Paul Sullivan’s New York Times Wealth Matters column on July 7, 2012 was titled “In an Unusual Tax Year, the Wealthy Turn to Partnerships.” He described how the use of family limited partnerships is typically very limited, but the current tax situation makes them popular right now. Experts caution, however, that using these or similar tools to bind a family together can be a bad idea. As Jason Cain, of the family wealth group at Credit Suisse Private Bank, phrased it: “‘Families should be together because they want to be together, not because Grandpa decided there was going to be a family investment that could be never be liquidated and everyone should stay together.'”
For tax reasons or to promote idealized hopes about family harmony, families often create ties that bind. Frequently, these ties cause pain and conflict. Careful thought should precede creation of these ties. Failing that, families in conflict should try to address disputes sooner rather than later. In either case, facilitated family meetings or family wealth mediation can help.
