Family Limited Partnership and Family Limited Liability Company
A Family Limited Partnership (FLP) or Family Limited Liability Company (FLLC) is a business entity owned and controlled by members of a family. It is a vehicle used to consolidate assets (lowering legal, accounting, and investing costs), provide for creditor and liability protection (especially important when assets include real estate), and also to serve as a means of making gifts to your family members in a leveraged manner. Generally, leverage is obtained because the gifted interests would be non-voting interests that generally have a lower value than voting interests. The gifted interests can be made directly or set aside and held in a trust. In order to be effective, the formalities of the entity must be strictly adhered to.