The Advantages of Family Limited Partnerships (FLPs)
A Family Limited Partnership (FLP) provides four considerable advantages that are unavailable through any other asset protection vehicle. These advantages are:
Asset Shield – a FLP can be used to protect business and personal assets from creditor judgment since a creditor of a partner cannot seize assets of the partnership to satisfy a debt.
Deter Litigation – a judgment creditor cannot seize the assets that are protected in a FLP, so having an FLP in place discourages creditors from filing a lawsuit since they will not be able to collect on any judgment.
Reduce Income Taxes – a FLP can be used to reduce income faxes by shifting income to lower bracket family members through gifting of partnership interests. Gifting can be done to children or grandchildren over the age of 14. A nonprofit organization can also be included as a partner in the FLP to further reduce taxes.
Reduce Estate Taxes – by gifting limited partnership interests valued at $10,000 or less to children or other family members each year, you can realize significant estate tax savings since these gifts will not be included in your estate for tax purposes nor subject to gift tax.
If you need more information on a Family Limited Partnership or other asset protection vehicles, contact our Jacksonville Florida estate planning law firm.
