[WSBAPT] Residence into an FLP?

[jeffrey winter]

Listmates:
 
I have a PC that has a larger estate (easily taxable at the federal
level).  The client is single, and has children.  The client was initially
not adverse to paying the government in the form of estate taxes upon
death, but may be having second thoughts about that.
 
The assets consist mostly of a business (together with an office
building), two residences, and investments.  The client has a 'significant
other' to whom the client wishes to leave a life estate in the residential
properties.
 
The client's financial advisor has recommended a 'layered' approach:  put
the office building and both residences into an FLP, and create a
corporation to function as the general partner of the FLP.  Then gift out
units of the FLP to the kids.
 
While I am familiar with the strategy, I am not sure about putting the
residential properties into an FLP.  I was always under the impression
that there had to be a valid business purpose underlying the transfer of
assets to the FLP.  Even if such a purpose exists, however, how does one
deal with the client's intent to leave the paramour a life estate?  Leave
her a life estate in the client's share of the FLP units?  That would seem
overbroad, as she is not intended to have any control over the office
building...
 
Any suggestions as to the mechanics of how this might be accomplished?
 



Jeffrey D. Winter




Law Office of Jeffrey D. Winter, P.S.
604 North Main Street
Ellensburg, WA 98926
(509) 925-9600 tel.
(509) 925-9606 fax




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