Discussion of Jorgensen, Another FLP Case

Steve Akers of Bessemer Trust discusses the Jorgensen case here. Make particular note of the things you should avoid if you want to have your family limited partnership respected for estate tax purposes, including:

  • You need to have real and provable, non-tax reasons to form the FLP.
  • You need to respect the FLP as a separate entity.
    • you must follow all the legal formalities.
    • you should keep business books and records.
    • you should make sure that partnership management has charge of the partnership's assets, including its checkbook
    • don't make disproportionate distributions particularly to pay personal expenses.