Buffett’s estate plan: 90% of wife’s inheritance to S&P 500 index fund
The Oracle of Omaha’s 2013 directive remains a benchmark for passive investing, with the S&P 500 delivering a 16.39% gain in 2025.
Warren Buffett’s estate planning directives continue to serve as a definitive guide for passive investors, with the Berkshire Hathaway chairman specifying that 90% of the cash bequeathed to his wife should be invested in a very low-cost S&P 500 index fund. The remaining 10% is allocated to short-term government bonds, a strategy that underscores his long-held belief that index investing is superior to active stock picking for the average investor.
The directive was first detailed in Buffett’s 2013 letter to Berkshire Hathaway shareholders, where he outlined the simplicity of the allocation. "My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund," he wrote. This approach is designed to provide broad market exposure without the need for constant monitoring or active trading.
The performance of the S&P 500 has reinforced the validity of this strategy in recent years. The index surged 16.39% in 2025, a figure that rises to 17.88% when dividends are included. This strong performance has occurred despite various global headwinds, including geopolitical tensions such as the war in Iran, demonstrating the resilience of the broad market index.
Buffett’s confidence in this method stems from his view that individual stock selection is rarely successful for the general public. At the 2021 annual shareholders meeting, he stated frankly that he did not believe the average person could effectively pick stocks. By contrast, index funds offer a diversified portfolio of companies across various industries, spreading risk while still capturing the rewards of market growth.
The accessibility of this strategy has been further enhanced by digital investment platforms that allow users to implement similar allocations with small amounts of capital. Tools such as Acorns enable investors to round up spare change into diversified portfolios of exchange-traded funds, while other platforms like SoFi and Moby offer commission-free trading and expert research to help investors navigate the market.
While Berkshire Hathaway itself delivered an overall gain of 6,099,294% from 1964 to 2025, Buffett’s will suggests that the most reliable path for his family’s wealth is through the broader market. The 90/10 split remains a practical framework for investors seeking to balance growth with stability through short-term government bonds.
