Thread

Warren Buffett Steps Down as Berkshire Chairman, Names Son to Replace Him

323 points · 221 comments · saimiam

dugmartin · 1789732295 · focus · HN ↗
I guess Warren’s quote only applies to other people, not him. "It’s like choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics." (<a href="https://www.nytimes.com/2001/02/14/us/dozens-of-rich-americans-join-in-fight-to-retain-the-estate-tax.html" rel="nofollow">https://www.nytimes.com/2001/02/14/us/dozens-of-rich-america...)
1. nlitened · 1789734152 · focus · HN ↗
  As I understand, the son is there not to lead the company (Greg Abel is the CEO), but to oversee their family's share in the enterprise.
  1. yuuu · 1789734967 · focus · HN ↗
    I thought he was giving away 99% of his wealth?
    u1hcw9nx · 1789736927 · focus · HN ↗
    He has. His family manages the foundation that owns BRK stock.
    infecto · 1789737198 · focus · HN ↗
    Isn’t that the usual loophole though? He definitely continues to donate large amounts but I always question setting up a trust that the kids run.
    traviswingo · 1789738100 · focus · HN ↗
    It’s not really a “loophole,” it’s a standard way to give away absurd sums of money.
    Have you ever tried to donate billions of dollars? It’s actually extremely difficult.
    You have to find causes you’re passionate about/things that society needs, find the correct charities to give the money to, make sure your money actually goes towards the thing they say it will (this is difficult), and then figure out how much you can actually donate (you can’t just give N dollars to company Y. They’ve got zero experience managing that much money, and no way to scale into doing it efficiently.)
    What happens then is you have $100b to donate, and mostly only do it $10m at a time or less.
    Warren’s kids are old now. They’ve all been donating money for YEARS (it’s a mandatory part of their trust).
    So yeah, you receive tax benefits by transferring shares to a foundation you also control, but that money is now earmarked for charity. It doesn’t flow both ways, and the laws on this are very tight (bad actors will find a way, but what’s new?).
    infecto · 1789741218 · focus · HN ↗
    Sure that is the typical way to donate your wealth but there are many other ways than giving it with control to your children. I have no judgement but doing it this way is a nice way to move money within your family.
    Everyone does it different and I have no judgement but you could just as easily pick a quorum of folks to do the job with a very explicit timeline. Charitable donations are quite broad in the US. So sure lots of wealthy folk don’t this way but not everyone!
    ndriscoll · 1789749064 · focus · HN ↗
    Can you just as easily pick a quorum of folks? It seems to me that no matter what, you're going to have to choose people you know and be accused of nepotism because those are the people you can actually assess, and in the case of children, hopefully raise/influence to be on the same page as you.
    You could always donate it to the US government, but then it'll be used to go start some wars, so that won't work. You could put it in some weird trust where random people can democratically decide what to do with it, but all you have to do is look at the government to see how good of decisions that leads to. So truly what's the alternative?
    infecto · 1789750211 · focus · HN ↗
    Easy is relative but someone in his position with decades of experience working with talented individuals, yes. Nothing is perfect but I have seen other foundations structured where it’s a mixture of descendants and leaders that worked with the individuals. We are going to be picking at hairs though since this is all anecdotal and we don’t know how it will play out. Some of kids foundation work has been a bit self-serving but it’s there money to spend. It could also just as easily be that the 3 kids are different enough that requiring all three to agree prevents most of the opportunity.

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