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Family Limited Partnerships for Estate Planning in Fair Oaks
A Family Limited Partnership (FLP) can be a practical option for families in Fair Oaks who want to organize ownership of real estate, business interests, or investment assets under a single structure. An FLP permits designated family members to retain centralized management while offering limited ownership interests to other relatives. For many households, this structure supports orderly transfers between generations, clearer decision-making, and greater control over how property is used and distributed. Considering an FLP requires attention to California law, local Fair Oaks considerations, and the family’s long-term objectives for stewardship and succession of assets and holdings.
Before forming an FLP, families should evaluate their current asset mix, family relationships, and goals for liability protection and transfer. Creating an effective FLP involves drafting a partnership agreement that specifies roles, distributions, transfer restrictions, and procedures for resolving disagreements. It also means ensuring compliance with state filing requirements and understanding how valuation and gifting rules affect tax and transfer strategies. Open communication among family members and careful planning help reduce disputes and establish expectations about management, inheritance, and the handling of partnership interests over time in Fair Oaks and throughout California.
Why Family Limited Partnerships Matter in Fair Oaks
Family Limited Partnerships matter because they combine centralized management with ways to transfer ownership interests in an orderly fashion. For families in Fair Oaks, an FLP can protect assets from some outside claims, provide flexible control for designated managers, and create clear rules for how partnership interests move between generations. This structure also helps families formalize expectations about contributions, distributions, and decision-making authority. When designed thoughtfully, an FLP supports long-term family goals by reducing points of conflict and clarifying financial stewardship while aligning management responsibilities with those who will actively oversee the family’s assets.
About LA Estate Plans and Our Approach to FLPs
LA Estate Plans assists families in Fair Oaks with forming Family Limited Partnerships tailored to their circumstances. Our practice focuses on estate planning matters such as wills, trusts, and partnership arrangements, and we guide clients through legal requirements and drafting partnership agreements. We emphasize clear communication, practical planning, and ongoing support so that families understand how an FLP will operate, how it interacts with other estate planning tools, and what operational steps will be needed after formation. Our goal is to help families implement durable, compliant structures that reflect their priorities and provide a path for orderly asset transitions.
Understanding Family Limited Partnerships in Fair Oaks
A Family Limited Partnership is a business entity established to hold and manage family assets under a formal partnership agreement. In an FLP, general partners handle management duties while limited partners hold ownership interests but generally do not participate in daily operations. This separation of roles provides families with a way to concentrate decision-making authority while preserving ownership rights for other relatives. In Fair Oaks, families use FLPs to centralize control of real estate portfolios, family businesses, or investment holdings and to create a framework for transferring interests in a structured, orderly way that reflects the family’s long-term plans.
Forming an FLP involves practical steps such as identifying the assets to contribute, drafting a partnership agreement, and completing required state filings. The partnership agreement is the central document that outlines governance rules, distribution policies, buy-sell mechanics, and procedures for admitting or removing partners. Families must also consider valuation methods for partnership interests when making gifts and the potential tax implications of transfers. Properly structured, an FLP can minimize administrative friction, promote unity around asset management, and provide mechanisms to address future contingencies while complying with California regulations.
Definition and Key Features of a Family Limited Partnership
A Family Limited Partnership is a legal partnership formed primarily to hold family assets and manage them collectively. It typically includes at least one general partner who manages day-to-day affairs and one or more limited partners who hold ownership interests but have limited management authority. The partnership agreement governs how profits, losses, distributions, and transfers are handled. Families choose this arrangement to consolidate assets, set governance rules, and create a vehicle for controlled transfers of interest. In California, understanding the legal and tax consequences of forming an FLP is essential to ensure the partnership performs as intended and aligns with broader estate planning goals.
Essential Components and Formation Steps for an FLP
Key elements of an FLP include the partnership agreement, identification of assets to be contributed, designation of general and limited partners, and filing required documentation with California authorities. The partnership agreement specifies management powers, distribution protocols, valuation methods for transferred interests, and procedures for resolving disputes or transferring ownership. Families should also address tax reporting obligations and consider how gifts of partnership interests will be valued. Building an FLP that functions smoothly requires attention to operational details, clear communication among partners, and a plan for adapting the partnership as family circumstances change.
