FLPs Under Increased Scrutiny

Family limited partnerships are used by the wealthy to reduce estate taxes by discounting the value of the assets in them. FLPs gained popularity in the late 1990s, but the IRS has begun to increase its scrutiny of them.

The wealthy were already concerned about their estate plans in 2010 because of the estate tax mess. Now they also have to consider their FLPs and whether or not they can pass the IRS test.

See Paul Sullivan, Partnerships May Aid Your Estate, but the I.R.S. is Watching, N.Y. Times, July 30, 2010.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.