Family Limited Partnerships and Limited Liability Companies

A family limited partnership and a limited liability company are both legal entities which are often created for owners of family businesses or other closely held businesses or owners of rental properties or investment portfolios. While these entities are created for legitimate business purposes, they also serve useful estate planning purposes. For example, making a gift of limited partnership units is better than giving cash or directly transferring the actual investment asset. This is because the limited partners are very restricted in terms of their involvement in the operation of the family limited partnership and their ability to transfer their units. For this reason, the value of the family limited partnership units may be reduced (sometimes significantly) for gift or estate tax purposes. Our attorneys are experienced in handling these types of valuations.