AI, estate planning, and succession concerns weighing on private business owners

As the US nears a pivotal presidential election, private business owners are wrestling with concerns about the political and economic climate, coupled with rapid technological advancements, according to a new report by Brown Brothers Harriman.

BBH's second annual Private Business Owners Survey, released Tuesday, found nearly half of respondents view economic instability and inflation (47%), the rise of artificial intelligence (45%), and the political environment (45%) as their primary challenges.

In addition to concerns over economic and political issues, the survey, which collected insights from 400 owners of US-based private businesses valued at over $10 million, offered a glimpse into business owners' wealth and succession planning, especially in light of looming tax policy changes.

“Economic cycles come and go, interest rates rise and fall, and presidential elections happen every four years. Artificial intelligence, on the other hand, is a paradigm shift, and the pace of progress in this area poses opportunities, challenges, and risks to businesses of all sizes,” Scott Clemons, partner and chief investment strategist at BBH said in a statement.

Despite citing AI as a challenge, 99 percent of respondents indicated they are already using the technology for business functions like marketing, data analytics, and automating processes. However, business owners remain split on how AI should be regulated, with 46 percent maintaining there should be more oversight.

In addition to technology, tax policy is a significant concern for business owners, particularly with the federal gift and estate tax exemption set to expire in January 2026. Nearly three-quarters (74 percent) of respondents said they plan to take additional steps in estate planning before the exemption expires, while 16 percent indicated they are not making changes, anticipating the exemption level will remain unchanged.

On a related note, business owners are focusing their attention on generational wealth planning. The survey revealed 91 percent of business owners want their companies to stay in the family, but 74 percent admitted that roles for the next generation are either poorly defined or have not been fully communicated. 

Forty-five percent of respondents said they would not consider selling any part of their business over the next 12 to 24 months, primarily due to a deep-seated connection, and virtually all of those surveyed (99 percent) said they've taken at least some steps to prepare their successors.

“The best way to engage the next generation early is to figure out where their passions and interests lie and then explore areas of the business to apply these passions,” said Ben Persofsky, managing director of the BBH Center for Family Business. “If the next generation feels a genuine connection to the business, they’re more likely to find purpose and meaning within it.”

The survey also points to potential gaps in estate planning for private business owners. While 91 percent said their estate plans align with their personal values, 97 percent admitted they've held back from communicating those plans to family members, the top roadblocks being concerns about whether their plan is the right one (66 percent) and emotional discomfort around discussing wealth (55 percent).

Beyond succession issues, private business owners face ongoing challenges in managing their wealth through family offices. One-third of respondents rely on single family offices to handle their investable assets, but nearly half of those (44 percent) said they weren't satisfied with key aspects of SFO services such as investment management and estate planning.

“Single family offices are navigating increasingly complex financial and personal landscapes, and this survey highlights that even highly customized solutions can fall short of expectations,” said Tom Davis, a partner and head of BBH’s Multi-Family Office.