Family Limited Partnerships are often used to protect real estate or shares of a business. It' essentially just a partnership limited to family members.
However, the rules are usually determined by state law, and the shares could be attacked, or inherited, or lost to a judgment, or to a divorce settlement. You may end up being a partner with an ex-spouse that is conflicting and disagreeable.
Keep Finances Separate - All financial accounts for the partnership should be separate and apart from those of the individual members. Keep good records.
Use the Family Limited Partnership formally - Members should expressly refer to the Family Limited Partnership in all dealings with third parties so it is understood they are dealing with the Family Limited Partnership, not with the members in their individual capacities.
Remember that Family Limited Partnership may be treated differently in states where you actually reside or own property. That could mean conflicting laws or interpretations. Some states may require registration or taxes that you may not be aware of.
Trusts May be Much Better
A Private Asset Trust may be easier, safer, more consistent with your purposes, and be governed by fewer restrictions and rules. Often, a trust performs the same function as a partnership, whether it is a Family Limited Partnership, General Partnership, regular Limited Partnership or a business that could be shared or eventually sold.
Keep the partners happy. Submit annual reports - Keep disclosures accurate. Maintain changes and minutes in records. Act like a business. Include tax reports and pay taxes.
Follow the Laws - Follow the Rules. Although Family Limited Partnerships do not have the same requirements as corporations, there are some rules that must be followed to remain and protect partnership status.
Also, consider a Private Asset Trust and compare benefits, protection, legality, costs, and privacy.