Forming Family Limited Partnerships (FLP) or Companies (FLLC)
Partnerships provide great flexibility in family income and estate tax planning. While the partnership vehicle has been around for a long time, there has been a recent surge in its use in family situations to shift income, wealth, and asset appreciation from higher-bracket, older generation family members to lower-bracket children and grandchildren. They are especially useful now that tax rate increases, including the Health Care Act’s additional .9% Medicare tax on wages and self-employment and 3.8% Medicare contribution tax on net investment income are effective in 2013. This article discusses the potential advantages and disadvantages of forming these partnerships.


