NJ Lawyers | Middlesex County Estate Planning Law | Middlesex
Middlesex | 08846
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 Middlesex and New Jersey. Because of the potential federal gift and estate tax benefits and potential asset protection benefits, FLPs are widely marketed by a variety of attorneys, CPAs, CFPs, and other planners.
When utilized correctly, FLPs can be very powerful estate planning and asset protection planning tools. The problem is that FLPs are almost never correctly utilized, and because of this they often fail to produce their promised benefits. 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).
Charging order protection only works for assets that are already in the FLP structure. If the initial transfer to the FLP was a fraudulent transfer, however, the court can simply void the transaction to the FLP as if it never existed. Family limited partnership lawyer, Vince Maverick, can help you navigate through this difficult and unfortunate time of your life. If you're going through a family limited partnerships in Middlesex NJ, give him a call today to see what options are available. Some promoters to induce a sale will promise clients that the limited partnership interests can be significantly discounted, sometimes in excess of 50%. While there is no certain number that will pass IRS scrutiny, discounts in the 20% or less range are much more conservative and less likely to draw attention.
By gifting limited partnership interests directly to a child, the possibility arises of creditors or an ex-spouse of the child getting possession of (or at least a charging order against) the limited partnership interest. By placing the parents gifting the limited partnership interest to a spendthrift trust instead, claims against the limited partnership interest by the child’s creditors and ex-spouses are avoided. 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. 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 Middlesex 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.
Middlesex | 08846
Flp Family Limited Partnership Attorneys in Middlesex, NJ
08846 Estate Planning Law Firm
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Family Limited Partnership Lawyers in New Jersey
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