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Fort Worth lawyer Marvin Blum undoubtedly won every sweet at the Cake Walk.
The founder and managing partner of the Blum Firm on Saturday was selected — by lottery — to ask Warren Buffett and Charlie Munger, Buffett's business partner, a question at Berkshire Hathaway’s annual shareholders meeting, aka, the “Woodstock for Capitalists.” The meeting was the 59th presided over by Buffett, worth somewhere around $114 billion, according to Forbes.
It’s held every year in Omaha’s convention center, 40,000-plus packed together to hear the “Oracle of Omaha” opine on various subjects.
To get to ask a question requires an act of God or the best luck a Vegas regular would die for.
Blum, board certified in estate planning and probate law, on Saturday got to ask his third question over the course of 10 years.
The Blum Firm
Marvin Blum
“Ten years ago, my son Adam convinced me to enter the lottery for the first time,” Blum wrote on his web site. “I had beginner’s luck. My first question to Buffett was about his estate plan, seeking an answer to his famous thesis: ‘I want to leave my children enough so that they can do anything, but not so much that they can do nothing.’ I asked: ‘How much is that?’
Two years later, in 2015, “I got lucky again.” Sticking with the subject of estate planning, Blum asked Buffett about the role of philanthropy in his estate plan.
Lightning struck a third time this year.
“This year, my ticket number was ‘18,’ and I knew it was going to be my day,” Blum wrote. “Eighteen is my lucky number. In Hebrew, the number 18 is represented by the letters Chet (8) and Yud (10), which spells the word ‘chai,’ the Hebrew word for ‘life.’ Upon receiving ticket 18, I thanked the lottery guy and assured him it was my year to win.”
The opportunity comes with some anxiety, of course. Stage fright is a real thing.
Blum said the experience of standing in front of more than 40,000 people, plus millions more watching live on CNBC, is, suffice to say, “intimidating.”
However, Blum said he was twice interrupted by applause as he spoke, “boosting my confidence.”
So, in 2023, Marvin Blum, who graduated first in his accounting class at University of Texas and second in his law class at UT, stayed on the topic of estate planning, asking Messrs. Buffett and Munger about preparing heirs for an inheritance.
The exchange is as follows, according to Blum’s transcript:
Marvin Blum: I’m Marvin Blum, an estate planning lawyer from Fort Worth, Texas, home to many of your companies. In fact, Warren, I met you at the memorial for our beloved Paul Andrews, who was manager of TTI.
I’d like to get your thoughts on a widespread problem in the world of estate planning, and that’s the failure of most parents to prepare the next generation for the inheritance coming their way. In particular, if the estate includes a family business, most parents fail to do business succession planning to plan for who will run the business on the day when, not if, the founder is no longer there to run it.
The kids aren’t prepared, unlike King Charles (the other King Charles, not “King Charlie” Munger), who has been preparing for his job as King of England now for more than 70 years. I sometimes describe the situation like this: Picture a football game. At one end of the field is a quarterback. He has great skills. He throws a beautiful pass to the other end of the field. And at the other end of the field are the receivers. They’ve never been to a practice. They don’t know the rules of the game. They don’t know how to work together as a team. They’re clueless. So, the quarterback is the patriarch and the matriarch, the football is the inheritance or the family business, and the receivers are the kids. What are the odds that they’re going to catch the football and go score a touchdown? Probably, only around 10% … .
Warren Buffett [interrupting]: I’ve got the picture. I’ve probably observed as many — just because of my age and to some extent because of things like the Giving Pledge — I’ve probably observed as many particularly wealthy families, the problems (and they are all very particular to the family).
And in my family, I do not sign a will until my three children have read it, understand it, and made suggestions. Now, my children are in their 60s and that would not have been a great success if I’d done the same things in their 20s.
It depends on the family, it depends on how the kids feel about each other — all kinds of things. It depends on the kind of business you have, so there’s a thousand variables. But I do think that if the children are grown, and when the will is read to them, [if] it’s the first they’ve heard about what the deceased thought about things, the parents have made a terrible mistake. And, people, well, I’ve run into all kinds of situations, and some people don’t tell their children anything and some of them try and get them to bend to their will by using their own personal will. They make a million mistakes, and that’s one you don’t get to correct. Certainly, in my … well, Charlie’s had a lot of experience too with it.
Charlie Munger: Well, at Berkshire we have a simple problem of estate planning. Just hold the g--damn stock. [laughter]
Warren Buffett: Well, but that doesn’t fit everybody, Charlie. I mean, you know … .
Charlie Munger: No, it only fits 95%. [laughter]
Warren Buffett: I don’t know necessarily whether if you have billions of dollars you want to leave it all to your children. I mean that’s something …
Charlie Munger [interrupting]: Well, that’s another question, but if you’re going to place it somewhere, I’d just as soon have Berkshire stock as …
Warren Buffett [interrupting]: Oh, you’re solving the investment problem for them…
Charlie Munger [interrupting]: Yes, yes.
Warren Buffett: But you’ve got the personal problem of the fact that when they were 4, one of the kids pulled the other kid’s cat’s tail or something like that. I mean, you’re dealing with human beings, and the biggest thing you want is you want your children to get along. I mean, you want that all through your life, and the estate isn’t the only place where you can mess that up.
But it’s a place where … it’s a very easy … I mean, I know a number of cases where the people did not know what was in the will where there were huge sums involved, and within about 15 minutes each one of them had a lawyer, and they don’t get along since. It’s important to handle it right. And it is important if you want your kids to have a certain value — certain values, it’s important that you live those values. It’s important that you talk about them to them. They’re learning from you from the day they’re born what you’re really like. And don’t think that a cleverly drawn will will substitute for your own behavior in teaching your kids the values you hope that they will have. And then your will should be in conjunction with that. It should start expressing, and as they grow older, they learn to pass on their values in connection with the size of the estate. If there’s a family farm, it’s one thing. If it’s a bunch of marketable securities, it’s something else.
But I know one instance by a particularly rich fellow, that once a year, he’d get his kids together and have a dinner and do all kinds of things to get them to sign their income tax returns in blank. He really didn’t want them to know how much money they had and everything. Well, that isn’t going to work.
But as Charlie and I have said it, if you want to figure out how you’re going to live your life, you write your obituary and reverse engineer it.
Paul Andrews, incidentally, who you mentioned at TTI, lived as great a life as anybody I’ve known. He thought about these problems, and he came to me. He was 61, I think. Had all the money way beyond what he needed. Didn’t care about it. He’d like to give it to people. He had all kinds of things he wanted to do, and he said, ‘For a year, I’ve been worried about my business, TTI.’ And he said, ‘I’ve got all the money I need. The family’s got all the money they need, but what do I do with the business? These people have helped me throughout my life.’ He says, ‘I can sell it to a competitor. If I sold it to a competitor, they’d fire my people and keep their people when they put it together. If I sell it to a private equity firm or something, they’ll be figuring their exit strategy as they sign the papers.’ And he said, ‘I’ve been thinking about it a year.’ And he said, ‘Listen, it’s not that you’re such a great guy.’ [laughter] He said, ‘You’re the only one left.’ And we bought it [TTI], and we lived happily ever after. [Paul Andrews] was a man that knew what life was about.