CASE STUDY

Richard has been a real estate investor for over 40 years. During those years Richard has syndicated and acquired on his own account numerous investment properties. The properties he syndicated ownership in he organized as limited partnerships in order to maintain control and to protect his investors from personal liability. However his personal holdings were vested in his own revocable trust and thus were exposed to personal liability.

Richard became our client in the late 1980’s. Over the subsequent years Richard bought out his various limited partners and/or sold off his various holdings utilizing tax deferred exchanges. Upon acquiring replacement properties Richard acquired title to the new properties in independent pass- through entities such as Limited Partnerships and/or Limited Liability Companies. Utilizing such entities Richard was able to isolate liability from his various investment holdings. Better yet, he was able to contain personal liability and therefore protect his overall wealth from a single liability event associated with one property.

More recently we have formed a Family Limited Partnership (FLP) to take ownership of the underlying investment entities and structured this entity in such a fashion as to include Richard’s heirs via irrevocable trusts. The FLP and irrevocable trusts will be instrumental in protecting the family’s wealth as well as facilitate succession planning and also play a key role in reducing the family’s estate tax exposure.