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Family Limited Partnerships

Family Limited Partnerships (FLPs) are often used in estate plans as a vehicle for making "leveraged" or "discounted" gifts to the children, which generally reduces the value of the transferred interest for gift tax purposes by 20%--60%, thereby reducing the taxes on that interest by 10--25% or more.

An FLP is simply a partnership arrangement between family members. Typically, an FLP is established by senior family members for purposes of making gifts to junior family members, while allowing the senior family members to maintain control over the management and investment decisions relating to all of the underlying partnership property.

	How is a FLP created/formed?
	How does a FLP reduce the value of my estate?
	Can I retain control over partnership property?
	Can the FLP help me transfer control to my children?
	Why and when should I start making gifts to my children?
	How can the FLP help me make discounted lifetime gifts?
	How does the reduce value help with annual giving?
	Can the FLP protect family members from creditors (including ex-spouses)?
	Does the FLP provide the flexibility I want in estate planning and business operations?
	What happens to property taxes?
	How will placing my real property in a FLP affect the risk of liability for other assets?
	How does the FLP affect the risk of liability experienced by my children?
	Will I still receive a step up in basis on my death?
	Who manages the property in the partnership and decides when it can be sold?
	How will the FLP affect my relationship with lenders,insurers, and others?