Warren Buffett has made it clear that his frugal nature has helped contribute to his extreme level of wealth. It is often a surprise to learn that despite his billions, he still lives in a house that he purchased years ago for somewhere around $30,000.
Buffett's respect for money has not only built wealth to benefit his own life, but it will benefit the lives of many, many others. Buffett joined his long-time friend and fellow billionaire Bill Gates in an estate planning move that will benefit millions.
The two have chosen to donate the bulk of their massive estates to different charitable organizations and are asking others to do the same in a nationwide effort they have named "The Giving Pledge."
The Giving Pledge involves asking some of the wealthiest individuals and families across the nation to give at least 50 percent of their wealth away to those who need it more. But is helping those in need the only benefit that the initiative provides?
Could donating large amounts of wealth help reduce the number of sibling disputes during estate administration as well? Some say yes, and some say no. Money is often the basis of a dispute between siblings who don't see gifts as fair, but some suggest that reducing the award may not necessarily eliminate a fight.
One author wrote about the psychology primal kinship or the conflict over an object that is only a substitute for feelings that one child is more loved. The author mentioned an estate situation in which two daughters were fighting over a silverware set. When the set was divided, they moved on to the wooden silverware box that couldn't be shared. But it was more about "feeling safe and special."
There are ways to help kids understand the choices that a parents makes. The best way may be to explain choices that are made whether in person, through a family mission statement attached to a trust or a letter to each child.
Source: CNBC, "Smartest Decision Ever Made by Bill Gates, Warren Buffett," Constance Gustke, June 3, 2013