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- Family Limited Partnership
A Family Limited Partnership is a business that is established and controlled by members of a family. In a Family Limited Partnership, there are typically two types of partners—limited and general. Appropriately named, limited partners have limited liability and cannot manage the partnership. General partners, on the other hand, bear full liability and handle management and investment decisions. A Family Limited Partnership is not taxable. Rather, the owners list the partnership’s deductions and income on their personal tax filings, in proportion to their interests.
If you are interested in setting up a Family Limited Partnership, it’s advisable to contact an asset protection lawyer. To speak with a lawyer experienced in asset protection planning, complete the free case review form on the right for a no obligation legal consultation.
Generally, a Family Limited Partnership allows parents or grandparents to contribute assets. In return, they will receive a large limited partner interest and small general partner interest. Then, these family members can provide their children and grandchildren with all or a portion of the limited partner interest. This interest can be placed in a trust or be distributed to the heir directly. By setting up a Family Limited Partnership, senior family members can begin to transfer their money to their children, while protecting their assets. There are many advantages to a Family Limited Partnership. It can help reduce taxes, ensure family business succession and offer flexibility and protection from creditors. A Family Limited Partnership can also protect assets from spouses of failed marriages.
Family Limited Partnerships have become increasingly popular, although they have been a helpful asset protection tool for several decades. If you are interested in establishing a Family Limited Partnership, complete the free case review form on the right to speak with an asset protection attorney.