· Minor partners should contribute their own property to the family venture. Use proceeds of prior family gifts.

· The managing member of the Family Limited Partnership should never be the senior generation. However, the senior family member can have some control over governance. In some cases, it’s best to use a corporate managing member not controlled by the senior members.

· Provide for succession of management in the younger generation. The sooner that this is done, the better.

· The senior member of a Family Limited Partnership should never transfer all of his assets. It is, however, a good idea to transfer some assets the require management. The family residence should be left out. The senior member should have a base level of support outside of the FLP.

· Remember to transfer title to the assets!

· Get insurance on the assets - both liability and property damage.

· Never commingle personal and Family Limited Partnership assets.

· Prepare a budget and always use fiscal responsibility.

· All distributions have to follow the operating agreement and be proportional to ownership interests.

· Ensure that the Family Limited Partnership looks like the real entity it is.

· If the assets of the Family Limited Partnership consist of a business interest or sizeable real estate, be careful to clearly define the partnership’s role in the investment. Don’t inadvertently change the character of the investment.

· Ensure that management reports to all members are prepared at least annually.

· Have an annual meeting of Family Limited Partnership members in a place where they can take the time to update on family matters and renew old feuds. In fact, members can bring their professional advisors if they so desire. Take minutes of the meeting. The meeting is deductible to the Family Limited Partnership.

If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office.