Family Limited Partnerships And LLCs

Protecting Your Assets And Reducing Your Tax Liability

If you have substantial investments, business interests or real estate holdings that you wish to keep in your family, you may benefit from the estate planning strategy of forming a family limited partnership or limited liability company (LLC) to own and manage those assets.

At Spencer Law Firm LLC, our attorneys have a sophisticated understanding of the potential uses of family limited partnerships and LLCs in estate planning. We frequently advise clients on the potential benefits of these entities and assist with the creation and maintenance of them.

Understanding The Benefits Of Family Business Entities

Limited partnerships and LLCs are business entities that are often used as estate planning and asset protection tools due to the flexibility permitted by state law in the design of these entities. The main advantages of family limited partnerships and LLCs include:

  • Retained control: In a family limited partnership, you can retain control over your assets during your lifetime by making yourself the general partner of the entity. In an LLC, you can accomplish the same outcome by entering into an operating agreement.
  • Reduced tax exposure: By granting your children or other beneficiaries limited partnership interests or minority shares, you may be able to obtain a discount from the IRS on the portions of those interests that will be considered gifts for gift tax purposes.
  • Asset protection: Family limited partnerships and LLCs provide important protections from lawsuits. Creditors of the entity cannot collect against the assets of the owners, and creditors of the owners have little motivation to collect against the assets of the entity.

Not everyone will benefit from these strategies, so it is important to consult with a lawyer before setting up one of these entities. To schedule a consultation, please contact us at 717.207.7935 or by email. Based in Lancaster, we serve clients throughout Pennsylvania.