Half of Business Owners Do Not Want Their Children to Inherit, Run Business

Operating your own business is considered an “American Dream” by many, yet when it comes to succession planning, half (52%) of business owners do not want their children to inherit and run the business, according to a recent Wells Fargo study.

On behalf of Wells Fargo, Versta Research conducted a national online survey of 1,008 “wealth creators,” defined as U.S. adults aged 50 or over who have at least $1 million in investable assets, excluding those who inherited most of their assets.

“As we work with clients, they tell us that reasons vary from a lack of confidence that their children will keep the company on solid footing, to believing large inheritances can be a disincentive to earning one’s own financial success,” said Michael Liersch, head of Advice & Planning for Wells Fargo Wealth & Investment Management. “More parents are recognizing their children simply are not interested in joining the family business and are not pressuring them to do so. Knowing what your children are interested in and where their strengths lie is key to effective succession planning.”

Among parents, nearly all (94%) want their children to forge their own path, rather than follow in their footsteps.

“My father originally planned to sell our 110-year-old family business, Pioneer Linens; yet a year before he passed away, he named me as successor—and it’s been my honor to continue the legacy of both my father and grandfather,” said Penny Murphy, third-generation business owner. “My brother, on the other hand, was the recipient of my father’s real estate. We are grateful that our father thoughtfully created an equitable estate plan that aligned with our respective interests.”

Where the wealth comes from

Nine out of ten (90%) wealth creators attribute their financial success specifically to hard work and determination. In addition, two-thirds (63%) of wealth creators cite the advantages of a good education, and almost half (43%) acknowledge the importance of living in the land of opportunity, while a quarter (24%) acknowledge the role of luck.

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