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Warren Buffett’s annual letters to Berkshire Hathaway shareholders have become valuable for more than the financial information they contain.
Read individually, each letter explains the performance, decisions and circumstances of a particular year. Read together over several decades, however, they reveal something much more important: how Warren Buffett thinks.
They reveal his attitude towards risk, investment, leadership, reputation, patience, mistakes and long-term value. They allow shareholders to understand not only the decisions that were made, but also the principles and reasoning behind those decisions.
I have been reflecting on whether families should preserve their thinking in much the same way.
In estate planning, we often focus on the legal documents required to transfer and protect wealth. We prepare wills, establish trusts, restructure businesses and document the ownership of assets.
These instruments are essential. However, they do not always preserve the thinking behind the decisions they contain.
A will generally identifies the testator, appoints executors, names beneficiaries, and provides for the distribution of assets. It may state who is to receive a property, how shares in a family business should be dealt with or how the residue of the estate should be distributed.
But a will may not explain why those decisions were made.
A trust deed similarly establishes the legal framework governing a trust. It identifies the trustees and beneficiaries, defines the trustees’ powers and responsibilities, and provides the terms upon which trust assets may be managed and distributed.
However, even the most carefully drafted trust deed may not fully communicate the founder’s reasoning, values or expectations.
It may not explain why a particular asset should be preserved rather than sold. It may not disclose why one beneficiary requires greater support than another. It may not tell the trustees how the founder approached investment risk, education, entrepreneurship, philanthropy or participation in the family business.
This is the space that a letter of wishes can fill.
A letter of wishes is generally not legally binding in the same way as a will or trust deed. It does not replace either document and should not contradict them. Its value lies elsewhere. It provides context. It allows the writer to explain the thinking behind the estate plan and to provide guidance to executors, trustees, guardians, beneficiaries and family members.
A will may provide that a particular property should pass to a child. The letter of wishes can explain the history of that property, its importance to the family and the reason it was allocated in that way.
A trust deed may give trustees discretion to support the education, healthcare, housing or business ventures of beneficiaries. The letter can explain how the founder hopes that discretion will be exercised.
It may also communicate the family’s values, the founder’s investment philosophy, the responsibilities attached to ownership, the causes the family should continue supporting and the principles that should guide the management of the family business.
The letter therefore helps the family understand not only what has been left to them, but also the mind behind it.
I believe the idea can be taken even further.
What if a letter of wishes were not prepared only once and then placed in a file with the will?
What if it became an annual family practice?
Companies hold annual meetings to review their performance, assess their risks, and determine their priorities for the next period. They document significant decisions so that future directors and shareholders can understand how the company arrived at its present position.
Families could benefit from a similar discipline.
Writing an annual letter of wishes would require a founder, parent or family leader to pause and take stock of both the estate and the family.
What changed during the year? What did the family achieve? Which investments performed well, and which ones did not? What important decisions were made? Why were those decisions made? What mistakes occurred, and what lessons were learned? What risks are emerging? How are the children or other beneficiaries developing? Is the next generation being prepared to manage wealth responsibly? Are the family’s legal and financial structures still appropriate? What should the family prioritise during the coming year?
This reflection should not be restricted to financial wealth.
A family’s wealth includes its businesses, properties and investments, but it also includes its health, relationships, education, reputation, faith, knowledge, networks, values and sense of purpose.
The annual letter could therefore become a broader health check of the family, drawing from the different dimensions of the wheel of life.
It could assess where the family is doing well, where attention is required and what the writer hopes the family will work towards during the next year.
Over time, these letters would create an extraordinarily valuable family asset: a record of thought.
Imagine a parent or founder writing one letter every year for ten or twenty years.
When read together, those letters would show how the person assessed opportunities, responded to difficult seasons, approached risk and made important decisions.
They would reveal how the estate was built, how the family’s priorities developed and which principles remained constant even as circumstances changed.
What Warren Buffett’s letters have done for generations of shareholders, these letters could do for a family.
They could provide a window into the writer’s judgment.
The family would not merely inherit the final collection of assets. It would also inherit an understanding of the discipline, decisions, mistakes and values that produced those assets.
This is particularly important because a will ordinarily speaks when the person who made it is no longer present to explain it.
The beneficiaries see the final decision, but they may not know the history, conversations and considerations that led to it.
Without context, even a carefully considered decision can be misunderstood.
An unequal distribution may appear unfair, even where it reflected different needs, responsibilities or benefits previously received.
A family property may be sold without any understanding of its strategic, historical or sentimental importance.
Trustees may exercise their discretion without appreciating the founder’s priorities.
Children may inherit shares in a business without understanding the values upon which that business was built.
A letter of wishes can reduce this information gap.
It gives those left behind the privilege of understanding how the writer thought.
More importantly, the letter does not have to remain a message to be discovered after death.
While the writer is still alive, it can become the foundation for meaningful family conversations.
The family can discuss the issues raised in the letter. The children can ask questions. The founder can explain past decisions. The next generation can be gradually introduced to the responsibilities of ownership, stewardship, and leadership.
The letter can support family meetings, succession planning, financial education and the preparation of beneficiaries for their future roles.
In that sense, the letter of wishes becomes more than an estate-planning instrument.
It becomes a family governance, communication, and education tool.
Families spend years building wealth but often do not preserve the thinking that built it.
They transfer the property but lose the philosophy.
They pass on the shares but not the shareholder’s mind.
They leave behind investments without explaining the principles by which those investments were selected, managed and protected.
A letter of wishes can help bridge that gap.
It cannot replace a properly drafted will, trust deed or comprehensive estate plan. It should be prepared carefully, reviewed periodically and kept consistent with the legally binding documents.
But it can preserve something that even the best legal drafting may not fully capture: the founder’s voice, judgment, values and reasoning.
The question is therefore not only whether you have written a will.
It is whether your family will understand the thinking behind what you leave to them.
Because a meaningful legacy is not merely the wealth that passes from one generation to another.
It is also the wisdom and context that enable the next generation to steward that wealth well.