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That would destroy a lot of family business like farms.
Not if they made it a point to split ownership with those alive before they died. Its not really all that hard its mostly a greed and control thing. Farm with two parents and three kids could have each parent with a 35% ownership stake and 10% for each kid but if both parents died it would be a severe tax day. If they did 20% a piece then if the kids were older they could buy out what was left and the parents could sell of theirs as they got older to avoid the tax. That being said I could see some allowed inheritance level like a million.
At least in Finland you can't give tax free gifts over a small amount. So you can't give part of your company to your children beforehand. The only way things like family farms can be inherited is that at least some part of inheritances is tax free.
Not to mention that farms are usually run by one family. Hard to imagine siblings wanting to live and work on the same farm together.
These are difficult issues. I don't think we can figure out a perfect system, we are going to have to live with flaws.