Family Limited Partnership Reports

Our FLP Reports will help you efficiently transfer property. This is necessary to obtain appropriate discounts:

Owners of Businesses, Real Estate, and Marketable and non-Marketable Securities can transfer property to their children, grandchildren or favorite charity and significantly reduce estate and gift taxes.

Parent controls as G.P., child or grandchild or charity is a L.P.

The value of the asset - the limited partnership interest - may be discounted (by an Appraiser) when computing the gift tax.

Theory - the L.P. interests are worth less since the L.P. has no control over the Partnership’s activities and the interests are not marketable.

Use Family Limited Partnerships as a tool for (1) asset preservation, (2) estate planning, (3) family transfers, (4) charitable giving, and (5) income tax planning.

Considerations:

Form the L.P. while the Owner or investor is in good health and has a reasonable life expectancy. Establish the L.P under state law and run it like a business, preferably with a corporate G.P. that has a Board of Directors.

Consider adult children or independent 3rd parties as G.P. for key decisions to avoid investor having too much control. Mandate distributions of income.

Document the purpose of the L.P. - Show non-tax reasons, such as protection of assets from creditors.

Transfer only business or investment assets - not personal residences or vacation homes - into the L.P.

Give the investor a minority interest, or less than a controlling interest in the corporation/G.P., to restrict the investor’s ability to dictate how the L.P. distributes income.

The investor/G.P. should not be dependent on L.P. distributions for living expenses.

Document the amount of the gift on the tax return with an appraisal.