The National Underwriter reports that family limited partnerships (“FLPs”) are not for everyone, and there can be serious pitfalls to an FLP that is carelessly invoked or improperly constructed. The IRS is vigilant about monitoring strategies it deems to be undertaken to evade paying taxes. So for instance, an FLP cannot be created while the client is on a deathbed, since the IRS will consider that to be a last-minute tax-avoidance ploy.

To read more, see 6 pitfalls that clients eyeing an FLP need to consider | LifeHealthPro.

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.