A judgment creditor of one of the partners is entitled to any distributions that would be made to that partner, and pays taxes on the partnership income attributable to that partner. In California, the court could order the foreclosure upon and sale of the partnership interest if such a foreclosure could be shown to have no appreciable effect on the partnership's business. Because of these advantages, many people are using limited partnerships to split income, train family members in the management of family assets, reduce their gift and estate tax liability, and protect those assets from seizure by creditors if that seizure would materially injure the business. A good plan requires professional involvement at all levels, and is done with the assistance of a planning team of experts who will help you execute a plan to accomplish your goals. Clear thinking leads to right action.
Right action leads to peace of mind.
Copyright 1996 by Arnold Fitger Williams, Counsellor at Law. All rights reserved. I thank Esperti, R. and Peterson, R., for permission to quote from Loving Trust. No copies of this pamphlet are permitted without the permission of the author.