What Will Happen to Berkshire Hathaway After Buffett?
Warren Buffett has plans for Berkshire Hathaway and his wealth for after his death. What can investors expect from Berkshire Hathaway long term?
March 4 2021, Published 10:08 a.m. ET
The renowned investor and head of Berkshire Hathaway, Warren Buffett, knows that he won’t live forever. The 90-year-old multi-billionaire has long anticipated giving most of his wealth away to philanthropic causes. However, for most of Buffett's life, he planned to wait until his death to pass on his money.
In 2006, Buffett changed his philanthropic strategy, in large part due to his friendship with Microsoft founder Bill Gates. He started disbursing a set amount of his Class B shares to charitable foundations annually. He decreases the amount by 5 percent each year.
Five-sixths of the contributions each year go to the Bill and Melinda Gates Foundation, which raises funds for a wide range of philanthropic causes, particularly those that alleviate poverty and promote the value of each human life.
What will happen to Warren Buffett's money?
Buffett said decades ago that leaving huge inheritances could be dangerous. However, each of his children is charged with running a foundation that will receive a portion of his Berkshire stock to use towards philanthropy.
Another foundation is named in honor of his late wife, who was a major driver of his vision to give back to society.
In 2010, along with Gates, Buffett founded The Giving Pledge, which is an initiative that encourages the world’s wealthiest people to give back 50 percent or more of their wealth.
In his 2020 annual letter to Berkshire shareholders, Buffett spoke with optimism about the future of the company. He explained that he knows he and Charlie Munger, Berkshire’s chairman, won’t live forever. However, he said that the company is “100% prepared for our departure.”
Buffett’s will specifies that his estate trustees must convert a portion of Class A shares into Class B shares each year, then distribute those among various foundations. The foundations are required to use the funds promptly.
With this plan, Buffett estimates that it will take 12–15 years for all of his outstanding Berkshire shares to be deployed back into the market.
Who will take over Berkshire Hathaway?
Buffett has hinted at who will be his successor. Two frontrunners are Gregory Abel and Ajit Jain, who are both vice-chairmen. Another possibility is Todd Combs, who is the CEO of Berkshire’s subsidiary Geico.
Berkshire Hathaway portfolio
Currently, Berkshire Hathaway owns stock in nearly 50 companies, including a 9.3 percent stake in Coca-Cola—Buffett’s personal beverage of choice.
Here are some stocks in Berkshire Hathaway's portfolio as of December 31, 2020, and reported in Berkshire Hathaway’s 13F filing in February 2021:
Meanwhile, Berkshire Hathaway holds a 26 percent stake in Kraft Heinz Co, an 11.9 percent stake in Bank of America, 18.8 percent of American Express, and 8.4 percent of Bank of New York Mellon Corp. It wholly owns Geico, Dairy Queen, and many other companies.
How much money does Warren Buffett have?
Buffett had a net worth of $88.6 billion as of January 2021.
Who owns the most shares of Berkshire Hathaway?
Buffett owns a large portion of shares. The other top shareholders of Berkshire Hathaway are Ronald L. Olson, Meryl B. Witmer, the Vanguard Group, BlackRock Inc., and State Street Corp.