An important goal of estate planning is to protect income and assets from creditors' claims and tax collection. While many people think asset protection involves dishonest techniques, there are many ways to protect personal property, real estate and other assets. In addition to federal and state laws that exempt certain types of property from creditors' claims, there are numerous estate planning tools that may be able to shield assets from future creditors and reduce or eliminate estate or income taxation. One such tool is the family limited partnership (FLP).

Family Limited Partnerships and Asset Protection.

An FLP is a valuable asset protection strategy for a family whose members want to preserve their assets while retaining control over them. An FLP is a specially designed limited partnership, consisting of one or more general partners who are responsible for managing partnership affairs. The other partners are called limited partners, and they are not permitted to participate in any management decisions and generally have no vote and have limited rights.

Valuation Discounts.

Because interests in FLPs are generally not marketable (that is, interests in FLPs cannot be converted easily to cash at a known market price), a discount for lack of marketability is typically appropriate. Such a discount significantly reduces an FLP's value for estate tax purposes. A minority discount may also be available to reduce the valuation of an FLP interest given to a limited partner who has a noncontrolling interest in the FLP.

Annual Gift Tax Exclusion and Gift Tax Exemption.

FLPs are often designed to reduce estate and gift taxes by taking advantage of valuation discounts while making gifts utilizing one's annual gift tax exclusion of $12,000 and the gift tax exemption of $1,000,000.

Once an FLP has been established and property is transferred thereto, limited partnership interests may be given to on family by means of an annual program taking advantage of the $12,000 annual gift tax exclusion. Larger blocks of limited partnership interests, taking advantage of the gift tax exemption, may also be made without incurring gift tax.

Shielding Assets from Creditors.

An FLP provides a substantial measure of protection against creditors. By using such an entity, the family assets will be titled away from one's family, although they are given ownership in the family assets. Without the partnership, a transfer to a child could involve giving title to the child, exposing the title to creditors, spouses, and taxing authorities. The transfer of limited partnership interests passes no control, and any claims by creditors, spouses, or taxing authorities against a child may only be asserted against the limited partnership interests without the ability to reach the property itself.

Absent a fraudulent conveyance, a Florida judgment creditor cannot reach the assets inside the partnership and cannot attach the partnership interest. A creditor is limited to obtaining a charging lien. This means that the creditor would be entitled to distributions only when the FLP actually declares distributions.

If no distributions were made, then the creditor would receive nothing. Additionally, the IRS has ruled that a creditor with a charging lien on a partnership interest must recognize a pro rate share of the partnership's income, whether or not it is distributed. Accordingly, creditors rarely assert charging liens against partnership interests or will settle their claims at a substantial discount.

Conclusion.

Taking steps to protect your assets from creditors' claims, the availability of valuation discounts to reduce the estate or gift tax value of an FLP, and strategic use of the annual gift tax exclusion and gift tax exemption can result in significant preservation of your assets.

By: Joshua Keleske
Joshua T. Keleske, P.A. proudly serves families in the Tampa Bay area with their estate planning, estate and trust administration, and business planning needs. If you have questions regarding how we can be of assistance to you and your family, please contact us at anytime at 813-254-0044. We are happy to answer your questions and arrange for an appointment to speak with you.

Please also visit http://www.trustedcounselors.com to learn more about Joshua T. Keleske, P.A.

Parents usually feel responsible when their children do bad things - a sense of shortcoming or failure when children make bad choices or carelessly cause harm to another. However, whether parents can be held legally liable for the acts of their children is not commonly known. The answer, not surprisingly, is sometimes "yes" and sometimes "no."

General Rule
The general rule is that the mere relationship of parent and child does not impose any legal liability on the parent for the bad acts or carelessness of the child. Instead, parents can be held liable only where the child is acting as an agent of the parent (that is, acting under the authority or the direction of the parent) or some negligence (carelessness) of the parent made the bad act possible.

Regarding liability as an agent, some examples would include harm resulting from a car accident caused by the negligence of a child when the child was running an errand at the direction of a parent or a parent encouraging a child to physically attack another person.

Parents can also be held liable for their own negligence which contributes to a child causing injury to another. Examples of that type of behavior would be a parent serving a child alcohol and then permitting the child to drive a car, or a parent failing to properly supervise a child in a store, which leads to the child damaging fragile merchandise.

So, the general rule is that the child must have been acting on behalf of the parent or the parent must have made the harm possible through the parent's own negligence in order for the parent to be held legally liable for harm caused by a child.

Statutory Liability
Parents can also be held liable for certain bad acts of their children under a statute titled "Liability for Tortious Acts of Children." That statute provides that any parent whose child is found liable or adjudged guilty by a court of a willful act resulting in personal injuries or property damages shall be held liable to the person who suffers the injury.

The statute applies to willful (intentional) acts of children, such as violence or vandalism. If those types of intentional acts are committed, a parent can be held financially responsible up to certain dollar limits, despite having no prior knowledge, involvement or opportunity to prevent the harm.

