When it comes to creating a family limited partnership, you’re sure to have a variety of questions on your mind. Along with this, you may soon begin to question whether or not it’s the right decision.
This is a natural approach to such a big estate planning decision. Fortunately, when you take the right steps at the right time, you can soon decide if this is the best thing for you, your family, and your money.
A family limited partnership, also known as an FLP, is controlled by members of a family.
Generally speaking, there are two types of partners that make up a family limited partnership:
As a general partner, you bear 100 percent of the liability while also controlling all investment and management related decisions.
A limited partner, on the other hand, does not have the ability to participate in the actual management of the family limited partnership. Furthermore, these people have limited liability.
We discuss this arrangement on our website, with the following information giving you basic guidance on what to expect:
“With a family limited partnership, you can gain much needed protection from lawsuits while also helping yourself reach a variety of estate planning goals. With our help, you can decide if this is something you should consider. If so, your business and family will benefit in a number of ways.”
What are the Benefits?
In an overall sense, the primary benefit of a family limited partnership is the ability to ensure that your family’s wealth is being managed and invested in the appropriate manner.
However, there are many other benefits to familiarize yourself with.
First things first, it’s possible to transfer limited partnership interests to family members as a means of reducing the taxable estate of older family members.
In short, these family members can transfer the value of the asset to their children, for example, which removes it from their estate in regards to federal estate taxes. Even with this decision being made, the person still has control over the management and distributions of the asset.
Another big benefit of a family limited partnership is the ability to protect assets from future claims by creditors. Taking this one step further, it can also protect a person in the event of a divorce.
In the event of a divorce in which a limited partner is no longer part of the family, the family limited partnership documents can require that the person transfers his or her shares back to the family.
With so many benefits of a family limited partnership, it’s only natural that a growing number of people are looking into this. If you’re one of them, it’s a good idea to focus on the present as well as the future.
It’s one thing to make decisions for today, but a family limited partnership is all about long term success.
Although a family limited partnership could be just what your family needs, it’s not something you should rush into. Instead, you should understand the ins and outs of a family limited partnership, including the way it will impact those who are involved.
If you have any questions about creating a family limited partnership, you have come to the right place. We have helped many people with this arrangement, and are more than willing to point you in the right direction.
In addition to scheduling a personal consultation, you can also download our free report entitled “Fifteen Common Reasons To Do Estate Planning.”
With this report in hand, you’ll learn more about all aspects of estate planning, including why you need to make all the right moves without delay. Once you make your way through the report, you can then decide which steps to take in the future.
Remember, we’re here to help you with everything related to estate planning. For many, this means the creation of a family limited partnership.
- What You Need to Know About SECURE Act 2.0 - March 30, 2023
- Show Your Love by Creating an Estate Plan - March 15, 2023
- What Happens When You Don’t Trust Your Trustee – Part II - March 7, 2023
By Appointment Only
All Mail Should be Directed to the Middleton Address