Survey: Estate Planning Lags At Some Family Businesses
Results of a new survey suggest that many large family businesses will have trouble meeting their estate-planning goals.
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 about 1,000 well-established, family-owned businesses with annual revenue of at least $1 million.
Although the companies had mean annual revenues of $36 million and most chief executives hope to retain family ownership, 55% of chief executives over age 60 who are expected to retire within five years have not chosen a successor.
Nineteen percent of the respondents say they have not done any estate planning other than preparing wills.
Forty-eight percent of the respondents want to use life insurance as their top source of funds to pay death taxes, but that might be unrealistic, because 55% say their companies fail to conduct the regular, formal valuations of company share value needed to forecast estate taxes.