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Fair Market Value Back to Top

The price at which an item can be sold at the present time between two unrelated people, neither under compulsion to buy or sell. Where a gift is made of an interest in an LLC, it must be valued at its fair market value. This may, however, be permitted to reflect a minority (lack of control) or lack of marketability discount.

Family Limited Partnership Back to Top

A limited partnership owned by family members is referred to as a family limited partnership or "FLP". A limited partnership has two types of partners, a general partner, and a limited partner. The general partner manages the partnership and is liable for all business affairs. Limited partners are not generally liable for partnership debts but cannot participate in management. Family LPs are used for a range of matters, including owning and operating a family business or investment. An advantage of FLPs is that a parent can serve as general partner and control all business matters (subject of course to his or her fiduciary responsibilities). FLPs have been used by many to secure discounts on valuation of FLP interests for gift and estate tax purposes.

Family Partnership Back to Top

A partnership owned by members of the same family for purposes of transferring some of the value of the business or real estate or securities to the younger generation and possibly involving them in the management of the business as well. Check with your tax advisor and obtain a written appraisal from a certified appraiser if you will clain discounts on gifts.

Fiduciaries Back to Top

Fiduciaries are persons in a position of trust such as the executor (personal administrator) of your will, a trustee under a trust agreement, an agent under a financial power of attorney, or a health care agent under a medical proxy. The generic term for people serving in these important and trusted positions are "fiduciaries".

FLP Back to Top

An "FLP" is an acronym for family limited partnership. It is a limited partnership the primary partners of which are family members.

Forgery Back to Top

A forgery is a fabrication, a substitution of the false for the genuine, done with the intent of deceiving another. For example, your sibling imitated your mother's signature on a will that he wrote bequeathing all of your mother's assets to him. The will is a forgery.

Franchise Back to Top

A franchise is a legal arrangement whereby a company grants you the right or privilege to use their product, service or trade name. The company offering you these rights is called the Franchisor and you would be referred to as the franchisee. Great care must be exercised in reviewing and analyzing a franchise agreement. You should have an accountant or industry consultant (or both) review and analyze the economics of the transaction, you should have a lawyer review completely all aspects of the transaction before investing.

Fraud Back to Top

Fraud is the intentional distortion of the truth undertaken to induce someone to rely on the distortion to their detriment. To prove fraud you must demonstrate that the person you are suing for fraud made a false representation to you of facts, you relied on those facts, you incurred a loss or damage as a result of relying on those false representations.

Full Disclosure Back to Top

Full disclosure can be used in many legal contexts. If a fiduciary (e.g. a trustee of a trust or a director of a corporation) are entering into a business transaction with the entity for which they are a fiduciary they should provide full disclosure (all relevant details) of the transaction to the corporation, trust, etc.