161 Fox Den Circle
Naples, FL 34104
phone: 239-262-4332
toll free: 877-362-7526
fax: 239-262-7454
contact@dohertypa.com


For more than 30 years, the Doherty Professional Association has provided some of the most successful and prestigious families, businesses and charitable organizations in the United States with intelligent, effective, representation in estate and financial planning, tax law, elder law and business matters.
Brian Doherty, J.D., LL.M., ,® is widely recognized for his responsiveness to client needs, for his professionalism in handling complex estate planning matters, and for his results-oriented approach in helping clients solve legal and financial problems.
We invite you to learn more about the Doherty Professional Association and Mr. Doherty by reviewing the information provided on this Web site. Then contact our office to schedule a consultation. You will soon learn why so many clients have trusted their estate planning and financial matters to the Doherty Professional Association.
Estate Planning Attorney in Naples, Bonita Springs and Fort Myers, Florida
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Brian Doherty, J.D., LL.M., ,®, an attorney and financial planner, is a leading estate planning lawyer in Naples, Florida. Mr. Doherty has more than thirty years experience with estates of all sizes and complexities. In contrast with large law firms, the Naples, Bonita Springs and Fort Myers estate planning advice you get from Attorney Brian Doherty is client focused and personalized. You will work directly with Mr. Doherty on your specific needs and concerns. He recognizes that estate planning is not a one-size-fits-all undertaking, so the particular estate planning strategies recommended vary greatly from client to client. This approach to client service has made Brian Doherty one of Naples, Florida’s leading estate planning lawyers throughout Southwestern Florida.
Financial Planning Attorney in Naples, Bonita Springs and Fort Myers, Florida
Brian Doherty, J.D., LL.M., ,® is an attorney AND a financial planner. He also holds a Masters Degree in Taxation from Boston University Law School. This unique blend of credentials is your assurance that he possesses the particular insight necessary for the most advantageous evaluation of your financial planning problems and concerns. His client oriented approach to financial planning problem solving has made him one of Naples, Florida’s leading financial planning lawyers providing client oriented services throughout Southwestern Florida.
Tax Attorney in Naples, Bonita Springs and Fort Myers, Florida
Brian Doherty, J.D., LL.M., ,® has earned a Masters Degree in Taxation from Boston University Law School’s Graduate Tax Program. This prestigious credential means that he is a Naples, Florida lawyer providing sophisticated tax services to his clients throughout Southwestern Florida. Mr. Doherty offers planning expertise, as well as legal representation before the Internal Revenue Service and in the United States Tax Court in Naples, Bonita Springs and Fort Myers.
Securities Attorney in Naples, Bonita Springs and Fort Myers, Florida
Brian Doherty’s work in financial planning involves evaluation of investments and other financial strategies. If you have lost money through bad advice, you may need a securities lawyer in Naples, Florida. Mr. Doherty’s legal and financial planning backgrounds make him eminently qualified to handle your case in Naples, Bonita Springs and Fort Myers.
Estate and Financial planning Workshops in Naples, Bonita Springs, Fort Myers, Florida, and Aboard Cruise Ships Around the World!
Mr. Doherty has been sharing his legal and financial planning expertise with the public for many years as a lecturer and host of a Southwestern Florida radio program. He is available to conduct private workshops for your business or family addressing specific needs and concerns. Two of his most well known presentations are now available for a very modest charge. These talks will allow you to gain invaluable information about estate and financial planning matters, and how to improve your legal and financial future.
Click: On DVD from Seminars on the navigation bar at the left side of this page to see a portion of presentations as well as commentary from actual participants in these groups. Then Click On the Purchase Now link to order your copies of these exciting presentations!!
Areas of Legal and Financial Practice in Naples, Bonita Springs and Fort Myers, Florida
Brian Doherty, J.D., LL.M., ,®, Attorney and financial planner from his office in Naples, Florida, focuses his practice on:
| Estate Planning: | Financial Planning: | Elder Law: | ||
| Wills and Trusts | Fee Based Financial Planning | Medicaid Eligibility Planning | ||
| Charitable Planning and Giving | Retirement Planning | Guardianship Proceedings | ||
| Probate Administration | Asset Allocation | Miller Trusts | ||
| Probate Litigation | Investment Planning | Enhanced Life Estates | ||
| Charitable Remainder Trusts | Insurance Consultation and Planning | Nursing Home Abuse | ||
| Tax Matters: | Securities Litigation: | |||
| Business Entity Selection | Evaluation of Claims | |||
| Review and Preparation of Contracts | Arbitration Proceedings | |||
| IRS Audit Representation | Securities Lawsuits | |||
| Tax Court Practice | Settlement of Claims |
This ALERT is captioned “revisiting” because I have previously offered some observations about these interesting estate planning tools about 18 months ago. If you missed that article and would be interested in reviewing it, just shoot me an e-mail and I will forward to your inbox ASAP.
