We are in a similar situation, but our Berkshire stake is around 40% and cash around 5%. I am following the option 3 you outlined above.

I am not worried about BRK doing an Enron or even a GE, so option 2 is a non-starter, as I have no wish to invite Uncle Sam transfer to share in our fortune. It is possible that BRK will underperform the broad market indexes, barring a significant recession or stock market crash.

My own dilemma is what to with our other large positions in Apple, Microsoft and Costco, whose cost bases are less than 10% of current market value. I see much higher probability that they could blow up than BRK. I have the lived recent experiences with Intel and Pfizer.

Since you have 10 years of living expenses in cash, you have already provided a large safety net for your wife. As for the future management of your estate, could you not bring your kids up to speed on how to handle the investments? They would anyway need to learn to do that when they inherit eventually.