Family Partnership

How is an FLP established?

To establish a Family Limited Partnership (FLP), you, as the senior family members, would transfer property to the partnership in exchange for a small general partnership interest (e.g. 1%) and a very large limited partnership interest (e.g. 97%). Your children would make a contribution in exchange for a 1% general partnership interest.

Typically, you would hold both general and the limited partnership interests as Trustee of your Revocable Trust, although that need not be the case. You would be the managing general partner with sole management control over the partnership. Your retained general partnership interest would allow you to have complete control over the day-to-day investment and management decisions relating to the partnership property. The limited partners and other general partners would not have any voice in the management of the partnership.