Creating a successful FLP or LLC as a vehicle to preserve family wealth can be a challenge, especially with the ever-changing case law.  While there are plenty of ideas on what not to do when creating an FLP or LLC, Owen Fiore (FioreWealthPlanningConsulting, Kooskia, ID) has created a list of positive, proactive steps that he has aptly named his “Factors of Success.”  These success factors are based upon recent and historical taxpayer defeats and victories in court.

Fiore argues that the Courts start by looking at the underlying plan and advsises that, to “avoid conflicts of interest, consider the use of independent legal counsel for various family members, and, above all, develop realistic and well-supported non-tax purposes for using the FLP or LLC.” 

Fiore offers additional FLP/LLC success factors, as well as an overview of the most important estate and gift tax cases from the past year in BVR’s 2009 Guide to Estate and Gift Tax Case Law – For the Business Valuation Professional (available in November—preorder here.)