Source Publication Abbreviation
Creighton L. Rev.
The substantial and steady increases in the amount a taxpayer can transfer free of federal estate, gift, and generation skipping transfer taxes1 makes transfer tax planning irrelevant when counseling more than 99.9% of Americans.2 Traditional estate planning structures set in place at a time when the estate tax impacted many more Americans may no longer achieve a client’s current estate planning goals. The seismic shift in the estate planning paradigm requires estate planners rethink use of planning structures in light of shifting client objectives. Evaluated in terms of these shifting objectives, the limited partnership may prove just as nimble as the trust in reacting to altered goals of affluent clients who desire continued management as assets pass to the next generation. This Article explores the continued viability and new role the limited partnership can take in estate planning.
This Article takes a closer look at the limited partnership as an alternative to the trust. After summarizing the shift in client perspective and objectives in part two, this Article analyzes specific characteristics of the limited partnership important to achieving those goals in comparison to the trust; in part three, it reveals the general partner, much like a trustee, can provide management of partnership assets and determine the timing and appropriateness of distributions to interest holders. The limited partnership, further, can provide some protection of assets from the immediate reach of a limited partner’s creditors. It also can minimize income tax burdens when compared to a trust. The limited partnership can meet these client preferences and, at the same time, avoid certain downsides of trusts, such as more stringent investment duties and hurdles faced in trust modification. The analysis reveals that the characteristics of the limited partnership, as compared to a trust, make it a viable choice for affluent clients.
Gagliardi, Elaine H., "Estate Planning Choice of Wealth Management Entity: The Limited Partnership As An Alternative To The Trust" (2020). Faculty Law Review Articles. 195.