Family limited partnerships (known as "FLP"s) are a type of partnership, where family assets are pooled into a family owned business of which family members own shares. FLPs allow for shares to be gifted to family members through the generations, thus they are caommonly utilized to minimize the estate tax and take advantage of gift tax exemptions.
Definition from Nolo’s Plain-English Law Dictionary
A type of partnership comprising only related family members, usually created by parents in order to pass on a family business or investments to their childern. It provides significant federal gift and estate tax benefits because members of a family limited partnership (sometimes referred to as a FLP--pronounced "flip") own shares in the partnership which can be transferred between generations at lower tax rates.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:16 pm