A Courtesy Sneak Peak at Our New Book

A conversation about "A Guide to Crafting Personal Legacy Statements" with Don West, Jr. and Tim Mor

Under what circumstances will a family limited partnership reduce transfer taxes?
Family limited partnerships (FLPs) can be effective tools for asset management, facilitating pooling of investments and economies of scale. If properly structured and administered, they also allow you to remove a substantial percentage of the value of the partnership assets from your taxable estate.Some of the more common assets that are transferred into FLPs include:Real estate;Closely held stock;Marketable securities; andOther limited partnership interests.How an FLP worksAfter the FLP is properly funded, the donors will often gift part or all of their partnership interests to ot

What is a Family Limited Partnership (FLP)?
A family limited partnership (FLP) is a legal entity formed under your state's limited liability partnership law between you and some of your family members.Does and FLP work just like a standard limited partnership?An FLP works like any other limited partnership under your state's statutes. The FLP has two kinds of partners: general partners and limited partners.Th

What are an ILIT's components?
Irrevocable life insurance trusts (ILIT's) are used to:create an estate for heirs using life insuranceshield life insurance payouts from estate taxreplace assets given to charities or placed in IIOT's (Irrevocable Income Only Trusts)People often make the mistake of naming their estate as the beneficiary of their life insurance policy. This makes the proceeds of the policy, known as the death benefit, part of the taxable estate. A simple way to avoid estate tax issues is to transfer life insurance policies into an irrevocable life insurance trust. The value of the insurance remains outside your taxable estate,

Why would I want my irrevocable trust to own my life insurance?
If you own life insurance, it is included in your taxable estate and the proceeds will be taxable for federal estate tax purposes. So, in 2009, an individual is allowed a federal estate tax exemption on their first $3.5 million of assets, including all life insurance policies in their name. (This fact comes as a surprise to many people but this treatment of insurance proceeds dates back almost to the inception of

What is an irrevocable life insurance trust?
An irrevocable life insurance trust (ILIT) is an irrevocable trust that is created to own and be the beneficiary of life insurance policies on the trust maker's life. A reason to use this type of trust is to remove the insurance proceeds from a person's taxable estate. Remember, that normally when you own a life insurance pol