A Family Limited Partnership (FLP) can be a powerful and profitable part of trust and estate planning. In fact, the Family Limited Partnership is probably the most beneficial structure available for wealth preservation via asset protection, estate planning, and tax minimization.
It is a way of protecting assets and of separating high-risk assets and liability from your estate.
Family Limited Partnerships are highly scrutinized and regulated by the IRS and state regulations.
What is a Family Limited Partnership?
An FLP is a limited partnership controlled by members of a family; like other limited partnerships, an FLP consists of two types of partners: general and limited. General partners control all management and investment decisions and bear 100% of the liability. Limited partners cannot participate in the management of the FLP and have limited liability. The partnership itself isn’t taxable – instead, the owners of a partnership report the partnership’s income and deductions on their personal tax return, in proportion to their interests.
In a Family Limited Partnership generally, the senior family members (parents or grandparents) contribute assets in exchange for a small general partner interest and a large limited partner interest. They can then give all or a portion of the limited partner interest to their children and grandchildren. This interest can go to the heirs directly, or be set aside in a trust.
Katz&Co accountants in Bethesda, Maryland are successful at protecting assets, reducing taxation and providing the maximum benefits to both the beneficiaries of the estate and it creators. We service clients with their tax needs throughout the Washington DC metropolitan area.
The formation, regulation and reporting associated with Family Limited Partnerships is complex. A mistake can have catastrophic financial consequences.
Will you advise you on ever step of the process with your Family Limited Partnership
- Is FLP for you
- Structure of the Family Limited Partnership
- Registration and fillings
- Compliance and reporting
You can find out more about our services by following the links above of e-mail or phone our Bethesda Accountants for more information or to set up a meeting in our convenient Bethesda offices.