NJ Lawyers | Middlesex County Estate Planning Law | Clark
Clark | 07066A family limited partnership is basically a limited partnership where the partners are family members. A limited partnership consists of a general partner, who runs the partnership, and one or more limited partners. By law, limited partners do not have any control over how the partnership is run, or any voice in the management of the partnership. Only the general partner has control over the assets of the partnership. Thus, a general partner may only own 1% of the FLP, but controls 100% of the assets in the FLP. Contact the family limited partnership attorneys at Maverick & Peters, LLC to get expertise advice regarding your family limited partnerships situation. They are ready to provide assistance to families throughout Clark and New Jersey. Family Limited Partnerships also have some attraction as asset protection vehicles, primarily because the limited partnership interests may be subject to 'charging order protection' in some states. Many people will go to great lengths to form their FLP and pay substantial fees to a planner to do so, but then never transfer any significant assets to it. Obviously, to the extent that assets are not contributed to the FLP those assets are not afforded either the tax benefits or asset protection benefits of the arrangement. FLP, these are still limited partnerships, which are fundamentally business entities and are not meant for personal use. The family residence should not, for instance, be placed into a FLP, nor should normal family expenses (utilities, clothing, educational expenses, etc.) be paid from the FLP. The use of the FLP for personal purposes could result in the entity being disregarded for tax and asset protection purposes. If an individual dies, or is sued, the management of the FLP may be thrown into disarray and the potential exists for an heir or creditor to take control of the FLP’s assets. Thus, it is a very bad practice to make an individual the GP of a FLP. A common error in FLP structuring is to place all of the client’s significant assets into a single FLP, thus creating a large, single target for creditors to relentlessly attack. As with most other asset protection methods, an FLP will be more effective if it is just one of several diverse methods used to protect assets. The family limited partnership attorneys at Maverick & Peters, LLC are ready to answer your questions and discuss your options. Residents of Clark NJ can greatly benefit from their sound advice. Contact them today. If the FLP will be used to avoid estate taxes by way of discounting the limited partnership interests that are gifted, it is critically important that the limited partnership interests be the subject of a valuation by a qualified appraiser. If no appraisal is conducted, the odds of the discounting standing up to IRS scrutiny are very low. Family Limited Partnerships can and should play a role in the family’s estate and asset protection planning within their limitations. The family limited partnership is just one of many available techniques, and it should not be overused or made into a single large target. Thus, the percentage of the client's total assets that go into a FLP structure should ideally be 25% or less, and not more than 40% except in unusual circumstances (or a very small estate). Avoid promoters who will try to stick nearly everything into the FLP. The FLP should absolutely not be used for personal family purposes, such as to hold the family home or fund college educations. If the family requires money from the FLP, then it should either be borrowed from the FLP at current interest rates or (much better) distributed from the FLP to the various trusts holding the interests, and from there given to family members. Family limited partnership attorney, Vince Maverick, can help you navigate through the complexities of family limited partnerships in Clark NJ. Get the help you deserve by calling him today. Family Limited Partnerships Lawyers serving South Plainfield, Avenel, Bound Brook, Clark, Colonia, Dunellen, Edison, Fanwood, Fords, Green Brook, Iselin, Metuchen, Middlesex, North Plainfield, Piscataway, Plainfield, Rahway, Scotch Plains, South Bound Brook, Warren, Woodbridge, and throughout Middlesex County.
Clark | 07066
Flp Family Limited Partnership Attorneys in Clark, NJ
07066 Estate Planning Law Firm
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Family Limited Partnership Lawyers in New Jersey
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