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      B.    Family Limited Partnership (FLP)

1.    Primary Features -
    i)provides GP a method of control over gifted assets - partnership interests
    ii)provides very effective insulation of LP interests from outside creditors
    iii)helps reduce patriarch's taxable estate without forfeiting control
    iv)must be a bone-fide business structure/operation with 2/more partners
    v)must maintain an income-generation objective for LPs

2.    Asset Transfers -
    i)most family interests (inc. life insurance) can be held by FLPs
    ii)personal residences and IRAs are not suitable transfers
    iii)personal-service corporate interests (etc.) are prohibited
    iv)outbound income available to GP - salary and partner allocations
    v)outbound performance-based distributions to GP also available

3.    Taxable Events / Benefits -
    i)provides discounts for minority and lack of marketability LP interests
    ii)partnership interests are exchanged for incoming assets - prorata
    iii)transfers of appreciated property can incur capital gains tax2
    iv)can generate income tax deductions - charitable gifts of LP interests
    v)annual exclusion is available for transfers of LP interests to posterity

4.    Management Structures -
    i)centralizes management of family-assets potpourri under GP's control
    ii)GP does not have to adhere to a strict P/I fiduciary standard
    iii)GP essentially determines amounts/frequencies of income distributions
    iv)must fail at least 2 of 4 corporate tests - transferability and perpetuity
    v)other private formal business forms can be a GP and/or a LP

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