U.S. Trust Survey Finds Majority of Business Owners Focused on Keeping
People Employed and Creating Jobs; However Less Than Half Are Planning for
NEW YORK -- November 09, 2012
People who own their own businesses feel they have the ability and a
responsibility to create jobs and opportunities for others, according to new
findings from the 2012 U.S. Trust Insights on Wealth and Worth Survey™
released today. When it comes to their own estate and business planning,
however, many business owners are missing important steps that could
unintentionally jeopardize their business, employees and family financial
“Some of the most successful business owners and entrepreneurs in history have
been driven by a desire to change the world and improve the lives of others,”
said Keith T. Banks, president of U.S. Trust. “The country was founded on that
spirit of entrepreneurism, and it is a tremendous engine of economic growth
and prosperity. Yet many business owners are so caught up in what they are
doing that they often don’t envision a world without them in it. By not
anticipating risks or a change in circumstances, they unintentionally may put
the financial security of their families and employees at risk, despite their
U.S. Trust’s research found that high net worth business owners have generally
weathered the current economic cycle with optimism and focus on the future.
The survey found:
*Nearly three-quarters (72 percent) said that, as business owners, they
feel they have a responsibility to create jobs, and 76 percent feel an
obligation to keep people employed even if it means lower profits.
*Two-thirds (66 percent) of business owners – twice as many as non-business
owners – say they feel empowered to make a difference by their ability to
create opportunities for others.
*Roughly half (55 percent) of business owners have started, acquired and/or
made substantial investments to expand their business since 2008. One-half
said they have not made any significant changes.
When asked about plans to grow their business, only about half (55 percent) of
business owners said they are holding back because of economic and regulatory
concerns. Even fewer cited access to credit (28 percent) or availability of
start-up funding (15 percent) .
The nationwide survey of more than 600 high net worth individuals found that
people who own their own businesses are generally wealthier and earn higher
incomes than those who don’t. Most (68 percent) created the majority of their
wealth on their own by working for it. They attribute their success to a
combination of passion, intelligence and an entrepreneurial spirit, and a
majority (52 percent) see themselves working indefinitely, including 46
percent of business owners over the age of 67 who said they have no plans to
retire any time soon.
Business owners need more sophisticated wealth and estate planning
For the 2012 Insights on Wealth and Worth study, U.S. Trust surveyed U.S.
business owners with at least $3 million in investable assets, and nearly
two-thirds who have assets greater than $5 million. U.S. Trust’s research
found evidence that many business owners do not have wealth and estate plans
that reflect their position and personal wealth:
*More than half (55 percent) of all business owners surveyed have not
established a formal succession plan for their business, including 43
percent of those over the age of 67.
*Six in 10 business owners surveyed do not have a comprehensive estate
plan. In fact, they are slightly less likely than non-business owners to
have the basics such as a will, healthcare proxy or a named durable power
*One in three business owners has established a life insurance trust.
*Three-quarters (77 percent) of business owners say it is important that
they leave a financial inheritance to their children or grandchildren.
Forty-six percent already have transferred assets to a trust set up for
*Nearly half (48 percent) are not using any type of trust to protect or
transfer their financial assets to heirs, their business or charitable
beneficiaries. The biggest reason? Forty-two percent said they just
haven’t gotten around to it.
*One-third of business owners who haven’t established a trust say they
don’t see the need for a one because they are under the impression that a
will is sufficient to carry out their wishes.
*Fifty-four percent of business owners say they consider the most important
goal of an estate plan is to minimize estate taxes. Yet fewer than half
have taken, or plan to take, steps to reduce the size of their taxable
estate in advance of potential tax law changes that could raise estate
In families that rely on a business and the business owner’s role in the
business, estate planning, business succession planning and financial planning
require special considerations.
“The business is often the primary source of wealth and income for the family,
and financial responsibilities and risks often extend well beyond immediate
family members to include parents, grandparents and siblings. The modern
American family comes in all shapes and sizes, and managing the dynamics of
extended, blended and single-parent families or any special health, financial
and emotional circumstances can have a big impact on planning needs,” added
One-half (51 percent) of business owners surveyed by U.S. Trust say they feel
a financial responsibility for less fortunate family members. As a result,
business owners place a high priority on remaining financially independent and
protecting their financial assets and the continuity of income for their
families or spouse, especially if they were to have health issues that might
require the need for long-term care. Nearly four in 10 business owners
surveyed, however, do not have a financial plan in place to cover the cost of
long-term care, and only 40 percent have purchased long-term care insurance.
Other Business Owners
Additional information about the 2012 U.S. Trust Insights on Wealth and Worth
survey can be found at www.ustrust.com/survey.
U.S. Trust’s 2012 Insights on Wealth and Worth Survey is based on a
nationwide survey of 642 high net worth and ultra high net worth adults with
at least $3 million in investable assets, not including the value of their
primary residence. Among respondents, 37 percent have between $3 million and
$5 million in investable assets, 31 percent have between $5 million and $10
million and 32 percent have $10 million or more. The survey was conducted
online by the independent research firm Phoenix Marketing International in
March of 2012. Asset information was self-reported by the respondent.
Verification for respondent qualification occurred at the panel company, using
algorithms in place to ensure consistency of information provided, and was
confirmed with questions from the survey itself. All data have been tested for
statistical significance at the 95 percent confidence level.
U.S. Trust, Bank of America Private Wealth Management is a leading private
wealth management organization providing vast resources and customized
solutions to help meet clients' wealth structuring, investment management,
banking and credit needs. Clients are served by teams of experienced advisors
offering a range of financial services, including investment management,
financial and succession planning, philanthropic and specialty asset
management, family office services, custom credit solutions, financial
administration and family trust stewardship.
U.S. Trust is part of the Global Wealth and Investment Management unit of Bank
of America, N.A., which is a global leader in wealth management, private
banking and retail brokerage. U.S. Trust employs more than 4,000 professionals
and maintains 140 offices in 32 states.
As part of Bank of America, U.S. Trust can provide access to a broad range of
banking solutions for individuals and businesses, and an extensive retail
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