rates Berkshire's business prospects as "moderately above average." "Berkshire is less likely to face a devastating catastrophe than any other company I know of," the entrepreneur argues. However, in 10-20 years, there will be many better companies on the market than Berkshire: its size affects it, the letter says.

"Our stock price will behave capriciously, sometimes falling 50% or so, as it has three times in 60 years under current management. Don't despair: America will come back, and so will Berkshire stock," Buffett warned.

The head of Berkshire Hathaway said he will no longer write annual messages to shareholders, as he has done for six decades at the helm of the company. He will also stop "speaking endlessly" at shareholder meetings, according to the letter. However, Buffett promised to continue sharing his thoughts on Berkshire in his annual Thanksgiving letters.

Buffett abruptly announced plans to retire at Berkshire Hathaway's annual shareholder meeting in May 2025. Berkshire's board then voted unanimously to approve Greg Abel as president and CEO effective Jan. 1, 2026. Buffett, who turned 95 in August, will remain chairman of the board.

The upcoming resignation of the legendary investor has raised concerns among some market participants that the "Buffett premium" built into Berkshire's share price due to the billionaire's merits and talent will also start to fade with his departure. In late October, analysts at KBW Investment Bank became the first on Wall Street among those whose opinions are followed by Bloomberg, who gave a recommendation to sell Berkshire shares. According to KBW, the securities are under pressure from macroeconomic uncertainty, the issue of Buffett's succession and weakening operating results.

Berkshire Hathaway shares are now worth 10% more compared to what they were at the beginning of 2025. By comparison, the main U.S. stock index, the S&P 500, rose 16% over the same period.

This article was AI-translated and verified by a human editor