Family Partnership

Why and when should I start making gifts to my children?

After the FLP has been established, your FLP could be used as part of your estate plan to make “discounted” lifetime gifts to your children. Alternatively, the interest in your FLP could be held until the first of your deaths, after which time the survivor could then begin making gifts of the limited partnership interests to your children. This second use of an FLP has a double benefit; the survivor will receive a a step-up in basis (diminished by any discounts obtained up any tranfer and/or discounts inherent in property transferred at death of the underlying partnership assets for income tax purposes after the first death, and following the survivor’s death the limited partnership interests could still be discounted for estate tax purposes.