The Treasury Department has issued new proposed regulations that, if adopted as proposed, will effectively eliminate a common estate planning tool used to transfer wealth among family members. That tax planning tool is the Family Limited Partnership (“FLP”) or Family Limited Liability Company.
Let’s start with the basics. A family creates a FLP which provides a centralized vehicle through which the family can not only manage a portion of its wealth, but also provide a governance structure through which the younger generation can learn the art of running a family business (if the FLP holds the family business) from the senior generation. The older generation receives both general and limited partnership interests for the assets transferred to the FLP. At some point in the future, [Read more…] about Estate Tax Planning Strategy – Minority Interest Valuation