How is a Family Limited Partnership organized?

A Family Limited Partnerships is established by a general partner or partners having a general partnership interest in a small amount, usually between two and five percent of the value of the partnership. A trust may be the general partner so you can achieve avoidance of probate and reduction of estate taxes on the general partner's interest. The remaining interest in the partnership is held by the limited partners. The general partner may also be a limited partner. In a family setting often the parents will be the general partners and give limited partnership interests to their children or trusts on behalf of their children.