Family Limited Partnerships
A limited partnership is a type of business organization where general partners hold the management responsibilities and rights. The general partners acquire all of the shares and transfer some or all of their assets into the partnership. They can then distribute shares to limited partners. A family limited partnership (FLP) operates the same way, except that the general and limited partners are related to each other.
If you have a large estate with numerous holdings, establishing an FLP could potentially protect your assets against future creditors. It could also save you substantial amounts in estate and gift taxes. A family limited partnership can also help protect the family’s assets against failed marriages and be of benefit in succession planning. An experienced Texas estate planning lawyer should be consulted if you are considering establishing a family limited partnership.
The Importance of Hiring a Texas Probate and Estate Planning Attorney
While there can be many benefits from establishing an FLP in Texas, it must be understood that they are not for everyone. Because a family limited partnership is set up as a business, the IRS scrutinizes them. Hiring an attorney who is experienced in both estate planning and tax planning is very important. There are numerous pitfalls that you can encounter if you have not gotten advice from a lawyer who is knowledgeable in both of these fields.
At Clausell Law Firm, PLLC, we work directly with our clients, and want our clients to be secure in the knowledge that their peace of mind is of great concern to us.