A Family Limited Partnership (FLP) is a powerful tool you can use in estate planning. An FLP can protect you from extravagant lawsuits, liability claims that are false in nature, and general litigation that is not your fault.
Lawsuits have more than doubled in the last 30 years. The legal profession has grown because so many people are trying to sue each other for stupid things that aren’t even valid and they are winning at an alarming rate. America is being called “litigation country” and the effects of this suing attitude are driving people into the poor house.
You can establish an estate plan through a family limited partnership and therefore avoid inheritance taxes. It’s a shame that most people pay taxes when they inherit the property or assets of a loved one who has passed away. It is definitely not comfortable dealing with probate courts regarding estate taxes.
By establishing a family limited partnership, you are allowed to maintain control of your assets while also protecting your assets from creditors. Creditors have made a mess of the financial system by attacking families and individuals with various schemes to get money. When you establish an FLP as a major component of your estate planning, you are providing optimal protection for your assets. Even if you are sued and a judgment is entered against you, the creditor may not be able to collect money from your partnership. This forces a person to come to an agreement instead of going through the legal process.
The first rule is to create your plan with an attorney with experience in this field. Most lawyers don’t like to deal with estate planning because that means they have to read up on past cases. Most lawyers will tell you that family limited partnerships don’t exist, which is incorrect. The FLP is an extended hybrid title whose roots lie in a Limited Liability Company.
A partnership, under the Internal Revenue Code, is defined as “a syndicate, group, group, joint venture, business, or other unincorporated organization through which any commercial financial enterprise or operation is carried on.” When you are creating an FLP to control your equity assets, you need to build your partnership using two types of participants: general partners and limited partners.
A general partner maintains control of the FLP. For estate planning, the courts will examine how the FLP is structured. The ration or percentage interest of the general partnership may vary but not exceed 100%. If you were married, you and your spouse could have a 20% general partnership interest and your children could have an 80% limited partnership interest. He would still control all the activity because he is the general partner.
Estate planning without an asset protection plan is a waste of time. It is best to find out what types of benefits are available when you make an estate plan. Many lawyers don’t like to combine them, but more people are beginning to get the information that would help them understand what an estate plan is and how an FLP can be used to protect assets.
Creating a limited partnership family plan is NOT expensive and you don’t need to be a millionaire to do it! The FLP plan will help you discover that you can eliminate income taxes and protect your home advertising business from risk. This plan can really help you and help you protect the wealth you accumulate over the years while living on this side of the green grass.
Estate taxes can be killer expenses that the “average person” can’t afford. When you have an FLP, estate taxes can provide tax savings and reduction. Also, if you are sued and a creditor is trying to collect a judgment against you, your home and other assets may be in the FLP. A general partnership cannot be dissolved because of a partner being sued. A creditor cannot touch the assets of the partnership assets in the FLP. In a court ruling, the plaintiffs seek to use “collection orders” that would entitle the plaintiff only to the distributions he would receive as a general or limited partner.
The best estate planning is to plan your estate using this model. You can include your home, business, stocks, companies, and other assets in this type of planning. This is the best way to protect yourself and your assets without losing everything to a litigation system that now specializes in suing people.