Family Limited Partnerships: Are They as Good as They Seem?

A Family Limited Partnership creates a separate entity in which you can place an almost unlimited amount of assets. This may help protect the assets from personal creditors and allow you to maintain control of the assets during your life. You can then give your family members limited partnership interests in the entity. 

A recent article in Life Health Pro, titled "6 Pitfalls That Clients Eyeing an FLP Need to Consider," points out the potential drawbacks of an FLP:

  • Expense - Creating an FLP can be very expensive as anything placed into the FLP will need to be appraised.
  • Limitation on Asset Types - Some assets are not well-suited for an FLP, including residential property and some types of securities.
  • Puts Conflicts Off - Just putting a family business into an FLP does not necessarily end any conflicts of the next generation over that business. You will still need a business succession plan.
  • Control of Assets - While you can control FLP assets, there are limits. You cannot use them for personal expenses.
  • Expensive for Children - Having part ownership of the FLP may subject your children to capital gains taxes they cannot afford.
  • Minor Children - You cannot give minors an interest in the FLP directly. You have to give them a share through a parent or guardian.

Family Limited Partnerships can be an excellent tool to pass on your business. However, you should consider them as only part of your estate plan and you should talk to an estate planning attorney about whether an FLP is right for you and your family.

Visit:www.letstalkestateplanning.com

Reference: Life Health Pro (July 9, 2014) "6 Pitfalls That Clients Eyeing an FLP Need to Consider"

No Comments

Leave a comment
Comment Information

Upcoming Workshops

3 Easy Steps To Protect Your "Stuff" This workshop addresses frequently asked questions and common misconceptions on Wills & Trusts, Asset Protection, Nursing Home Issues, and Medicaid Qualification.

Join Now! More Workshops

Call Us Today To Schedule A Consultation

We are ready to help you start planning. To schedule an initial consultation, call us at 770-822-2723 or 866-735-9628. You may also contact us online.

ESTATE PLANNING LAW GROUP OF GEORGIA,

Johns Creek Office
11555 Medlock Bridge Road, Suite 100
Johns Creek, GA 30097

Toll Free: 866-735-9628
Phone: 770-822-2723
Fax: 770-573-3379
Map & Directions

Lawrenceville Office
1755 North Brown Road, Suite 200
Lawrenceville, GA 30043

Toll Free: 866-735-9628
Phone: 770-822-2723
Fax: 770-573-3379
Map & Directions

map

How can we help you?

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close