Benefits of Family Limited Partnerships

A Family Limited Partnership has many benefits and can be a highly valuable tool in your estate plan. As a parent, you can protect your assets even in cases where an accident may have been caused by your minor child. You can also shield those assets from other lawsuits that can occur due to property and business disputes.

Here are some other benefits of an FLP:

- Limited Liability: While the general partners may be held liable for the actions of the partnership, the limited partners will not be held liable as such. Further, if a creditor personally sues a limited partner, they will not be able to take any shares held in the partnership.

- Unified Credit: An FLP can allow you to gift more than the maximum unified credit. The reason for this is that an FLP gift can be appraised much lower due to discounting. This may allow you to gift more to your children without incurring income and estate taxes.

- Discounted Value: If you convey into an FLP any income producing assets, such as rental units, those assets can be discounted by 25% or more. By gifting small interests into the FLP you can make good use of the federal transfer tax exclusion amount.

If you own a business you must have the utmost asset protection for you and your family in case of death, divorce, and lawsuits. A Family Limited Partnership could help you accomplish the highest level of protection.

Consult with a qualified professional Estate Planning Attorney on FLP's and other estate planning tools.

*This blog entry was not written by an Attorney and should not be constituted as professional legal advice.