Overview of Family Limited Partnerships
More people are forming limited partnerships (LP) to shelter their wealth. This is for several good reasons. The limited partnership allows them continued control over their assets. It protects their wealth from lawsuits and creditors. It also can reduce gift and estate taxes. Few legal entities can match the limited partnership's many advantages as a wealth protector.
The limited partnership (sometimes called the family limited partnership or FLP), is not a new entity. The limited partnership's long tradition for asset protection, tax and estate planning began in 1916 with the Uniform Limited Partnership Act. Its long history has proven the limited partnership's stability, predictability and dependability for wealth preservation.
We organize hundreds of family limited partnerships each year, and have yet to have a limited partnership fail to protect a client's assets. That's a strong endorsement for the limited partnership.
To lawsuit-proof your personal assets, you have a choice of entities. Each type of entity has its own characteristics and features. Selecting the best entity in your circumstances involves many considerations.
The range of choices also depends greatly upon the entities intended purpose. For instance, if the limited partnership is to conduct an active business, you must evaluate it against the sole proprietorship, limited liability company and corporation. If your goal is tax reduction, estate planning or asset protection, then we would weigh the limited partnership against different trusts, limited liability companies and alternative methods to safely title assets. Alternative entities are sometimes preferable to the limited partnership. Consider every factor when you evaluate each entity.
YES, YOU CAN LOSE EVERYTHING!
You may think that your wealth is safe and that you don't need protection. But don't delude yourself and accept reality —
for every 60 minutes you spend making money, spend 60 seconds thinking about how to protect it!