Family Limited Partnership

Family Limited Partnership

by Richard C. Wilson & Family Offices Group Association Team

Family Office Definition: Family Limited Partnership

Family Limited Partnership definition:  The family limited partnership is a legal entity with general partners and limited partners. A family limited partnership is similar to a limited liability company (LLC). Investment or business assets are held by the family limited partnership for management.  Family members own shares of the partnership and can transition wealth between generations by gifting or transferring shares. The general partners (usually the parents) have the most control but also fully bear the liabilities, while limited partners (usually the next generation) have little control and are not responsible for liabilities. Family limited partnership shares owned by the deceased are included in the taxable estate; however shares are generally discounted in value because of their illiquid nature.  The discounted valuation reduces the size of the taxable estate and transfer taxes due when gifting or bequething shares to heirs.  Generation skipping transfer taxes may apply when shares are transferred to a skip generation. Shareholders must also pay income taxes on their portion of partnership income.

Download our free Family Office Report to learn more about the family office industry.

Read more Family Office Definitions

Tags: What is family limited partnership?, family limited partnership definition, family limited partnership family office, family limited partnership term, define family limited partnership, family limited partnership wealth management, family limited partnership multi-family office, family limited partnership single family office

Leave Your Response

* Name, Email, Comment are Required

We run the Family Offices Group, the #1 largest family office association with 84,000+ global members. We offer live events, a bestselling book, Webinars, a family office database, and a family office training & certificate program called the Qualified Family Office Professional (QFOP). To get to know us please watch this 2 minute video, and contact us any time during pacific business hours by calling (212) 729-5067 or emailing us at

Free Family Office Report (PDF)

Contact Details for 1,000 Family Offices in Excel