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Online Asset Protection Quiz.

Are there other ways to maximize one's limited partnership protection?

You can use a number of different strategies to bolster your limited partnership protection. For example, your limited partnership agreement might: 1) give the general partners full discretion to withhold profit distributions; 2) the partnership agreement can specifically restrict the transfer of a limited partnership interest without the consent of the general partner, and/or all or a majority of the limited partners; 3) the agreement may further prevent a limited partner from withdrawing capital contributions without unanimous partner consent; 4) the agreement may also specify that a creditor of a limited partner becomes only an assignee of the limited partner's interest and acquires absolutely no partnership rights other than rights to distributions; 5) the limited partnership agreement can further allow the general partner to 'assess' the limited partners for further contributions. This obligation should expressly extend to charging order creditors; 6) 'high-risk' family members might own a smaller partnership interest or be entitled to a proportionately smaller share of the income; 7) spouses may title their limited partnership interests as tenants-by-the-entirety – if their state creditor protects this tenancy type. This protects the partnership interest from creditor claims against one spouse; 8) finally, if you do invest in a non-controlled limited partnership or limited liability company, you may title your ownership interest to a family limited partnership that you do control. A well-drafted limited partnership agreement can create a formidable creditor barrier. An asset protection attorney would know how to optimize the protection available from a limited partnership. As a final protective measure, you can encumber or lien your partnership interest or its underlying assets so the secured creditor has first claim to profit distributions before the charging order creditor.

Categories: Asset Protection
The Presser Law Firm, P.A. - Asset Protection Attorney
Located at 6199 N. Federal Highway Boca Raton, FL 33487. View Map
Phone: (561) 953-1050