Your Money & Your Life

Over the years, I’ve suggested that people as different as Bob Dylan and Leo Tolstoy would have made good financial planners. Today’s honoree has been mentioned in this space before, but primarily in his role as an investor. Warren Buffett, the Chairman of Berkshire-Hathaway, is widely regarded as one of the most successful investment managers of our age. However, I believe we have more to learn from the man known as The Oracle from Omaha than just his approach to selecting investments. He has always said that his process begins with “I read and think,” and it’s clear that his approach to estate planning begins the same way.

For many years, Buffett maintained that he didn’t believe in making lifetime gifts, instead intending to wait to make distributions through his estate. But in 2006, he changed his approach and began making significant yearly donations. Since embarking on lifetime giving, he has donated billions of dollars to various charities. These include foundations managed by each of his children as well as the Gates Foundation, to which he has contributed nearly $40 billion over the years. In the summer of 2024, Buffett announced that he was updating his will to leave his entire estate to a new charitable trust, with all gifting decisions to be made unanimously by his three children.

It has been reported that a personal relationship with Bill Gates triggered the initial change. That may or may not be true, but what I find most interesting is that he changed his will at all. Having a will puts Buffett in the distinct minority. According to research from Caring.com, less than one-third of all Americans have one in any form. The primary reasons are reported as ‘don’t have enough assets’ (40%) and ‘procrastination’ (43%). At DCM, we often find that new clients’ estate planning documents are outdated, if they exist at all. One advantage of having DCM as your financial advisor is that estate planning is included in your comprehensive financial plan.

Buffett recently reported that he’d seen how his children had matured over the years (they are 71, 69, and 66), but he’s notoriously private, so chances are we’ll never know exactly why he changed his mind. Even for those of us with nowhere near Buffett’s assets, there are many reasons to make or update a will—changes in family composition, marital status, or career changes should trigger a review.

Most single individuals without dependents don’t feel they have a pressing need for an estate plan. But whether you know it or not, your state already has a will in place for you, and you probably won’t like it. In Indiana, where DCM is headquartered, the state splits any estate between parents and siblings. What if there was one relative who really needed your inherited assets? What if your parents prefer not to receive any assets at all?

Entering a committed relationship is an ideal time to draft or update your will. If you don’t have one, your assets will be distributed according to state laws, which only recognize marriage as a legal relationship when someone dies intestate, meaning without a will. The arrival of a child makes both a will and the naming of a guardian critical for single parents and couples. This is also a good time to consider other estate planning components like general, durable, and medical powers of attorney.

Few businesses survive the founder’s death without an estate plan. Potential issues include a partner or spouse anticipating ongoing income, staff needing continued employment, and partners wanting the business to remain viable. All these scenarios can be managed efficiently with a proper estate plan.

Later in life, individuals or couples will likely have significant assets to distribute, making a will much more important. They are also likely to need more complex estate planning, perhaps even one or more trusts.

Even more critical than what happens to your assets is what happens to you if you become incapacitated. This can occur at any age, which is why I believe all adults need an advanced directive, commonly known as a “living will.” Readers of a certain age will remember the Terri Schiavo situation from the late 1990s. She suffered a heart attack at age twenty-six and never recovered. Her husband said she’d prefer to be allowed to die peacefully, but her parents disagreed and sued—the case drug on for seven years before she was allowed to pass away. Only you know what you'd prefer in a similar situation. Please share your preferences – in writing – with those who love you.

Even if you are a member of the prudent minority who has a will and other estate planning documents, these should be updated along with life changes. Who says so? How about reasonably well-known British financial planner and knighted economist, John Maynard Keynes? When asked about the need for making changes, he answered, “When the facts change, I change my mind - what do you do, sir?"

DCM does not provide legal advice, but our advisors have many years of experience helping people navigate personal situations. We collaborate with CPAs and attorneys every day and will be happy to connect you with one if you wish.

Warren Ward, CFP®
Senior Investment Advisor

To learn more about Warren, you can read a brief biography here. 

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, Certified Financial Planner™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

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