Previous
Page Family Limited Partnerships What if you could sign a document,
write a check for a few hundred to a thousand dollars and begin
to - save thousands of dollars in income tax
every year
- save self employment taxes
- save hundreds of thousands in future estate
taxes
- insulate your assets from the lawsuit
epidemic
- retain control over your assets?
An excellent tool for
protecting your home Sound interesting? Well what is a family limited
partnership? It is one of the most effective asset protection
tools around. It helps reduce estate and income taxes, gives
you the ability to manage your assets while denying creditors
access to them, and has a built in tax penalty for any creditor
who receives a court order against you. General partners are
in complete control while limited partners have no control.
The law denies the creditor the right to take any interest in
the partnership, and if structured properly they can provide
great anonymity. It may sound like a mouthful and it is. They
are among the most widely used and effective domestic asset
protection tools around. Family Limited Partnerships are used to protect
real estate, stocks & bonds, cash, jewelry, furniture and
fixtures and many other personal and business assets. The FLP
is unique in that it is a tax neutral entity. Thus, unlike a
corporation you can freely transfer assets in and out of the
FLP without worrying about an adverse tax effect. So, How do They Work? The first thing we do is legally and properly
form an FLP that is structured to your specific needs. This
takes some important planning. Second, the partnership agreement
has to be drawn up and the ownership carefully decided. Third,
the assets have to be properly transferred into the FLP. Once all of this has been done, it becomes
very hard for a creditor to attack your FLP. If he gets a judgment
against you, that still does not give him the right to take
your assets in the FLP. He has to go back to court and get another
judgment called a charging order. That allows him to get your
share of the distributions from the FLP. If you do not distribute
anything, then the creditor gets nothing. He cannot take your
position and run the FLP. He cannot force you to distribute
assets. If the FLP has undistributed profits, the creditor gets
a K-1 and must pay tax to the IRS on money he never received
and probably never will receive. As a result of this, few creditors
ever go for a charging order. Thus your assets are safe! Your partnership agreement is confidential
and is not filed with any government agency. Only you know what
it says and only you know who the limited partners are and what
assets are owned by the partnership. An FLP does not have double taxation like
a corporation so you do not have to worry about that. It is
truly an excellent domestic protection tool when it is properly
structured and implemented. NEXT
National Business
Incorporators, Inc.
Direct: (760) 774.2340 Fax: (760) 406.9331 E-mail: National
Business Incorporators, Inc. We look forward to serving
you! |