How would setting up a Family Limited Partnership (FLP) and Limited Liability help?
Both FLPs and LLCs let you reduce estate taxes by transferring assets like a family business, farm, real estate or stocks to your children now, yet you keep full control. For example, you and your spouse can set up an FLP or LLC and transfer assets to it. In exchange, you receive ownership interests. Though you have a fiduciary obligation to other owners, you control the FLP or LLC either through the general partner or as manager, and you can give ownership interests to your children, which removes value from your taxable estate. The ownership interests cannot be sold or transferred without your approval. And because there is no market for these interests, their value is discounted. So you can transfer the underlying assets to your children at a reduced value – without losing control.
