Antelope Valley estate planning law firm Thompson Von Tungeln explains the benefits of a family limited partnership to protect assets and reduce estate and gift tax liability.
Antelope Valley estate planning law firm Thompson Von Tungeln explains how a family limited partnership can reduce estate and gift taxes and protect assets of family members from potential claims and lawsuits.
“A family limited partnership is an excellent way to protect assets for several family members in one convenient instrument,” said Kevin Von Tungeln, partner at Thompson Von Tungeln. “Typically family savings, investments and titles to businesses and property are placed into the family limited partnership (FLP). Since the family limited partnership is a separate legal entity and assets are typically held in a trust, it is extremely difficult for claimants and judgment creditors to gain access to assets that are part of the FLP.”
Another advantage is that family limited partnerships give parents and grandparents a convenient vehicle for transferring wealth to their children and grandchildren. The owners of the property can grant shares of the family limited partnership to their heirs through gifting some of their shares in the partnership.
“This is not something that someone wants to try to do on their own,” said Von Tungeln. “The Internal Revenue Service monitors family limited partnerships closely, and has been successful in challenging those established near the time of death for the sole purpose of reducing estate taxes. An estate planning specialist is crucial for properly establishing and operating a family limited partnership.”
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