With careful planning, you can take advantage of these rules to provide for your spouse and children, while still preserving some control and allowing maximum deferral of taxes. Beware of naming trusts or estates as beneficiaries. Placing assets in a family limited partnership can help in several ways. You can retain control of your assets while maintaining a steady income interest. Family limited partnerships are great for business succession and containing estate and gift tax exposure on rapidly appreciating assets.
More sophisticated family limited partnerships can yield even greater discounts.
A properly designed family limited partnership can make your assets much safer from future creditors, assuring that you and your heirs retain what is yours. Exciting new laws also allow the use of a family limited liability company in lieu of a family limited partnership to achieve better, simpler creditor protection without sacrificing tax planning. When Bob discussed his 1995 income tax return with his accountant in April 1996, he received an unpleasant surprise. According to Bob's accountant, Bob had fallen into one of the many year-end traps for the unwary. This state and local tax payment, of course, would provide Bob with a deduction in determining his federal taxes.