Can be written in a wide variety of ways. Care must be taken regarding income tax consequences. Estate plans often contain trusts for contingencies, such as the possibility of a child dying before his trust terminates, leaving behind young grandchildren. It can ensure proper management of a large estate spread among many family members. General partners control the partnership.
Limited partners have virtually no voice in the management of the partnership.
Limited partners often have no guaranteed rights to distributions from the partnership, but may incur annual income tax liability as a result of the partnership's business activities. Further, limited partners are often prohibited from selling their partnership interest to anyone other than a family member, thus keeping the business in the family. Restrictions such as these, while necessary to meet the family's objectives, render a limited partnership interest somewhat unmarketable which severely depresses it's fair market value. Depressed market value means a smaller estate for the IRS to tax. FLPs carry significant consequences to the family, and should be tailored to the family's needs.