Warren Buffett: Leave your children some money, but 'not enough that they can do nothing'

"The more you talk about money, the easier it will get."

Warren Buffett
Gerard Miller | CNBC

Warren Buffett has now given away half of his Berkshire Hathaway shares to charitable causes. This week, he distributed $4.1 billion in shares to five foundations. That new round of gifts brings his total donations to $41 billion, the legendary investor announced in a letter to shareholders published Wednesday morning.

Despite having another $100 billion in shares remaining, the 90-year-old CEO of Berkshire Hathaway is not planning on sharing the bulk of his wealth with his kids. Instead, he's opting to donate all of his Berkshire shares, or 99% of his wealth.

Buffett is encouraging other super-rich people to do the same: "The easiest deed in the world is to give away money that will never be of any real use to you or your family," he wrote in his recent shareholder letter.

"After much observation of super-wealthy families, here's my recommendation," he added. "Leave the children enough so that they can do anything, but not enough that they can do nothing."

In the letter, he also reiterated his support for overhauling the tax code. "It is fitting that Congress periodically revisits the tax policy for charitable contributions, particularly in respect to donors who get 'imaginative,'" he said.

'The more you talk about money, the easier it will get'

Buffett has long held the belief that his money should largely go to charity, rather than to his children, and he hopes that his adult children "pursue philanthropic efforts that involve both money and time."

His kids won't be left empty handed, though: Each of his three children has a $2 billion foundation funded by Buffett, The Washington Post reported in 2014.

One key lesson you can take away from Buffett's letter, no matter how much money you have, is that candor is helpful, says Marguerita Cheng, a certified financial planner and the co-founder and CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland. "Some people think that if they don't talk about money, the problem is going to go away."

While estate planning can be an awkward topic of discussion, "the more you talk about money, the easier it will get," Cheng says.

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'One size definitely does not fit all'

In his letter to shareholders, Buffett mentions having discussions with his first wife about their financial future, which Cheng says is a smart habit for all couples to adopt. "It's really important to take the time to understand your spouse, your partner, their vision, and their experience and yours," she explains. "If they're different, it's not that one person's is wrong or bad, but even talking about those differences can be helpful."

Buffett has had to have conversations about differences with his wife. "My first wife and I were totally in sync in respect to our philanthropic goals. She, however, favored giving away large sums when we were young — when our net worth was a tiny fraction of its eventual size. I held out for later, remaining charmed by the results of compounding," he wrote.

When it comes to decisions like this, "One size definitely does not fit all," Buffett writes.

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Cheng concurs: "Every family is different." Some parents and grandparents choose to give their kids money while they're alive, rather than as an inheritance. Their reasoning, she says, is, "We're in a position to help our kids. Giving them $30,000 really means a lot and I'd rather see my help in action rather than waiting for me to be dead and gone."

The important thing is to have some kind of plan, the experts agree. Not having a will is the worst financial mistake you can make, Jill Schlesinger, a certified financial planner and business analyst for CBS, told Grow. It's "by far the worst thing you can possibly do, because the stakes are so high," she said. 

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