Why is a Family Limited Partnership a Preferred Structure for Intrafamily Gifting and Ownership?
There are many advantages to using Family Limited Partnerships. These advantages include: #1 Controlled Distributions The General Partner can control the Partnerships and its distributions. Income and profits from the Partnership do not have to be distributed; they can be reinvested., #2 Restrictions Limited Partners can be restricted from transferring, selling or otherwise “losing” their ownership interest. #3 Valuation Discounts A discount can be used in calculating the value of Limited Partnership interest given to family members. For example, a 10% interest in a $1,000,000 Limited Partnership may be valued substantially less than $100,000 for gift tax purposes. Gifts of Partnership interest can qualify for the $10,000 per year annual exclusion if structured properly. #4 Creditor Protection A certain degree of a creditor protection is inherent in owning interest in a Limited Partnership. A Limited Partner’s creditor(s) cannot directly levy upon Partnership assets and cannot “take” a
