Family limited partnerships (FLPs) are an excellent estate-planning tool for affluent persons who want to bequeath sizable gifts to family members, although they do come with caveats. FLPs are a good option for the rich because the client is permitted to contribute assets to a partnership in exchange for both general and limited partnership interests, and they allow the donor to discount the value of the gifts to the recipient that may not be discountable outright. The only time FLPs become problematic is when they do not meet certain criteria. Often, the expense for FLPs exceeds the benefits. FLPs usually come with an array of fees ranging anywhere from $2,000 to $10,000. Other costs include annual expenses for maintaining the partnership, and, depending on the assets being transferred, transfer taxes to cover the expense of transferring the asset from the general partners to the FLP. Adding to the list of drawbacks is the fact that there is no step-up in basis for assets in the partnership at the time of the general partner's death. In conclusion, FLPs are useful if the donor wants leverage for significant current and/or future gifts; wants control of the gifted assets after the gift is made; wants flexibility to adapt to changes in the future; wants protection of the gift from creditors; can find the appropriate law firm to draft and help implement the FLP; is willing to incur business valuation fees; is willing to pay the set-up and maintenance costs; will listen to the attorney setting up the FLP to avoid all the tax traps; and has taken into account the cost of any transfer taxes or loss of step-up in basis.