Marketing Letter Regarding the Uses of Family Partnerships

[Date]
[Client Name]
[Client Address]
[Client City, State, Zip]

Dear [Client Name]:

There is a great deal of literature in circulation today concerning the use of family partnerships or LLCs, most of which relates to recent court cases confirming their validity or valuation issues. We can help you sort through all of the information and point out the advantages and disadvantages of using family partnerships or LLCs.
There are many reasons for the growth of family partnerships and LLCs. Some of the commonly cited reasons include—

• income tax advantages,
• transfer tax savings,
• maintenance of control over assets,
• facilitating family gifting programs to keep assets within the family,
• flexibility in management and investments,
• avoiding local probate,
• protection against creditors,
• family communication and harmony,
• control access to wealth and income,
• centralized management over assets, and
• taking advantage of economies and diversification opportunities.

In light of your tax and financial planning objectives, a family partnership or LLC may be a suitable vehicle to accomplish your objectives. As the general partner of a family partnership (or of an LLC), you can maintain management and investment control of the assets, yet you can give away or sell partnership interests or LLC shares to family members. Depending on the specific rights and powers associated with the interests you give away or sell, their value may be discounted for tax purposes, leading to potential transfer tax savings. In addition, both family limited partnerships and LLCs are excellent vehicles for creditor protection purposes, yet are much more flexible than irrevocable trusts.

If you would like more information on how a family partnership or LLC might help you accomplish your tax and financial goals, please don't hesitate to contact us. If you already have a family partnership or LLC, I suggest we review the partnership or LLC agreement to ensure that your intentions are clear in the agreement. Please call at your convenience so we can discuss this matter further.

Best Regards,

 

(Planner or client contact person)

 

Note:   Regs. 301.7216-1 through -3 impose stringent rules on disclosing and using tax return information on tax return preparers. If the client is a tax-only client (i.e., the practitioner has not been engaged to provide other services), the practitioner must obtain written consent prior to sending out materials discussing or promoting nontax services. See PPC’s Guide to Dealing with the IRS for further discussion of the penalty, disclosure requirements, and exceptions.