Richard Maidman, patriarch of Townhouse Management Co., limits his family’s access to the company’s wealth in order to encourage his children to earn their way, the Wall Street Journal reported.
Townhouse’s $250 million portfolio includes an ownership stake in about 90 rental apartment buildings in the city. But profits from the company can only be used by family members for medical and education expenses, a decision Maidman told the Journal will ensure that hard work is valued.
“The idea is not to create in our children enough money so that people don’t need to work,” Maidman said.
The decision, Maidman said, has caused friction with some family members, but it was important, because “the family has a background of what can happen with living too large and growing too fast and doing too much.”
Other real estate dynasties in the city have used similar measures to ensure that wealth is preserved for future generations, William Zabel, a partner at Schulte Roth & Zabel, told the Journal.
“It’s very typical to have restrictions because you don’t want the family to waste it,” Zabel said. Wealth distribution restrictions can also include conditions such as religion of who a descendant marries or requirements that the descendant has to work, he added. [WSJ] – Hiten Samtani