Who Should Own the FLP
Once the decision is made that the FLP is appropriate in your situation, the next issue to resolve is who should own the interests in the FLP? As we will see in the next chapter, LLC law is similar in many respects so this discussion will apply to LLCs as well.
Assume we have created a Family Limited Partnership. Husband and Wife fund it with property worth $1 million. Husband and Wife, or an entity which they control, is the general partner, holding a 2 percent interest. Who should own the 98 percent limited partnership interests? Let’s briefly consider the merits of some popular strategies, and we will analyze the best of these options in greater detail in chapter 7.