January 1999
The Director - Features
A Family Affair
Pass your business to the next generation without taking the IRS as a partner
Funeral service is commonly thought of as a family business. And although the recent increase in funeral home acquisitions has many independently owned firms worried about the future of the profession, a substantial segment of funeral homes will continue to stay family owned for many years to come.
Unfortunately for family firms that wish to pass ownership of the business to the next generation, succession planning has become much more troublesome than in prior generations. Limitations imposed by the Internal Revenue Code on non-taxable transfers between generations have made succession planning very difficult for some families. These new challenges have made planners find new, more effective, legal methods of succession planning.
One of today's most successful methods of achieving family succession planning goals is the use of the Family Limited Partnership (FLP). A Family Affair—Pass your business to the next generation without taking the IRS as a partner, explains the business advantages of FLPs and how an FLP can help small-business owners meet their succession planning goals. It also explains why the Internal Revenue Service dislikes FLPs and areas succession planners need to be aware of when setting up a FLP.
The article was written by Dale L. Rollings, president of Rollings & Associates, P.C., a succession-planning firm specializing in funeral service. He holds a bachelor of arts degree in psychology and a doctor's degree in law from Washington University.
