Family Partnerships
A family partnership may be used to freeze the value of an estate by shifting future growth in assets to heirs. It may also be used to fractionalize interest in business or real estate to create valuation discounts. By gifting or selling interests in assets to family members, the fair market value of both the retained and transferred interests is discounted to reflect the difficulty of selling divided interests in businesses or properties, even though the assets in question are still owned by the family.
A minor child can be a partner in a family partnership if the minor is competent to manage his or her own property and participate in partnership activities, or if the minor's interest is transferred to a fiduciary. Gifts in a family partnership can qualify for the $10,000 annual exclusion Gift Strategies where there is no substantial restriction under the partnership agreement on the rights of the donee partners to dispose of their interest in the partnership.
In a limited family partnership arrangement, a parent who is managing partner can retain a great deal of control over the operation of the family business and yet retain the advantages of the partnership format.
For other estate planning services (wills and trusts), contact an attorney or other certified professional who specializes in estate planning services.
