Family Limited Partnerships

Family Limited Partnerships in Brief:

Highlights:

  • Assets held in the Family Limited Partnership (FLP) may not be reached by your creditors -you no longer own them
  • No significant U.S. Income Tax implications
  • Fraudulent conveyance issues minimized or eliminated
  • You may retain management of the assets
  • You may structure the FLP so as to provide estate tax benefits

How it Works:

  • A creditor pursing your ownership interest in the FLP can obtain the right to the income you receive -but not the management rights, thus you decide whether or not to pay yourself income, but the creditor would be liable for US Income Tax on any undistributed income accumulated in the FLP
  • Suitable for U.S. real estate investments