A number of years ago, an enterprising estate planner postulated that the value of an asset could be diminished if the ownership of the asset was broken into component parts. The inspiration for this “revelation” was the situation that arises in closely held corporations, when two stockholders are involved in the business, but one of their positions is greatly diminished if he lacks control of the business. For example, if a corporation was worth $1,000,000 and there were two, 50-50, shareholders, each with the same rights to manage the business, each person’s interest would be worth $500,000. But, if one of them owned just one percent more, so that the ownership percentage was 51-49, the person with the 51 percent interest would control the business and would have the right to make all management decisions. Theoretically, the 49 percent shareholder’s interest should be worth $490,000, but the real world market place tells us that it is not, because of the inability of the minority shareholder to make management decisions. Therefore, whatever the minority shareholder gets for that 49 percent interest is a “discounted amount” reflecting the lack of control of the business. For purposes of this hypothetical, say a third party would pay $300,000 for that 49 percent minority interest. The difference between the theoretical value of that interest ($490,000) and the amount for which it sold ($300,000) is $190,000. That sum is the amount placed on the lack of control in the management affairs of the business because it represents a minority position in the company.
Keep in mind that when one dies, governmental entities collecting taxes on the transfer of wealth want to know the total value of the decedent’s assets. So, this approach can be very valuable in family estate planning. Assume in the above hypothetical that the “majority owner” is the husband, and the “minority owner” is the wife. Does the discounted value have any real practical effect? No, but for purposes of wealth transfer taxation it has a very real effect, as the value of each spouse’s interest together totals $810,000 – not $1,000,000. Presto! The asset’s value for estate tax purposes has been discounted by $190,000.
The enterprising estate planner argued that, due to lack of control, the ownership of almost asset could be fractionalized in a way that the sum of the components of an asset would be worth less than the total asset. The ownership vehicle of choice that emerged to implement this strategy was the limited partnership; but as the above example illustrates, this technique can be utilized with corporations, as well as limited liability companies. The Family Limited Partnership (FLP) became the hottest technique in estate planning. Additional theories of discounting emerged, with the leading one being a discount for lack of marketability.
The standard (if such an animal exists) structure of a Family Limited Partnership formulated for estate planning purposes works like this: A parent sets up the FLP, transfers assets to it (publically traded securities, or real estate, or an interest in a closely held corporation) and retains the general partnership interest, which includes the right to manage and control the assets. Various limited partnership interest are created which are either given to other family members at once (spouse); over time (children utilizing annual gift exclusions); or sold (spouse, children or others). The FLP operating document prohibits the owners of the limited partnerships interest from managing or otherwise controlling the assets of the partnership, so the value of those interests is heavily discounted for gift and estate tax purposes.
As one might guess, the Internal Revenue Service went ballistic when this estate planning device started to become utilized and contested its use at just about every turn. The arguments against them were primarily twofold:
That agency’s first argument was that the entire FLP was nothing but a tax-avoidance sham, so it would be disallowed for estate and gift tax valuation purposes. The IRS had success with this argument in cases in which the FLP was set up shortly before the taxpayer’s death, because it was able to argue that the FLP had no business purpose (no purpose really) other than to minimize the size of the decedent’s estate for estate tax purposes.
The other argument the IRS advanced in the “early days” of contest over FLPs was that in a FLP where the general partner has the right to control distributions to the limited partners (a typical FLP provision), then gifts of limited partnership interests were really gifts of future interests. Stated “in English,” what the IRS argued was that a limited partner had no real interest in the entity until the general partner died, that death triggering the distributions to the limited partners. Under the gift tax law, in order for a gift to qualify for the annual gift tax exclusion (currently $13,000 per year), the transaction has to involve the gift of a present interest. Accordingly, the establishment of interests in a FLP by gift often did not qualify and were void, or so argued the IRS. This argument was successful in cases in which the FLP document was very draconian. But if the FLP document provided for at least the possibility of management changes and different distribution schemes (even if the family never planned to implement them), the IRS lost the argument.
Today, with proper planning, a Family Limited Partnership can be used to achieve significant transfer tax savings. With properly drafted documents, the IRS now routinely accepts valuation discounts for lack of control and for lack of marketability. However, the points of which you MUST be mindful include:
In summary, the Family Limited Partnership as an estate planning tool can be dramatically effective. But it also illustrates yet another area in which it is so important to get good, competent, advice. This is an exceptionally complex area, and certainly not one you should attempt to navigate on your own.
Work with a competent professional!!
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