For most families, the Family Limited Partnership (FLP) is a vital part of any asset protection plan. It is especially useful for reducing income and estate taxes for individual members, as well as protecting family wealth and estate privacy. But what makes it popular these days is how it allows complete control over family assets while protecting it from unfair claims and lawsuits. Read on to find out why.

What is an FLP?

An FLP is a type of limited partnership designed to protect individual and family assets. It consists of at least one general partner and one limited partner, each playing its own role. The general partner manages all the business affairs of the partnership and directly influences business decisions. He also has control over the assets of the partnership. The limited partner is more like a stockholder – he can invest in the company and earn income from it, but his control is limited to voting on certain corporate matters.

How can an FLP protect family assets?

A family can use an FLP to hold personal assets and protect them from liabilities, especially in case of a lawsuit. By placing individual assets in the name of the partnership, one can get rid of personal liabilities while still enjoying full control of the asset. This way, even when they face lawsuits outside of the partnership’s affairs, creditors cannot claim their assets or gain any control over the company.
This is made possible by the Uniform Partnership Act. The law is based on the principle that a partner should not have to pay for the debt of another. Under the Act, creditors of an individual partner cannot access the assets of the partnership to pay off individual debts. Since the asset is legally owned by the partnership, it is safely out of reach of the creditor.

For Free Consultation call us Toll-Free at 1-800-608-2462 or contact us by email at