The RMA also offers potentially more secure discounts. As an investment vehicle designed to enhance long-term returns, it has the one thing that the IRS likes to assert many FLPs lack: a bona fide business purpose. Moreover, an RMA is an arm's-length agreement between unrelated parties, unlike most FLPs.

Another advantage of the RMA is its low profile. When a client with partnership interests passes, a box on the federal estate tax return (Form 706, Part 4, Line 10) must be checked yes. That flags the return for audit. But with an RMA, Line 10 is answered no.

Not everyone hails the newbie, however. It has sparked sometimes heated discussions in the law journal Trusts & Estates and among the heady membership of ACTEC, the American College of Trust and Estate Counsel. FLPs clearly still have fans, including T. Randall Grove, who spoke about using them in the current environment at January's Heckerling Institute on Estate Planning.

"My reaction (to IRS victories in FLP cases) is that there has to be a significant and relevant change in the client's circumstances before and after establishing the family entity," says Grove, a shareholder in the law firm Landerholm, Memovich, Lansverk & Whitesides, in Vancouver, Wash. "The state of the (FLP) law is that we have to stay away from plans and transfers that only take on real significance after or upon a person's death."

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