FAMILY LIMITED PARTNERSHIP

A Family Limited Partnership ("FLP") is a far more flexible vehicle than an irrevocable trust or "C" or "S" corporations, and, may accomplish the best of all worlds. For example, under a properly drafted and structured FLP:

1. Transfers of property to a FLP are tax-neutral in that there is no gain on such transfers, and, the basis is the same as that when the property was held by the donor;

2. The donor, or creator, may serve as a limited partner;

3. Family members can control the FLP and receive annual income distributions;

4. Control is vested entirely in the general partner, which has the sole legal right to make the day-to-day investment and business decisions affecting the partnership;

5. A Limited Liability Company should serve as the general partner;

6. The FLP is not a taxable entity for income tax purposes, thus avoiding the problem of double taxation as is the case with "C" corporations;

7. Limited partners, as such, are not liable for any debts incurred by the FLP;

8. When highly restricted, limited partnership interests are subject to substantial valuation discounts for gift and estate tax purposes;

9. High liability assets and activities can be easily and inexpensively separated from other assets through the utilization of multiple family limited partnerships; and

10. However, only a handful of states actually limit a creditor's remedy solely to a charging order. In most states a judgment creditor may obtain a judicial foreclosure and subsequent sale of the charged partnership interest.

If you are considering a family limited partnership for your business or asset protection endeavors, then call us today for a free consultation to discuss whether a family limited partnership structure is right for you.