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It has come to my attention that some of my colleagues have taken the position that virtually everyone should establish and use a limited partnership to hold their assets. I vehemently dispute that stand; but lest I talk someone out of a LP, who really needs one, let me reaffirm the fact that the Limited Partnership is probably the single best tool for reducing taxes, and keeping creditors out of your pocket book. BUT, THEY ARE NOT EFFECTIVE FOR EVERYONE.
In my view, there are essentially two reasons for establishing a limited partnership. The first is the reduction of one's estate and therefore estate taxes and administration fees. The limited partnership is an excellent tool for transferring assets to children or other persons, without giving up use and control of those assets. But if your estate is not likely to increase in value above the threshold for triggering an estate tax, one should think twice before being talked into establishing one.
The second reason, for establishing a limited partnership is to put your assets beyond the reach of creditors. I am at the front of the pack extolling the virtues of limited partnerships for that purpose. Even if you don't have an estate large enough to cause you to worry about paying estate taxes, a limited partnership will protect the property that you have worked so long and hard to accumulate. But if you are retired and the greatest risk of liability you have is driving to the market or to church on Sunday, make your promoter give you a very good reason before you shell out the price of establishing a limited partnership. A million dollar umbrella insurance policy will be a great deal cheaper and much less hassle.
For those who can make use of a limited partnership, they are very inexpensive to establish and maintain. My fee for establishing a limited partnership is typically $1,000.00; a fraction of what some of my colleagues charge. But even that is too much to pay, if it won't help you.
If you think a limited partnership may be of use to you, but you are still not sure, you may be interested in my booklet on limited partnerships. The booklet contains a detailed explanation of how a limited partnership works, how to set it up, and how to maintain it. It includes all the agreements, transfer documents, and even tax forms with instructions. The booklet and forms comes as PDF files on a CD, and I include all the agreements and transfer documents, in Word or Wordperfect format, so that you don't even have to retype anything. The price of the CD is $59.00. Send check or money order to Kenneth D. Sisco, 11252 Arroyo Avenue, CA 92705. Tell me what word processor you use, and give me two weeks for delivery.
If you buy the booklet and establish your own limited partnership, I will review all of your documents for an extra $200.00, to make sure you have done it right. If you buy the booklet and then decide you want me set up the partnership for you, I will give you a $150.00 credit; but you must read the book so that I don't have to spend so much time educating you.
For more detailed information on Limited Partnerships, please see, Limited Partnerships.
Copyright ©1997 Kenneth D. Sisco. All rights reserved.
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