Posted on Wed, Sep 3, 2008
Yardley News

Commerce Connection:

Protecting your assets - Family Limited Partnership

Do you have a business or own assets that you want to transfer to your children now while still maintaining control of the business or assets?

What is a FLP? With a Family Limited Partnership (FLP), you can maintain control even after gifts are made. A FLP is a business entity established to segregate and identify specific ownership interests in partnership assets for family members. In most FLP's, the parents are the general partners with at least a 1 percent interest, while the children share the remainder as limited partners. In such a scenario, the parents' exposure to risk of loss of property (assets or a business) held by the FLP is greatly reduced. At the same time, as general partners they maintain full management and control over all partnership assets.

What are the other benefits of a FLP? Besides maintaining control of assets gifted, the benefits of an FLP include, among others:

1. The value of any limited partnership units that the general partner has not transferred and owns at death can be discounted.


2. The value of gifts of limited partnership interest can be discounted so that a donor can transfer a greater value of assets in a shorter period of time by making gifts of limited partnership units.


3. Gifts of limited partnership interest are sheltered from creditors.


4. It has advantages over trusts in that the accounting requirements for partnerships are less restrictive and general partners are not subject to the higher standards imposed upon trustees.


5. FLP can address Gas Leasing and the Marcellus Shale. In conclusion, the FLP contains countless opportunities to assist you with an orderly, tax-efficient and non-adversial disposition of assets or a business to younger generation family members.

Call 215-321-4033 with questions and to learn more.

Estate Planning Law Office of Yvette E. Taylor-Hachoose
1234 River Road Washington Crossing, PA 18977
www.ythlaw.com