Asset Protection for Florida Business Owners
Florida business owners face significant risks when it comes to asset protection. From lawsuits to creditor claims, unforeseen circumstances can jeopardize hard-earned wealth. One powerful legal tool to safeguard assets is the Asset Management Limited Partnership (AMLP). This structure provides a robust layer of protection against personal and business liabilities while offering estate and tax planning flexibility. Our Tampa asset protection attorneys from MMJ Law are here to help.
What Is an Asset Management Limited Partnership (AMLP)?
An AMLP is a type of limited partnership (LP) designed to protect assets from creditors and legal claims. It consists of:
● General Partners (GPs) – These individuals or entities manage the AMLP and have unlimited liability. Typically, a business owner controls this role through a corporate entity to limit personal exposure.
● Limited Partners (LPs) – These partners contribute capital but do not participate in management, limiting their liability to their investment in the partnership.
By strategically structuring an AMLP, Florida business owners can shield their assets from personal and business creditors while maintaining control over their investments.
Key Benefits of AMLPs for Asset Protection
1. Protection from Lawsuits and Creditors
● In Florida, creditors cannot seize an AMLP’s assets outright. Instead, they can only obtain a charging order, which allows them to collect distributions (if any are made) but does not grant control over the partnership.
● This discourages lawsuits and provides leverage to negotiate settlements on favorable terms.
2. Estate and Succession Planning
● AMLPs facilitate seamless wealth transfer by allowing limited partnership interests to be gifted to heirs or placed into a trust.
● Business owners can retain control as general partners while gradually transferring ownership to family members or successors.
3. Tax Efficiency
● Florida has no state income tax, and an AMLP allows for pass-through taxation, meaning profits and losses flow directly to partners without being taxed at the entity level.
● Business owners can also take advantage of valuation discounts, which reduce estate and gift tax liabilities when transferring partnership interests.
4. Separation of Risky and Safe Assets
● AMLPs allow business owners to segregate high-risk assets (e.g., real estate, equipment) from low-risk assets (e.g., cash, securities, intellectual property).
● This ensures that liability from one asset does not expose the entire estate to legal threats.
How to Set Up an AMLP in Florida
Creating an AMLP requires careful planning and adherence to Florida laws. The process typically includes:
1. Choosing a General Partner – Business owners often use a limited liability company (LLC) or trust to serve as the general partner, minimizing liability exposure.
2. Drafting a Limited Partnership Agreement – This document outlines control, profit distribution, and succession plans to ensure smooth operation and legal compliance.
3. Registering with the Florida Department of State – AMLPs must file the necessary documentation and adhere to Florida partnership laws.
4. Funding the Partnership – Assets such as real estate, business interests, or investments can be transferred into the AMLP.
5. Ongoing Compliance – Business owners must maintain proper records, file annual reports, and follow legal formalities to ensure the AMLP remains protected.
Is an AMLP Right for You?
Florida business owners with significant assets, high-risk professions, or concerns about future lawsuits should consider an AMLP as part of their comprehensive asset protection strategy. Consulting with an experienced Florida estate planning and asset protection attorney can ensure that your AMLP is properly structured and aligned with your financial goals.
Final Thoughts
An AMLP is a powerful legal tool that can shield Florida business owners from creditors, lawsuits, and excessive taxation while ensuring long-term wealth preservation. By implementing the right legal protections, business owners can safeguard their assets and secure their financial legacy.
If you’re interested in setting up an AMLP or exploring other asset protection strategies, contact MMJ Law to speak with a Tampa asset protection lawyer for expert guidance.
