This specialized business structure, recognized within the legal framework of the state, involves a partnership formed among family members. Typically, it comprises general partners who manage the entity and limited partners whose liability is capped. An example involves a family transferring ownership of real estate or a business to this structure, with parents acting as general partners and children as limited partners. This arrangement facilitates asset protection and estate planning within the Lone Star State.
The strategic advantage of utilizing this structure lies in its capacity to consolidate control while simultaneously enabling wealth transfer across generations. Furthermore, it can provide a shield against potential creditors, safeguarding family assets from lawsuits or other financial liabilities. Historically, these partnerships have been favored as tools for preserving family legacies and mitigating estate taxes, although recent changes in federal tax law have somewhat altered their role in pure tax avoidance strategies.
