This
type of organization considers the transfer of property from the title
of one
or more individuals to that of the family.
I.
Advantages over corporations
1)
Simple agreement, deed of gift.
2)
Eliminate ancillary probates - partnership interest is personal
property.
3)
Donor can retain substantial control over property being given away -
Managing
Partner.
4)
Not taxable entity.
II.
Disadvantages
1)
If underlying asset continues to increase in value, donor is credited
with
appreciation on the returned interest.
2)
Capital in partnership must be a material income - producing factor and
donee
must have considered the real owner otherwise donor taxed.
III.
Donor should not retain control over distributions of income (but can
have
substantial management rights).
IV.
Donee should have the power to participate in management and to receive
income
distributions.