Glossary: Common FLP Terms and Definitions
Knowing common FLP terms helps families and trustees communicate clearly and make informed decisions. This glossary covers roles, documents, and concepts such as general partner, limited partner, partnership agreement, asset protection, valuation discounts, and transfer restrictions. Becoming familiar with these phrases helps families understand how the entity will function, how decisions are made, and what rights and responsibilities each partner holds. Clear definitions also support drafting precise partnership agreements that reduce ambiguity and help avoid disputes by setting expectations for management, distributions, and the admission of new partners.
General Partner
A general partner in an FLP is the individual or entity responsible for managing the partnership’s operations and making decisions about assets held by the partnership. This role typically includes authority to enter contracts, make distributions, and oversee day-to-day affairs. General partners form the leadership for the partnership and bear greater responsibility for management outcomes. In return for this authority, general partners often retain fiduciary duties to the partnership and, depending on the structure, may face broader liability exposure for partnership obligations under California law.
Partnership Agreement
The partnership agreement is the governing document that sets out how the FLP will operate, including partner roles, voting and decision-making procedures, distribution formulas, transfer restrictions, buy-sell provisions, and methods for resolving disputes. It defines how assets contributed to the partnership are managed and outlines the process for changing partnership membership or amending terms. Because this agreement controls operational and succession mechanics, clear and comprehensive drafting is vital to ensure the FLP functions as intended and reduces the risk of internal conflict among family members.
Limited Partner
A limited partner is a person or entity that holds an ownership interest in the FLP but does not take part in daily management. Limited partners benefit from limited liability, meaning their personal risk is generally capped at the amount of their investment in the partnership. They receive rights to distributions and value appreciation according to the partnership agreement. The limited partner role is commonly used to pass wealth to younger generations while leaving management authority with designated general partners who oversee the partnership’s assets.
Asset Protection
Asset protection within an FLP refers to legal arrangements and structural features that can reduce exposure of family assets to certain external creditor claims or risks. While not an absolute shield, a properly structured partnership with clear transfer and valuation rules can make it more difficult for third parties to reach partnership-owned property. Asset protection strategies often operate in tandem with other estate planning tools to help families in Fair Oaks preserve wealth, clarify ownership, and limit liability exposure when assets are managed collectively under the partnership arrangement.
Comparing Family Limited Partnerships with Other Estate Tools
Families considering estate planning options in Fair Oaks should weigh FLPs against vehicles such as revocable and irrevocable trusts, joint ownership, and direct gifting. Each approach has different implications for control, liability, administration, and taxes. FLPs concentrate management and can provide mechanisms for controlled transfers, but trusts may better address privacy, incapacity planning, or probate avoidance in certain circumstances. Choosing the right tool depends on asset types, family structure, and long-term priorities. A careful comparison illuminates which combination of tools will most effectively protect assets and meet succession goals.
When Simpler Estate Tools May Be Adequate:
Small or Straightforward Estates
For families with modest or uncomplicated assets, simpler arrangements like wills or basic trusts often provide adequate protection and clarity for distribution. These tools require less administrative overhead and can accomplish many core goals, such as naming beneficiaries and appointing fiduciaries. In situations where creditor risk is low and family relationships are uncomplicated, the added complexity of a family partnership may not be necessary. Evaluating the estate’s size and the family’s tolerance for administrative obligations helps determine whether a basic plan will meet needs without the added formality of a partnership structure.
Limited Need for Liability Safeguards
When potential exposure to creditors or legal claims is minimal, families may not require the protective features that an FLP provides. In such cases, straightforward ownership arrangements combined with well-drafted beneficiary designations and basic trust documents can accomplish succession objectives without ongoing partnership management. The decision depends on the family’s assessment of future risks and whether centralized management would actually improve outcomes. If protection needs are low and administration simplicity is a priority, more basic estate tools can be a prudent choice.
