Estate Planning Strategy for Smith Family

Hard Private Wealth Management Estate Planning

As part of their estate planning strategy, the Smith family seeks to minimize estate taxes while ensuring a smooth transfer of wealth to their two children. They own a family business valued at $2 million and have a total estate valued at $5 million. The family is considering various estate planning strategies to accomplish their objectives.

Which of the following strategies would be the most effective for the Smiths to minimize estate taxes while maintaining control over the family business during their lifetime?

Establish a Family Limited Partnership (FLP) to hold the family business and gift limited partnership interests to their children.

Transfer ownership of the family business to an Irrevocable Trust and remove it from their taxable estate.

Create a Revocable Living Trust to manage the estate and provide for a step-up in basis on the family business.

Hint

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