The limits of liability are $1,000 for injuries suffered by any one person as a result of one act or a continuous series of acts and the total sum of $2,500, regardless of the number of persons who suffer injury as a result of one act or a continuous series of acts. Accordingly, if a child violently attacks and hurts another child, the parents of the attacking child can be held liable for up to $1,000 of damages. Also, if a child commits a series of continuous acts of vandalism, such as damaging several houses one night, that child's parents could be held liable for $1,000 of damages for each person harmed and a total of $2,500 for the whole vandalism spree, regardless of the amount of damages or number of people affected.

Although the general rule is that parents are not held liable for the acts of their children, there are certain situations in which parents will be held responsible for the bad acts of their offspring.

By: Timothy Rayne
Tim Rayne is the author of numerous publications on Personal Injury Law and is a graduate of the Temple University Beasley School of Law's Master's in Trial Advocacy Program. Tim can be reached at http://www.macelree.com/traynelaw

Legal trusts have become one of the most common ways to protect an estate. It can shield and distribute assets according the wishes of the settlor (creator of the trust) and ensure the longevity of a business. In a previous article, we mentioned 3 common types of legal trusts. They included the qualified personal residence trust (QPRT), credit shelter trust (also known as a family trust) and the dynasty trust. Given the settlor's objectives, each of these could be used for varying purposes. Below, we'll describe 3 more common types of legal trusts that you should consider.

#1 - Irrevocable Life Insurance Trust

Increasingly common amongst those who own businesses or other highly-valued assets that can't be liquidated quickly, the irrevocable life insurance trust uses your life insurance policy to pay for your estate costs. Business owners typically don't want their heirs to have to sell the business in order to pay the estate costs. Liquidating under those circumstances can have a significant impact on the value of the business. Instead, the settlor's life insurance policy is used to pay for estate costs that are associated with the business.

#2 - Special Needs Trust

When a person receives financial support from the government, those benefits can be disqualified if that person inherits a large sum or receives a sizable gift. To ensure those benefits aren't jeopardized, a special needs trust can be established. Any gift or inheritance can be placed within the trust. An experienced attorney will often include a special provision within this type of trust. The provision can cause the trust to expire if the beneficiary's governmental benefits are ever subject to disqualification.

#3 - Qualified Terminable Interest Property Trust

Your family may include people who are members by virtue of divorces and remarriages. In some cases, you may want to ensure that the bulk of your estate is received by certain relatives. Many people use a qualified terminable interest property trust when they have children and marry someone who has their own children. This type of trust can be established to make certain their assets are given to their biological children when their spouse dies. In doing so, they can remove the possibility of someone else's children receiving a share of their estate.

Why You Should Hire A Lawyer

If your estate is worth a sizable amount, you should hire an attorney who is qualified to offer estate planning advice. A good lawyer can help you create the right kind of trust for your unique circumstances. He can review your objectives with you and create the type of trust that will best protect your estate. He can offer legal advice that will help you establish provisions and conditions that address how the trust distributes your assets after you die. Creating a trust for your estate deserves the attention of a trained legal professional.

By: Eric Gehler
Consider these Virginia Lawyers and Virginia Attorneys when in need of legal services.

Despite being a nuisance, not all telemarketing calls are illegal. In fact, most of the telemarketing calls you receive are probably perfectly legal and are not something you can legitimately complain about. Thus, just as it is important to know your rights as a telephone consumer, it is also your responsibility to know when a telemarketing company is within their rights to call you.

When are telemarketing calls legal? Telemarketing calls are legal if they follow the rules stipulated by the Telephone Consumer Protection Agency (TCPA). The following are some examples of when a telemarketer is permitted to phone you:

Between the hours of 8 and 9 - A telemarketer can call anytime between 8 am and 9 pm, unless you have requested to be placed on the telemarketing firms internal do not call list, or it has been 31 days after you registered your phone number with the National Do Not Call Registry.

Companies with whom you have an established business relationship (EBR) - Any company you have purchased a product or service from is an EBR company and is permitted to call you until you request to be placed on their do-not-call-list.

The affiliates of EBR companies- The affiliates of the business you have a relationship with are allowed to contact you as long as they are selling a product or service that is associated with that which you purchased from the company. Affiliates can legally call you until you ask them specifically not to.

Any company you have given permission to contact you - If you give any company permission to contact you with phone or fax solicitations, or automated phone calls, they can legally contact you via these methods of communication. This also includes any third party telemarketer who has bought your contact information from a company to whom you authorized to sell it. Therefore, be careful about signing any forms before reading the fine print first.

The company calling is exempt from the National Do Not Call Registry - non profit organizations (I.E. charities), government organizations, and survey groups are permitted to call, even if you have made the request for them to stop. The reason is because though we tend to think of these organizations as a form of telemarketing, the nature of these call isn't to make a sale, it is usually to ask for your opinion or your charity.

By: Dwayne Eisen
Thus, most telemarketing calls are legal until you take action to stop telemarketers and annoying calls by making the necessary requests to be removed from call lists.

Dwayne is an old consumer advocate who has way too much time on his hands (the wife says) so he rants.