If a person died on or before the year 2015, and had an estate worth more than $5.43 million, that estate could be subjected to the federal estate tax. There are very few options that a single individual has to limit or avoid federal estate tax liabilities. One option that a person might consider involves transferring part of the taxable estate into a Family Limited Partnership. This partnership arrangement can provide a person with certain tax advantages because the federal estate tax is only based on the fair market value of the property they owned when they passed away. By transferring estate assets into the Family Limited Partnership the tax payer reduces the size of the estate that they individually own and are then able to decrease their estate tax liability.
See Sandra W. Reed, Life Care Planning: The Family Limited Partnership Vehicle to Limit Liability and Estate Tax, Glen Rose Reporter, November 2, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
