Do you have a business or own assets that you want to transfer to your children now while still maintaining control of the business or assets?
What is a FLP? With a Family Limited Partnership (FLP), you can maintain control even after gifts are made. A FLP is a business entity established to segregate and identify specific ownership interests in partnership assets for family members. In most FLP's, the parents are the general partners with at least a 1 percent interest, while the children share the remainder as limited partners. In such a scenario, the parents' exposure to risk of loss of property (assets or a business) held by the FLP is greatly reduced. At the same time, as general partners they maintain full management and control over all partnership assets.
What are the other benefits of a FLP? Besides maintaining control of assets gifted, the benefits of an FLP include, among others:
- The value of any limited partnership units that the general partner has not transferred and owns at death can be discounted.
- The value of gifts of limited partnership interest can be discounted so that a donor can transfer a greater value of assets in a shorter period of time by making gifts of limited partnership units.
- Gifts of limited partnership interest are sheltered from creditors.
- It has advantages over trusts in that the accounting requirements for partnerships are less restrictive and general partners are not subject to the higher standards imposed upon trustees.
- FLP can address Gas Leasing and the Marcellus Shale. In conclusion, the FLP contains countless opportunities to assist you with an orderly, tax-efficient and non-adversial disposition of assets or a business to younger generation family members.
Call 215-321-4033 with questions and to learn more.
Estate Planning Law Office of Yvette E. Taylor-Hachoose
1234 River Road Washington Crossing, PA 18977
Posted on Wed, Sep 3, 2008
Yardley News
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