What does it cost to form, fund and maintain a Family Limited Partnership (FLP)?
Formation and maintenance costs are minimal compared to tax savings and overall security. In addition to legal fees, there are state registration fees. Partnerships formed using Delaware or Colorado law have out-of-pocket costs of less then $500. Not many of these partnerships are formed using Florida law because Florida charges .7 of 1% of the value of the assets used to form the Partnership, and then a specified amount per year to maintain the partnership. The Florida Department of Revenue regulations indicate that a documentary stamp tax of .7 of 1% of the value of real estate needs to be paid if real estate is transferred to a Partnership. Many tax attorneys now believe that these regulations are not valid and are applying for refunds for previously paid taxes. There may also be ways to make the transfer in a manner that would reduce the chances of an audit by the Department of Revenue.
