n REAL ESTATE
“If I’m going to split it up and
Property A has debt, but B and C
don’t, how do you deal with that?”
- Kent Silvester, attorney, Boutin Jones
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Date: 08/10/2018 12:26:PM Rep: 130144 - ap1835
PRITCHARD ALLISON
Dir/Iss: FROCA YP1
09/2018
64
comstocksmag.com
| October 2018
UDAC: FP - CIP
Other clients who want to avoid breaking up the business
think making one child a trustee over another is the answer.
But putting one child in charge of another child’s money can
destroy families, Wagner says.
“Usually for people who’ve spent their entire lives devel-
oping wealth, the idea of splitting up the business doesn’t
feel really good,” he says. “I’ve had families that are fine
having collectively owned assets. But the best scenario for a
family with known issues is to carve it up.”
IT’S COMPLICATED
No two families in commercial real estate are alike. Succes-
sion plans will vary accordingly. At Fulcrum, which has a
project portfolio that exceeds 2.5 million square feet, Fried-
man is constantly evaluating individual assets and determin-
ing whether to hold or sell them, he says. As an illiquid asset,
real estate is more challenging to divide, he adds, and less
flexible in terms of succession than liquid assets like stocks.
“If you own real estate, you have to run it,” he says. “If
all the kids aren’t interested in staying in the business, you
can’t sell a third of a shopping center or apartment building.
You need to sell the whole thing and distribute the cash. It’s
pretty complicated.”