Why Families Use FLPs
Limited-partner interests carry no control and are not freely marketable, so they are commonly valued at a discount for lack of control and lack of marketability. That discount can shift more wealth to the next generation under the annual gift tax exclusion and the lifetime exemption than an outright transfer of the underlying assets would.
Common Uses in Arizona
FLPs are often used to hold investment real estate, an operating business, a stock portfolio, or family ranch land. The structure also keeps assets pooled for management efficiency and creates a centralized governance framework for family wealth.
For the full Arizona walkthrough of how FLPs fit alongside buy-sell agreements, S-corp restructuring, and the succession of closely held businesses, read our pillar guide: Business Succession Planning in Arizona: The Complete Guide.