Improperly structured carried interest transfer planning may result in adverse gift tax consequences under Section 2701 of the Internal Revenue Code. Section 2701 is part of Chapter 14, which was enacted to address “estate freezes,” which the IRS views as manipulative valuation techniques connected with transfers of partial interests in property or when the transferor retains an interest in the same property. Strafford CLE Webinars recently hosted a program that featured Holland & Knight partner Brent Berselli to help PE fund principals mitigate tax risks from transferring carried interest. This second article in a two-part series outlines the merits and risks associated with different approaches to transferring carried interest to family members, including through the vertical slice exemption. The first article addressed features to optimize in PE funds and interests therein for estate-planning purposes, as well as relevant transfer taxes to navigate and trust structures that can be used to minimize the cost of gifts. See “Tax Issues and Estate-Planning Obstacles Associated With Transferring Carried Interest in PE Funds (Part One of Three)” (Jan. 14, 2020).