Family limited partnership

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This section discusses lawsuit protection using family limited partnership. Family limited partnership is the most effective tool to protect a tax payer 's assets against lawsuit. Family limited partnership is the first line of defense for lawsuit protection. Without a family limited partnership, a tax payer stands to lose everything. A family limited partnership takes about 15 minutes to set up. In California, for example, California family limited partnership is the only way to protect assets.

Section 704 of the US IRC code

The tax laws regarding family limited partnership is found in the Internal Revenue Code (IRC Code) 704. Family limited partnership tax laws have been around since 1916. The previous cases of family limited partnership set precedents for the laws which must be followed in cases concerning family limited partnership. The law says that family limited partnership protects you and your family from lawsuits.

Structure of a family limited partnership

Family limited partnership

General partner or general partners

Limited partner or limited partners

A family limited partnership consists of a general partner or general partners and a limited partner or limited partners. By definition of family limited partnership, general partners have the control of all the running of the family limited partnership and the limited partners have no say in the day to day operation of the family limited partnership.

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