04/29/2026
A family limited partnership, or FLP, can be a powerful estate planning tool—but it is not just for families who own a business.
3 Things to Know:
1. An FLP can help transfer wealth while preserving control
With an FLP, assets such as a family business, real estate, investments, or other property can be placed into a partnership. The senior generation may retain management control as general partners while gradually transferring limited partnership interests to children or other family members.
2. It may reduce the size of a taxable estate
Transferring FLP interests can remove the value of the underlying assets from a taxable estate. Because limited partnership interests typically have restricted control and limited marketability, they may also qualify for valuation discounts for gift tax purposes.
3. It requires careful structure and ongoing oversight
An FLP must be properly established, operated, and maintained. Legal and tax expertise, administrative oversight, and adherence to partnership formalities are essential—especially if the strategy is ever reviewed by the IRS.
Why this matters:
An FLP can support wealth transfer, potential tax planning, income shifting, and asset protection goals. But the benefits depend heavily on how the partnership is structured and maintained.
Estate planning strategies should not be selected in isolation. They should be coordinated with your broader family, tax, and legacy goals.
→ Read the full perspective: https://www.lptrust.com/blog/how-can-an-family-limited-partnership-fit-into-your-overall-estate-planning-strategy/
