Family Limited Partnerships : A Powerful Wealth Planning Tool
At Corus, we take a fully integrated approach to wealth stewardship, always seeking tools that provide versatility and multiple strategic benefits. One of the most effective planning tools we recommend is the Family Limited Partnership (FLP)—often called the “Triple Play” for its ability to deliver three key advantages:
- Estate Planning Discounts – Maximizing tax efficiency
- Asset Protection – Adding a safeguard against litigation
- Generational Wealth Transfer – Ensuring a smooth transition while maintaining control
MAXIMIZING ESTATE PLANNING BENEFITS
FLPs can significantly enhance tax efficiency when transferring wealth. By consolidating assets—especially real estate and business interests—into an FLP, families can apply valuation discounts when gifting partnership units to heirs. This strategy helps reduce estate and gift tax burdens, allowing for more tax-advantaged wealth transfer.
ENHANCING ASSET PROTECTION
As wealth grows, so does exposure to potential legal risks. An FLP provides an additional layer of protection by structuring assets under a business entity, making it more difficult for creditors or legal claims to reach personal holdings. While asset protection strategies require careful structuring, Corus works with families to ensure FLPs are properly designed and maintained to maximize these safeguards.
FACILITATING GENERATIONAL WEALTH TRANSFER WHILE RETAINING CONTROL
As family wealth expands, so does the complexity of managing it. FLPs simplify the process by consolidating holdings into a single entity, making transferring ownership through partnership units easier. This allows parents to gift wealth to heirs at discounted values while still retaining decision-making authority. Over time, an FLP also creates a structured pathway for the next generation to gain financial management experience under parental guidance.
WHEN SHOULD YOU CONSIDER AN FLP?
Given their advantages, FLPs are a valuable tool for many affluent families. Corus generally recommends discussing an FLP strategy when assets approach $5 million. However, because FLPs require formal administration and annual tax filings, the decision should be carefully evaluated.
At Corus, we help families set up and manage FLPs seamlessly, often integrating multiple LLCs under a single FLP umbrella for greater asset protection, tax efficiency, and long-term wealth preservation. If you’d like to explore whether an FLP is right for your family, we’re here to guide you every step of the way.
