Join us this month as we discuss the family limited partnership with an article by our managing attorney, Helena Mock. Also, check out our monthly recipe and mind game.
Summer in Roanoke
June 2019 News
The Family Limited Partnership
By Helena S. Mock, Esq.
Estate Planning is a complex area of the law because it deals with so many different issues, from asset protection to taxation and almost everything in between. There are a variety of different legal strategies and tools that have been developed and are regularly used to assist in reducing the value of an estate for estate tax purposes while maintaining control and keeping the assets in the family. 

One of these strategies is the use of the Family Limited Partnership (“FLP”) or Family Limited Liability Company (“FLLC”). With this strategy, a property owner can give away the underlying equity interest in an asset while still retaining managerial control over that asset. FLPs are most commonly used as vehicles for making gifts of interests in real estate and family-owned business interests. With an FLP, you title assets in the name of the FLP and then gift partnership interests in the FLP to others. It is like giving away pieces of a pie. However, because each piece is valued individually, the sum of the parts does not necessarily equal the whole. The fractional ownership of property by multiple individuals allows for the artificial “discounting” of the value of each individual’s share upon their deaths, thereby reducing estate taxes. 

But why are discounts for these interests available? Very simply, it’s because no buyer would pay full price for a fractional interest in a closely-held FLP since profits are shared with the other partners, and the buyer may not have control over how the FLP is managed or when it will be dissolved or the assets sold. The overall value of the property is only artificially diluted by this process, however, because at any time, the partners can agree to dissolve the FLP, and upon termination of the partnership, the assets almost magically return to their full underlying value. 

To continue reading about family limited partnerships, click here for the full article.
Monthly Mind Game
A classic game of Mahjong to keep the mind young. Click here to play
Recipe of the Month
Salmon Burger with Pickled Cucumber
The food processor is your friend when making these salmon burgers, but the key is to make sure the salmon isn't too smooth when processing so the patties can hold their shape. Click here for the recipe! Thirsty? Try these lavender lemonade mojitos .
In case you missed it...
National Health Care Decisions Day
April 16 th is National Health Care Decisions Day. Approximately only one-third of adults in the United States have any form of a written advance health care directive, or medical power of attorney document, to designate who they want to make medical decisions on their behalf if they become incapable of making those medical decisions for themselves. Therefore, the goal of National Health Care Decisions Day is to educate the public about the importance of having a medical power of attorney document in place.

If you do not have a medical power of attorney in place, or if you know someone who does not have a medical power of attorney, use this as an opportunity to talk to an attorney and learn more about what you need to do to make sure that you are protected in the event of incapacity and that people of your choosing will be able to make medical decisions on your behalf. While you are planning for the possibility of future incapacity, a good attorney should also recommend that you execute a durable power of attorney. This will ensure that a trusted family member or friend will be able to use your finances to pay for the medical treatment that your medical agent authorizes on your behalf, as well as manage the rest of your legal and financial affairs in the event of your incapacity.

If you do already have a medical power of attorney, then use this as an opportunity to make sure that your document will protect you adequately and still meets your wishes. For example, is your agent still an appropriate person to serve? Do you have a successor agent named in case your primary agent becomes unable to serve? Does your agent have HIPAA authority to speak to your doctors so she can make an informed decision about your care? Does your document contain language stating that medical professionals can rely on the decisions your agent makes?

Once you ensure that your agent has the proper legal authority, he will need to make your medical decisions, you must also consider whether your agent knows what types of choices you would want him to make on your behalf. A good medical power of attorney document will provide guidance to your agent about your specific wishes. After all, it is difficult to step into someone else’s shoes and make these very personal medical decisions, so providing detailed guidance is a gift to your agent and to yourself to give peace of mind in knowing that your wishes will be known, even if you become incapable of articulating what those wishes are at the time decisions need to be made.

Among the most sensitive decisions to be made is the decision of what treatment you would want to receive when your death is imminent. Many people elect to state their wishes for end-of-life treatment in a separate document, called a living will, instead of including this language in the medical power of attorney document. By expressing your wishes in a living will, you are ensuring that your end-of-life wishes are honored once a doctor determines that you are near death, instead of leaving this final decision up to the discretion of your medical agent.

In addition to stating these wishes in your medical power of attorney and living will documents, it may be wise to talk with your medical agent about your medical wishes. So often, people delay having this conversation, knowing that it will not be a cheerful one. However, having a frank discussion now can reduce anxiety and heartache for both you and your agent if and when your agent needs to act.

National Health Care Decisions Day (NHCDD) is a day of education and awareness, to encourage more individuals to plan for health care decisions. To learn more, click this link .
If you would like to unsubscribe from receiving future newsletters from us, click the link in the footer below. Have an idea for how we can do better? Let us know; we welcome your feedback and suggestions. Finally, thank you for letting us serve you. If you know of anyone you think we can help, please don't keep us a secret. Your referrals are our greatest compliments!

Helena S. Mock, Esq.

461 McLaws Circle, Suite 2
Williamsburg, VA 23185 
Phone: 757-969-1900