Family Limited Partnerships:
FLP terms are very flexible, and can be changed or terminated by the general partners, as opposed to irrevocable trusts which require heavy litigation to amend.
In a family business, the company’s financial challenges can also become the family’s financial challenges.When a business owner dies, the family inherits all his/her assets, including the highly valued (hence heavily taxed) company. All too frequently we hear of a family that has sold off the company to pay crippling estate taxes.
Fortunately, financial estate planners have come up with an effective strategy to counter this problem: the Family Limited Partnership (“FLP”).Although this structure has some technical complexities, the concept is very simple.This article illustrates some of the benefits of this strategy so that you can make informed decisions about the future of your business and your family’s financial well-being. More…
Choosing an Executor and Trustee
with a Family Business
by Kevin M. Flatley
Director, Estate Planning
The Private Bank at Bank of Boston
For over twenty-five years, I have been involved in settling estate planning issues with Bank of Boston clients who own a family business.Over this time I have seen a dramatic change in the way clients choose an executor and trustee.
Early in my career, lawyers and other trusted family advisors routinely suggested a bank trustee, and it was usually a wise choice.The bank settled competing family claims to the business and other assets; advised the family of the future course of the trust; and invested the trust wisely.The bank also accounted to the state and federal tax authorities and the probate court, if necessary.Everything was done in one location, and a most disruptive time in life became somewhat settled.
In the past ten years, though, lawyers and other advisors came to realize that with a bank trustee, “control” passed to the bank, and other advisors were forced into the sidelines.Aware if this, the lawyer as trustee stepped forward.This trend toward lawyers as trustees in itself is not unsettling as some of Boston’s large law firms have been managing trusts for almost as long as some of the “younger” Boston banks. More…