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Family Partnerships: Navigating the Discounting Rules for Family-Controlled Entities

Lack of Control, Lack of Marketability, and Minority Discounts

A live 110-minute CPE webinar with interactive Q&A

This program is included with the Strafford CPE Pass. Click for more information.
This program is included with the Strafford CPE+ Pass. Click for more information.
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Wednesday, May 7, 2025

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

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This course will provide trust and estate advisers who work with high net worth individuals and partnerships with a thorough review of family-controlled entities and valuation discounts. The speakers will discuss the current landscape of family entity structures; valuation discounts for lack of marketability, lack of control, and minority interests; and the interplay between estate planning and income tax, particularly concerning planning to obtain a step-up in basis upon death.

Description

Consolidating assets in an FLP or other family entity, as well as obtaining other nontax benefits, remains an effective tool to manage assets and potentially reduce estate, gift, and GST tax through valuation discounts for lack of control and lack of marketability. Most recently, the Tax Court in Estate of Fields v. Commissioner, TC Memo 2024-90¸analyzed a deathbed FLP that resulted in the application of Section 2036 (as well as the double inclusion issue posed by Section 2043).

In Estate of Nancy H. Powell v. Commissioner, 148 T.C. No. 18 (2017), the Tax Court applied Section 2036(a)(2), the less common arm of Section 2036. It stated that since, in conjunction with the other partners, the decedent could dissolve the partnership, the decedent had retained an interest in the assets, which were consequently pulled back into the estate at their date of date value. This ruling has caused trust and estate planners to take a fresh look at FLPs and closely held entities in estate plans. Trust and estate advisers working with family wealth need to understand how to consolidate and protect these assets by transferring assets to closely held structures, which may be eligible for valuation discounts for transfer tax purposes.

Listen as our panel of wealth transfer experts explains using closely held family entities and valuation discounts to preserve family wealth.

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Outline

  1. Estate planning with closely held family structures
  2. Family-held entity structures
  3. Tax and nontax benefits
  4. Valuation discounts
  5. Section 2704
  6. Relevant cases
  7. Reporting FLP transfers on federal gift tax returns

Benefits

The panel will discuss these and other important issues:

  • How Fields and Powell, and other decisions influence estate planning
  • Walkthrough of a recent FLP case
  • Section 2704 and its impact on FLPs, LLCs, and other family-controlled entities
  • Applying lack of control and lack of marketability discounts
  • Determining clients best suited for FLPs and valuation discounts

Faculty

Weeg, Christopher
Christopher C. Weeg, J.D., LL.M., CPA
Partner
Comiter Singer Baseman & Braun

Mr. Weeg, partner with Comiter Singer, is Board Certified in both Tax Law and in Wills, Trusts and Estates and is also...  |  Read More

Additional faculty
to be announced.
Attend on May 7

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CPE On-Demand

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