What are the advantages of Family Limited Partnership gift giving?

Under present gift tax law you may give $12,000 worth of assets to as many individuals as you choose in any calendar year without incurring any gift tax liability or even having to file a gift tax return. This amount will soon, according to recent tax law be adjusted upward for inflation. However, by giving to children or grandchildren or trusts on their behalf for example, interests in a family limited partnership, you are able to give thirty to thirty-five percent more assets without having to pay a gift tax. The reason for this is that the IRS discounts the value of a gift of a family limited partnership interest because of restrictions on the control and marketability of the interests of limited partners. In addition even though you give away interests in your family limited partnership, you still, as general partner, control the assets and determine when distributions will be made. Additionally if you fund a family limited partnership with appreciating assets you are able to take a significant portion of the value and any appreciation in value of those assets out of your estate for estate tax purposes.