Part Three

If required by the Family Limited Partnership agreement, make certain that the general partner provides appropriate Family Limited Partnership financial information to the limited partners, such as a Family Limited Partnership balance sheet, profit and loss statement for the Family Limited Partnership, federal and state tax returns and so on, as may be reasonably necessary for the limited partners to be advised of the financial status and result of operations of the Family Limited Partnership. Limited partners may have reduced decision-making capacity regarding the Family Limited Partnership; however, they are entitled to be kept informed of operations and maintenance of the Family Limited Partnership.

Members of the Family Limited Partnership should be advised to retain a portion of their assets outside of the partnership (i.e., in their revocable trusts and/or individual accounts). These isolated assets should be used for their daily maintenance, expenses, gift giving, etc.

Be sure that the Family Limited Partnership is respected as a true business entity. Should the Family Limited Partnership take on business transactions, all parties, including family members, to such transactions are required to abide by the appropriate transaction terms as verified in contracts, notes, etc. For instance, interest payments and/or principal on a note should be paid when due and, if not, appropriate interest and/or penalties should be calculated and collected

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