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Abstract

I. Limited Partnerships: Estate Planning Vehicle for the Family Farm

II. Freezing the Size of the Estate … A. Corporate Recapitalizations … B. Limited Partnership Units … 1. Creating the Partnership Units … 2. Providing Retirement Income for the Parents … a. Parents’ Retention of All the Frozen Units … b. Frozen Units Held by Children as Well as by Parents … (1) Guaranteed Payment to the Parents … (2) Consultant’s Fees … (3) Lease Agreement with the Parents … (4) Installment Purchase of Parents’ Partnership Units … C. Formation of the Partnership … 1. Liabilities in Excess of Basis … 2. Contribution of Spouse

III. Transfer of Ownership … A. Making Gifts of Partnership Units … 1. Valuation of Gifts … 2. Taking Advantage of the $3,000 Annual Exclusion … 3. Mechanics of Transfer … B. Transfer of Ownership to Successor Operator … 1. Gift or Income … 2. Buy-Sell Agreements

IV. Management Control … A. Selecting the General Partner … B. The Problem of Control … 1. Parental Control and Limited Liability … 2. Parental Control: Estate Tax Consequences … C. Dissolution of the Limited Partnership … 1. Death or Bankruptcy of a General Partner … 2. Ability of the Limited Partners to Force Dissolution

V. Conclusion

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