By Linda O’FLanagan
With one son in and the other out of the family business, Norman Sturner says things could have gotten ugly when it came to his will.
However, the veteran investor and president and CEO of New York-based investment and management company MHP, said he got lucky, and both sons are happy with their planned role in the business when he’s no longer around.
At a special “Generational Real Estate” panel focused on wealth transfer strategies for real estate families being hosted by the Mortgage Bankers Association of New York next week, Sturner promises to share his tips on getting what can be a delicate situation right.
While there are a host of variables, from dueling siblings to questionable business acumen, Sturner said one thing’s for sure: “No one gets out of here alive, and you need to plan for business succession just as you need to plan where you’re going to be buried.
“It’s one thing getting tax advice and setting up generational trusts, but the human aspect is that the child who is not in the business has to be treated fairly in the estate,” said Sturner, who admitted his eldest son, 48-year-old Andrew who operates several US marinas, often jokes that he’ll be the one choosing dad’s nursing home.
Sturner’s younger son, 46-year-old David, has been with MHP for the past 17 years and is now the COO.
The senior Sturner said David was groomed for the job at the helm of the business he co-founded in 1971 that today operates 6.5 million square feet of commercial space in the city.
He admitted, “You want to make sure that, after 42 years building it, your business isn’t going to go to hell.
“At the end of the day, it has worked out extremely well for us,” he added. “Both my sons are happy with each other and, when we get together it’s not a matter of how the business is going, but rather about family stuff.”
Joining Sturner on the panel will be investor Stephen Meringoff, a father of four daughters, along with Mike Koznitzky, senior tax partner at Boies, Schiller & Flexner, Glenn Kurland from Morgan Stanley and Kenneth Weissenberg, co-head of National Real Estate Practice at EisnerAmper.
Weissenberg, who has worked with several of the city’s most prominent real estate families, has no doubt the panel will be enlightening.
He commented, “Everyone has stories to tell; There have been studies of closely held business going from one generation to next — 80 percent fail going from the first to the second generation and 90 percent fail going from the second to third generation.
“In order to have a successful transition, planning is the key and it’s never too early to start planning.”
The event is expected to attract real estate entrepreneurs and veterans alike looking at issues ranging from value creation to teaching next generation business skills, opening up family discussions to wealth transfer strategies and tax implications
Panelists will discuss the issues and concerns that real estate families are grappling with as the founder ages and needs to pass on the reigns to the next generation from both a legacy and tax minimization perspective.
“It can all get very technical and you can hire million dollar experts to guide you through it, but we hope to both educate and entertain,” said Sturner of the panel. “My advice is to get a lawyer, an accountant and a covenant in that order — because you never know.”
The event takes place at the offices on Morgan Stanley, 522 Fifth Avenue, from 7.30 to 9.30 a.m. on Wednesday, November 13. For more information, email firstname.lastname@example.org