NU Online News Service, Jan. 22, 12:41 p.m. – Top executives at many family-owned businesses are doing a poor job of planning for the future, according to results of a survey conducted by researchers at Kennesaw State University, Loyola University Chicago and Babson College.
The researchers who conducted the survey, which was sponsored by Massachusetts Mutual Life Insurance Company, Springfield, Mass., and the George and Robin Raymond Family Business Institute, Alfred, N.Y., received responses from more than 1,000 companies. The responding companies were larger than the average family-owned business and reported mean annual revenue of more than $36 million.
But 55% of chief executives aged 61 or older who are expected to retire within five years have not chosen a successor.
Nineteen percent of the respondents have not done any estate planning other than preparing wills.
Most of the respondents plan to use life insurance to cover most of the cost of estate taxes, but that might be unrealistic, because 55% say their companies fail to conduct regular, formal valuations of company share value. Without regular valuations of share value, the respondents cannot accurately forecast estate taxes, MassMutual says in a summary of the research findings.