We form it, service it,
and consult on its use.
Our FLP is a truly asset-protected
customized to you,
not the generic FLP out of a box that
other companies give you.
Convenient Total Asset
Protection For You, Your
everything to form the FLP and
move assets into the FLP for you.
We give you
so you always know how to use and
maintain it. Set it and forget it!
Limited Partnership can allow you to:
save self employment taxes
of your assets
What is a family limited partnership?
The FLP is one of the most effective asset
around. It helps reduce estate taxes, gives you the ability
your assets while denying creditors
them, and has a built in tax
penalty for any creditor who
a court order against you.
In a FLP
you name one
or more general
and one or more limited partners.
General partners can be yourself or
a corporation or your
spouse or other
family member. Limited partners can be LLCs,
spouse, grown children, etc. General
partners are in
complete control while
limited partners have no control. The
law denies the creditor the right to
take any interest in
and if structured properly they can provide
great anonymity. The FLP is the most
widely used and
asset protection tool around.
Family Limited Partnerships are used
to protect real estate,
stocks & bonds,
cash, jewelry, furniture and fixtures and
many other personal and business assets.
FLP is unique
in that it is a tax-neutral
entity. Thus, unlike a
corporation you can
normally freely transfer assets in and
out of the FLP without worrying about
an adverse tax effect.
So, How does it work?
The first thing to do is properly form an FLP
structured to your specific needs.
his takes some important
Second, the partnership agreement
has to be drawn
up and the ownership
carefully decided. Third, the assets
to be properly transferred into the FLP.
We do all of
this for our clients.
Once all of this has been done, it becomes
hard for a
creditor to attack your FLP.
Even if he
sues and gets a
against you, that still does not give him
right to take your assets
in the FLP.
He has to go back to
court and get
another judgment called a charging order.
allows him to get your share of the
from the FLP, but not the
assets. 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.
The rights of an assignee of an FLP
interest are much more
limited than are
the rights of the assignor partner.
If the FLP has undistributed profits,
gets a K-1 and
tax to the IRS on money
he never received
probably never will receive.
As a result of this, few
creditors ever go
for a charging order. Thus your assets
safe! See IRS Rev Rul. 77-137,
977-1 C.B. 178.
FLP Is Confidential
partnership agreement is confidential
and is not filed with
agency. Only you know what it says
you know who the limited
partners are and what assets are
owned by the partnership.
does not have double taxation like a corporation. It is
truly an excellent domestic protection tool when it is
When setting up an FLP and moving
assets into it, if
possible you try to avoid
mixing risky assets with safe
A risky asset is one that is likely to generate a
lawsuit and a safe asset is one that is
unlikely to generate
a lawsuit. Examples
of risky assets are rental property,
airplanes, cars, stock in closely held
etc. Examples of safe assets
are cash, stocks and bonds,
assets etc. Most ideal is to form both a
LLC (both in Nevada for the privacy
and asset protection),
use the FLP to
your home and accounts, and the LLC to
investment real estate.
It is not advisable to put your personal
home that you
currently live in into
an FLP. To do so may
result in the loss
of deductions and valuable capital gains
treatment upon the sale of your home.
Instead, you use the FLP to
equity in the home to protect it. Property
can be done for investment real estate.
can serve as umbrella protection
for all your businesses
and any of your
family members – spouse, children, parents,
etc. If you want the partnership assets to flow through for
estate planning, we will show you how to make it work
seamlessly with your asset protection plan.
Especially in a state like
California, use of an out of
such as a Nevada
or Wyoming LP in
which assets are not carefully transferred
in, can trigger
and higher taxes. Regardless of where
you live, you should never try to transfer
assets into a LP
by yourself. We do the
transfers for clients in such a way
it is a tax-neutral transfer.
We advise you on
what assets are best
to put in your FLP, and what assets are
best protected in another structure.