Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Insurance Limited Partnerships As An Alternate Estate Planning Tool

By Lawrence L. Bell
November 30, 2015

Valuation discounts in estate planning has permitted the transfer of assets from one generation to another in an economically efficient manner. Two of the various discount methods claim lack of control (minority interest discount) and lack of marketability. The IRS has traditionally objected to these approaches in intra-family transfers, while Congress has attempted to legislate away these “loopholes” unsuccessfully and the Treasury Department is contemplating new regulations to accomplish this goal.

In the past, the IRS position was that a minority interest discount was not available in valuing an interest in an entity (corporation, partnership or limited liability company) that was controlled by family members. Revenue Ruling 93-12 reflects that the IRS was unsuccessful maintaining that position. The fact pattern of that ruling involved a shareholder who owned100% of a corporation made gifts of 20% of the stock to each of his five children. The IRS ruled that the family's control of the entity would not be considered in valuing the gifts of minority interests. After the ruling, family limited partnerships (FLPs) and limited liability companies (LLCs) became more popular estate planning vehicles because the available valuation discounts allowed for more wealth to be transferred free from estate, gift and generation skipping transfer (GST) taxes.

Government Efforts

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Removing Restrictive Covenants In New York Image

In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?

Fresh Filings Image

Notable recent court filings in entertainment law.