NJ Lawyers | Middlesex County Estate Planning Law | Green Brook
Green Brook | 08812
A 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 Green Brook 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. Although they do not have nearly the level of formalities as do corporations, limited partnerships are required to have Operating Agreements which must be followed, and the failure to have an Operating Agreement or to follow it can mean that the FLP could be disregarded by a court and treated as it never existed. If the parent is both the General Partner and the only Limited Partner, then a court may deem that since the parent owns all the interests, there is no partnership and the parent simply owns the FLPs assets outright (thus negating the charging order protection and any hoped-for tax benefits).
Amazingly, many FLP operating agreements are drafting in a way that they do not limit creditors’ remedies to a charging order, thus creating opportunities for creditors to pursue alternative strategies to get at the FLP assets. The family limited partnerships lawyers at Maverick & Peters, LLC can walk you through each step of the way during this difficult phase of your life. Families in Green Brook NJ can greatly rely on the sound advice by these experienced estate planning attorneys. Call them today to get started right away. Some people will go to great trouble to fund their FLPs, but never get around to actually gifting the LP interests to the children. This results in wasted opportunities to take advantage of the annual unified exclusion, and ultimately in higher estate taxes paid by the parents’ estate. It also unnecessarily exposes the LP interests to the parents’ creditors during the interim.
If the GP is not structured correctly, control of the FLP can be lost. Thus, it is very important that the GP be structured correctly, which is the real art of asset protection and estate planning. The FLP must be treated as a business entity, and should not be used as a family trust. All the investment holdings of the FLP should be for business or investment purposes, and all payments made by the FLP should facilitate those purposes. With slightly more work, the FLP can provide substantially more asset protection if the LP interests are conveyed to spendthrift trusts formed for the children and not the children outright. For more information on this, contact the experienced family limited partnership attorneys at Maverick & Peters, LLC today. If you're trying to avoid a family limited partnerships in Green Brook or surrounding cities within Middlesex County NJ, call our estate planning law firm today to get the legal assistance you deserve.
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.
Green Brook | 08812
Flp Family Limited Partnership Lawyers in Green Brook, NJ
08812 Estate Planning Law Firm
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Maverick & Peters, LLC 114 Oak Tree Ave, South Plainfield, NJ 07080 (908) 899-1661 http://www.SouthPlainfieldAttorneys.com/
Family Limited Partnership Lawyers in New Jersey
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