One of the preferred tools for securing a family business and making certain it will be around for future generations is the Family Limited Partnership. More commonly referred to as FLPs, this arrangement is an important part of business succession planning.
If you have questions about FLP asset protection in Coral Gables, the right attorney can provide the answers. These partnerships are frequently used by parents who own a company, allowing them to pass it on to their kids in the future. Veliz & Associates, P.A. can assist you with evaluating your options and determining if an FLP is right for you.
These partnerships are similar to trusts in that they involve transferring formal ownership of certain assets to a legal entity. However, this approach offers more control, as the creator of the FLP can serve as the general partner that controls the assets that were just transferred.
The FLP can be set up in a way where the general partner owning 1% interest can control the management of the assets and the other 99% can be limited partnership interests without any power to control the management of the assets. As part of a plan to minimize estate taxes, limited partnership interests can be transferred to trusts for the next generation, normally at a discounted valuation.
It is important to note that there are other potential tax implications that come with creating and operating these partnerships. Unraveling these challenges and avoiding unnecessary liability starts with speaking to an attorney in Coral Gables about FLP asset protection.
While most people do not qualify for estate tax obligations, there are other benefits that come with setting up assets in this fashion. When a family transfers property to an FLP, they can shift certain tax burdens to future generations, including avoiding immediate capital gains and income taxes. Because the grantees will likely be at a lower tax bracket, the total bill owed to the government has the potential to be much lower.
The benefits and drawbacks of using an FLP in Coral Gables for asset protection may not be immediately obvious. That is why it is so important to seek help from an estate planning attorney right away.
While tax benefits are the primary concern for many people, it is also possible to shield assets from creditors and other third parties with the use of an FLP. This could include from judgement creditors following a lawsuit or even potential loved ones involved in a family dispute. The chance to keep these important assets out of the hands of other interested parties could be invaluable for business succession planning.
There are many reasons why a Family Limited Partnership could be in your best interest, but one mistake or miscalculation could result in consequences that impact your family across multiple generations. Call an attorney from Veliz & Associates, P.A. right away to discuss Coral Gables FLP asset protection.
We evaluate your case and determine how we might be able to help.
We will meet with you to discuss your next options and lay out a plan.
Our team guides you throughout the process so you feel confident about your choices.
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