One of the most difficult aspects of property divorce and family limited partnership is evaluating a fair and reasonable current market value. Each spouse is likely to need a financial expert to determine the fair and current market value of the family limited partnership in order to present the court with a reasonable settlement amount. Rarely does each spouse agree on the amount and the court often splits the difference between the two numbers.
The situation becomes much more complicated when the family limited partnership has been extended to children. Usually, most families only do this once the children are grown. If you have simply kept the children’s financial entanglement limited to the collection or safe keeping of interest payments, then there is no third party arrangement to contend with. However, families who initiated the family limited partnership during a previous marriage and lost a spouse to death or mitigating circumstances may have extended the family limited partnership to include one or more children. Since the children are not divorcing the parents, their financial interest is examined when they are considered to be a limited partner.
In the cases where one spouse’s parents hold general partnership, the value should still be determined. It is dependent upon many factors whether the limited partnership will be able to receive a portion of the funds or whether the entire estate remains in the hands of the general partners. The complexity of this issue grows with more family members receiving or contributing any type of financial consequence.
Before anyone’s financial wellbeing can be considered, the underlying value of the assets within the family limited partnership must be determined. This is generally the specifics of most contested value statements during a property divorce with family limited partnership issues. Without a well qualified financial expert on your side, your interests are not likely to be protected.
As with all financial issues that reach beyond straight income and benefits property, divorce settlements, those who hold a family limited partnership should retain a strong financial expert for their divorce team. Remember that a financial expert can only determine which laws are able to be applied to your situation. As tax laws change, the overall value of a family limited partnership changes as well. Property divorce issues are rarely cut and dry, and you need to be prepared to protect yourself while maximizing your financial gains.