NEW YORK (CNNMoney.com) -- Berkshire Hathaway CEO Warren Buffett said Monday his decision to leave most of his wealth to charity now was "logical," adding that he feels "terrific" about the reversal of his long-stated plan to distribute his billions upon his death.

Buffett, the second richest man in the world, announced his plans to gradually give 85 percent of his wealth to five foundations in an exclusive interview with Fortune magazine published over the weekend.

Bill Gates (left), his wife Melinda and Buffett discuss the donation at a news conference.

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The vast majority will go to the Bill and Melinda Gates Foundation, run by Microsoft chairman - and the world's richest man - Bill Gates and his wife, Melinda. The foundation, which has about $30 billion in assets, focuses on world health as well as improving U.S. libraries and schools. Buffett's contribution will double the foundation's current assets.

"I feel terrific," Buffett said at a meeting Monday at the New York Public Library and monitored by Webcast. "This has been coming for 50 years; the exact method became clear in the last year."

The plan calls for Buffett to donate 10 million Berkshire Hathaway class B shares of stock to the Gates' foundation, another 1 million to the Susan Thompson Buffett foundation, named for his late wife, and another 350,000 shares each to the three foundations run by Buffett's three children, Susan, Howard and Peter.

At the meeting, Buffett signed letters pledging the initial gifts and took questions from Bill and Melinda Gates and an invitation-only audience that included members of other philanthropic organizations.

"The first three letters were easy to sign; I just signed 'Dad'," joked Buffett, while signing a letter pledging funds to his daughter Susan A. Buffett's foundation. "I'm not sure a billion has ever been sent with a letter that says 'Dear Suze.' I wanted to make sure I never wrote one that started 'Dear Anna Nicole Smith'," he quipped.

Buffett said there had never really been a question of whether he would give his money away, saying, "I'm not an enthusiast for dynastic wealth, especially when the alternative is six billion people much poorer (than we are) having a chance to benefit from the money."

Starting in July and continuing every year, Buffett will give away a set number of Berkshire Hathaway B (down $28.00 to $3,043.01, Charts) shares, starting with 602,500 in 2006 and decreasing by 5 percent a year. The value of the shares to be given away is currently about $37 billion.

When asked how his children feel about his decision to give away most of his wealth, Buffett said his children "have more money than most people would dream of" and said they share his views on inherited wealth.

"When they were growing up we weren't known as a fabulously rich family," said Buffett. "They live very well but they consider themselves very lucky. (But) they don't consider themselves as lucky as if they had a father with a different view," he added with a laugh.

While the dollar amount of the gift depends on the value of Berkshire Hathaway stock, Buffett said that if the value of Berkshire Hathaway stock appreciates more than 5 percent per year, the dollar value of gifts to all foundations will actually increase year over year.

Berkshire Hathaway class B shares fell nearly 1 percent on the news, in part because the foundations will sell the Berkshire shares to fund their programs and also because of concern about the future of Berkshire Hathaway once Buffett retires.

But Buffett indicated he has no intention of stepping down any time soon, noting that a big reason he chose to give money to the Gates foundation is so he can concentrate more on the day-to-day business of running Berkshire Hathaway, an insurance and investment firm.

Buffett added that he would not have made the donations if he thought the move would hurt Berkshire Hathaway stock, adding the move will improve the stock's "liquidity," or how easily it trades.

With a roughly 15 percent turnover rate, he said, the stock is one of the most thinly traded large-cap issues on Wall Street.

"Over time this will make for a more active stock," he said.

Gates said the immense size of the donation will help the foundation tackle the huge challenges it faces, such as stopping infectious diseases in under-developed nations.

Gates tipped his hat to a philanthropic predecessor, CNN founder Ted Turner, saying he felt Turner did a good job of "scolding people" awake when it came to the need to give back to society.

"We'd like to complement that by showing how much fun it can be," Gates said.

When asked by Melinda Gates whether her husband had dropped hints to Buffett about making a gift to the Gates foundation, Buffett said that he and Gates have been in discussions about teaming up for philanthropy for about 10 years.

Buffett called the decision "logical," saying he wanted to allocate his wealth to people he feels can do a better job of dispersing it than he can. He said he was impressed with the Gates' enthusiasm for the foundation and how the organization is run.

"I want people that are turned on about what they're doing. It just shouts at me, the enthusiasm that you people have for what you're doing," Buffett told the Gates'. "You can't order $10 million worth of enthusiasm."

Earlier this month, Gates announced he will step away from his day to day role at Microsoft starting in July 2008 to focus more on the foundation. After that date, he will continue working part time at Microsoft in an advisory role but concentrate the bulk of his time on the foundation.

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