Thursday, September 27, 2018
The increased estate tax exemption of 2018 to $11.8 million for married couples has caused the estimated number of estates that are will be liable for the tax to plummet to 1,500 from 5,000 in 2017, according to Forbes’ Ashlea Ebeling, sourcing the Joint Committee on Taxation. So what about wealthy families that may now be exempted from paying estate taxes that previously created a family limited partnership, or FLP?
It made sense to gift certain assets or property to FLPs years ago so that the tax burden to the estate would be lessened, but now the administrative costs and duties could seem too tedious. “This is a complicated area of the law, not for a practitioner new to FLPs,” explained tax attorney Marissa Dungey, partner with Withers Bergman LLP. “There are pitfalls if you move forward without proper advice.”
It’s not hard to dissolve an FLP. What’s hard is to consider all the consequences and plan for alternatives.
See Julie Jason, Retirement Planning: Should an FLP be Dissolved Due to Changes in Estate Taxes?, Tuscon.com, September 20, 2018.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.