Family Limited Partnership

An FLP is not a special legal category — it is simply a limited partnership whose ownership sits entirely within one family. What makes it distinct is its purpose: families use FLPs to hold shared assets (real estate, securities portfolios, business interests) under one roof, establish clear rules about how assets are managed and transferred, and create a documented ownership structure that can endure across generations.

The governance logic is straightforward. A family-controlled entity — often an LLC — serves as the general partner and retains control over investment decisions and distributions. Family members or trusts hold limited partner interests and participate in economic returns without having day-to-day management rights. This separation can help a family avoid the fragmentation that happens when assets are divided outright among many heirs.

Consider a hypothetical: a three-generation family with farmland, a securities portfolio, and a minority stake in a private company places all three into an FLP. The parents' trust is the GP; the children and grandchildren hold LP interests. Decisions about selling or leasing the farmland run through the GP, keeping management unified. FLPs often appear in discussions of family office legal entities and defining family office purpose. Because FLPs intersect with transfer and tax planning, families must work with qualified attorneys and CPAs before establishing one.