UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next
Author: nbg One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75381  
Subject: Keeping it all in the family Date: 8/27/2003 11:08 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
(Posted to a couple boards)

Any comments about using these vehicles in estate planning?
nbg

http://www.chicagotribune.com/business/investing/personalfinance/chi-0308260183aug26,1,6334049.story?coll=chi-businessyourmoney-hed
(free registration required, I believe)

<snip>

Among the fastest-growing strategies in estate planning in recent years have been a couple of exotic-sounding devices called the family limited partnership and the family limited-liability company….

Despite their daunting names, the strategies are fairly simple in concept. They allow a family to structure ownership of its assets in a form that resembles a conventional business arrangement: a limited partnership or limited-liability company. The difference here is that only family members own shares or partnership interests….


<end snip>

and

<snip>

Families can use the unified estate and gift tax credit, which allows any person to give or bequeath $1 million in assets without federal tax, to shelter such gifts. And with a 40 percent discount, about $1.60 in "true" value can be transferred for every taxable dollar. Thus the tax-free $1 million becomes a tax-free $1.6 million. For two parents the amounts can be doubled. (The unified credit is scheduled to rise to $1.5 million in January and $2 million in 2006.)

The strategies may also be able to use the $11,000 annual gift tax exclusion to transfer about $18,000 every year without tax.

Over the years, the IRS' principal line of attack on such transfers was to argue that they were not entitled to the discount or the discount was too high, but this has gotten a chilly reception from the courts.

Recently, though, the agency has challenged the form of the transfer and has had better luck.


<end snip>
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement