It is frequently used to avoid probate and to provide for the trust maker in the event of incapacitation. A revocable living trust holds title to assets of the trust maker. The parents may have a revocable living trust serve as general partner. Their liability is limited to their investment in the partnership. They also have unlimited liability for partnership debts.Ĭhildren typically hold limited partnership units and have virtually no voice in management. The parents, as general partners, manage partnership assets, collect management fees, and allocate partnership income. An FLP used in estate and financial planning provides flexibility, control, creditor protection, and tax benefits. Typically, the family's older generation members (parents) are general partners and the younger members (adult children) are limited partners. An FLP is a conventional limited partnership-a partnership with at least one general partner and one limited partner-in which the partners are members of the same family. Family Limited Partnerships: For the Next Generation This Planning Tool Can Protect Assets and Keep the Business in Friendly Hands.Ī family limited partnership (FLP) can be a valuable estate and financial planning tool for commercial real estate professionals and their clients.
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