Closely-Held Business Symposium: The Uniform Limited Partnership Act
Limited partnerships are an important entity alternative for a segment of businesses that can be categorized as family businesses. Family businesses have many of the same needs as other operating businesses, on one hand, and special purpose asset protection devices on the other. Family businesses, however, often present unique business succession and control issues reflecting family dynamics and intergenerational wealth transfer concerns. The primary purpose of this article is to analyze the new Uniform Limited Partnership Act, ULPA (2001), for its fitness under the federal wealth transfer taxes. It will also briefly identify some of the unique concerns common to many family businesses in conjunction with ULPA (2001).
Federal taxation of intergenerational wealth transfers is, of course, an important part of planning for the family business and, indeed, the almost exclusive focus of this article. Increases in the unified credit, however, make wealth transfer tax issues of little relevance in the vast majority of estate plans. Even though it is a mistake to overestimate the role taxation plays in family business planning relative to other planning considerations, tax planning is the focus of this article, in part, because a funny thing happened to the Uniform Limited Partnership Act (2001) (ULPA (2001)) on the way to the forum of this symposium: two events have occurred which potentially change the federal wealth transfer tax. One change was statutory and took place when the Economic Growth and Tax Relief Reconciliation Act (EGTRA) became law in 2001, the same year the Uniform Laws Commission’s two-year drafting project culminated in the “new” promulgation of the limited partnership act. . . .