General partners (typically the parents) create the partnership specifically to give limited partner shares to their children or other family members. General partners retain control of the FLP and make day-to-day investment decisions. They can also draw a percentage of the FLP's income in the form of a management fee.
Limited partners (typically children or other family members) have an ownership interest in the FLP. However, they have limited or no control over the partnership's management. They receive a share of net income generated by the FLP based on their ownership percentage. When the FLP dissolves, a proportionate amount of FLP property will pass to each limited partner.
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