Family Limited Partnerships
This is truly one of the estate planner's most powerful tools, the family limited partnership merits consideration in almost every high-net-worth estate and business succession plan. As this technique incorporates the principles of gift tax planning, estate tax planning, valuation discounts, and creditor protection all rolled into one ongoing strategy, the coordination of experts as a team is a must.
By conveying a family business or portfolio of family investments to a family limited partnership, the senior members of a family can share the value of their assets with their heirs while simultaneously maintaining control over the assets and lowering both their income taxes and estate taxes. In addition, the use of a family limited partnership can be an effective tool for introducing the younger members of a family to the family business or investment portfolio, while limiting much pf the downside risk generally associated with handing over the reins of the operation of such business or portfolio to members of the family.
A family limited partnership can provide numerous benefits for both tax and business reasons. However, the issues involved in establishing such a entity are numerous and complex. Accordingly, anyone considering setting up a family limited partnership should always consult his or her team of advisers in order to properly implement this technique.