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FAMILY LIMITED PARTNERSHIP
FLPs are bona fide business entities designed to hold a family's assets together while protecting those assets from future creditors. It can ensure proper management of a large estate spread among many family members. It works like this -- Partners in a limited partnership are either "general partners" or "limited partners". General partners control the partnership. Limited partners have virtually no voice in the management of the partnership. Limited partners often have no guaranteed
rights to distributions from the partnership, |
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but may incur annual income tax liability as a result of the
partnership's business activities. Further, limited partners are often
prohibited from selling their partnership interest to anyone other than
a
family member, thus keeping the business in the family. Restrictions
such as these, while necessary to meet the family's objectives, render a
limited partnership interest somewhat unmarketable which severely
depresses it's fair market value. Depressed market value means a smaller
estate for the IRS to tax. FLPs carry significant consequences to the family, and should be tailored to the family's needs. Generally, family limited partnerships that carry the most significant restrictions are reserved to estates that exceed several million dollars.
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1450 Hughes Rd., Suite 215
Grapevine, TX 76051
817.329.1155
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