Family wealth matters require delicate handling
Family wealth matters require delicate handling and the firm managed everything professionally while being sensitive to personal dynamics that could have complicated legal proceedings unnecessarily.
— Devonte Lewis
View All Reviews
Prior results do not guarantee a similar outcome.

A family limited partnership attorney in Houston, TX forms and structures FLPs that provide asset protection, estate tax reduction, centralized management and efficient wealth transfer. Capstone Legal Strategies guides families in Houston, Katy, Cypress, Sugar Land and Fulshear from entity formation through governing documents. Call 832-446-5660, or explore incapacity planning and our estate planning services.

What Is a Family Limited Partnership?

An FLP is two separately formed entities: a general partner entity and a state-formed limited partnership. The general partner is often an LLC or corporation; limited partners can be individuals, trusts or other businesses. State law, bylaws, a partnership agreement and a shareholder agreement control the operation.

Not all FLPs are created equally. Some practitioners use them strictly for estate planning; we use a form that provides estate planning and asset protection — work that sits where our Houston business law services and estate planning practice meet.

General Partners and Limited Partners

General partner. Usually an LLC or corporation, with shares divided among family members who serve as directors under the bylaws and a shareholder’s agreement. The general partner manages the FLP’s assets but faces unlimited liability — which is why we recommend an entity rather than individuals.

Limited partners. Owners with no management role, receiving distributions at the general partner’s discretion. Their liability is limited to their investment.

Reasons to Form an FLP in Texas

There must be an actual business associated with the FLP, and partnership assets should not fund personal expenses — owning stocks, LLC interests or real estate qualifies.

Reduced Taxes

Using federal gift tax exclusions and valuation discounts, heirs can reduce the tax burden on transfers of limited partnership interests. FLPs pay no federal income tax — partners report income on personal returns.

Asset Protection

Assets transferred to the FLP become partnership property rather than personal assets, protecting against creditor claims. Proper structuring is essential.

Maintaining Control

General partners retain control through a shareholder agreement and proxy voting, setting rules on transferring interests, the timing of distributions and asset use — including what happens to an interest on divorce, death or withdrawal.

Succession Planning

An FLP supports gradual transfer of assets to younger generations while senior members retain control, and teaches them how to manage family wealth.

Drafting the Governing Documents

A comprehensive partnership agreement, bylaws and shareholder agreement are critical so everyone understands the rights and duties the FLP creates, and formation documents must be filed with the state. Our contract drafting attorney prepares them. Asset transfers then begin through deeds, assignments and new accounts. The partnership runs for a set duration, usually 50 years.

How Our Houston Estate Planning Attorney Helps

  • Reviewing your business and assets to determine how best to structure the partnership
  • Explaining the benefits of FLPs and the laws that govern them
  • Helping partners understand their rights and obligations
  • Drafting and executing the partnership agreement, bylaws and shareholder agreement
  • Answering questions as you begin operating under the FLP

Anthony Choueifati regularly represents high-net-worth individuals in structuring operating business entities, family limited partnerships and 501(c)(3) family foundations. Many families pair an FLP with incapacity planning. Learn more about our attorney, or contact our Houston office.

Contact Our Houston Family Limited Partnership Attorney

Capstone Legal Strategies is ready to help you get started with your family limited partnership. We are trusted estate planners and business lawyers who understand how these practice areas intersect to help families protect what matters most to them. To learn more or to schedule your initial consultation, give our office a call today.

Capstone Legal Strategies is proud to offer trusted legal services for businesses and individuals in Houston and the surrounding Katy, Sugar Land, Cypress, Pearland, and Pasadena areas.