Among the benefits are: (1) Centralization of Management – An FLP permits ownership to be fractionalized while management remains centralized. (2) Facilitating Intra-Family Transfers – FLPs can make it easier to transfer interests in family business assets from one family member to another. For example, a parent can transfer a specified percentage of a collection of business assets (in other words, an interest in the FLP) to each child, rather than multiple transfers of specific assets. (3) Discounts -- In many cases, the FLP interests owned or transferred by a family member are valued at less than the underlying assets would be valued if the partnership did not exist, potentially saving transfer taxes. (4) Avoiding and resolving family disputes – FLPS can provide a means to resolve existing a future family disputes and make it more likely to avoid these disputes entirely.

Last updated on January 6, 2011 by Glenn Karisch