When a Comprehensive FLP Strategy Makes Sense:
Complex Family Relationships and Multiple Generations
An FLP often benefits families with multiple generations, blended households, or varied expectations about inheritance and management. The partnership structure provides clear rules for ownership interests, decision-making authority, and transfer restrictions that help prevent conflicts and ambiguity. When many heirs or stakeholders are involved, a comprehensive agreement can allocate responsibilities, set distribution priorities, and define mechanisms for resolving disputes. This can preserve family harmony by aligning governance with the family’s long-term vision for the assets and providing a predictable path for future transitions.
Significant Asset Protection and Succession Needs
Families seeking to protect substantial holdings from external claims or to implement multi-step gifting and valuation strategies may find an FLP more suitable than simpler tools. By centralizing ownership and establishing transfer mechanics, an FLP helps manage exposure and enables planned transfers that align with tax and succession objectives. When assets include business interests or extensive real estate portfolios, the operational clarity and governance provided by an FLP can be invaluable for long-term preservation and orderly transition of wealth across generations.
Advantages of a Thoughtful FLP Strategy
A carefully drafted FLP can enable centralized asset management, clearer succession planning, and mechanisms for transferring ownership in a controlled manner. Families benefit from defined governance, which reduces ambiguity about who makes decisions and how distributions occur. The partnership format can also create opportunities for discounting partnerships interests for valuation purposes, which may support gift and estate planning objectives. When combined with other estate planning tools, an FLP contributes to an integrated plan that addresses management, transfer, and protection goals over the long term.
Beyond management and transfer advantages, an FLP provides a forum for formalizing family policies about asset use, buy-sell terms, and the process for admitting new partners. This clarity helps families minimize misunderstandings and preserves long-term intent for property and business interests. Additionally, centralized oversight improves recordkeeping and decision consistency, which benefits both current managers and future generations. Overall, a comprehensive FLP approach fosters continuity and a shared understanding of how family assets will be stewarded and transferred.
Centralized Management and Decision-Making
Centralized management allows designated partners to coordinate maintenance, investments, and operational decisions without requiring consensus from every owner. This streamlines administration and enables quicker responses to opportunities or risks. Families that use an FLP can assign responsibilities to those best positioned to manage specific assets, while preserving ownership interests for others. That separation of management and ownership supports efficient governance, reduces day-to-day friction, and helps ensure that long-term plans are followed consistently over time.
Tax and Transfer Planning Advantages
An FLP can support tax-aware gifting and transfer strategies that help families move wealth across generations with greater control. Valuation rules for partnership interests sometimes enable families to make transfers with adjustments that reflect limited control and marketability. When aligned with a broader estate plan, these approaches can reduce taxable estate exposure and create orderly gifting paths. Careful planning is necessary to comply with legal requirements and to document the substance of transfers, ensuring that tax benefits are realized and regulatory expectations are met under California and federal rules.
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Professional Tips for Creating a Family Limited Partnership
Clearly Define Roles in the Partnership Agreement
Make sure the partnership agreement clearly describes who manages the partnership, who holds voting rights, and how day-to-day decisions will be made. Ambiguity about authority or duties can lead to disagreements later, so specify responsibilities for routine maintenance, investments, distributions, and dispute resolution. Include procedures for admitting new partners, valuing transferred interests, and handling buyouts to reduce uncertainty. Clear drafting helps preserve family relationships by setting predictable rules and reducing the need for ad hoc decision-making that can create friction among relatives.
Consider Tax Consequences and Valuation
Communicate Openly With Family Members
Open communication is essential to make sure all participating family members understand the purpose, mechanics, and responsibilities of the FLP. Discuss goals for asset management, succession, and distributions before finalizing the partnership agreement so expectations are aligned. Address potential conflicts and establish transparent reporting and regular meetings to maintain trust over time. Providing clear explanations and inviting input reduces surprises later and helps ensure the partnership operates with broad family support, making it easier to implement long-term plans and maintain unity as responsibilities change.
Why Families in Fair Oaks Consider an FLP
Families turn to FLPs when they want centralized management of shared assets and a structured way to transfer interests across generations. An FLP can help organize property holdings, support a family business transition, and provide rules for distributions and decision-making that reduce ambiguity. For households with multiple properties or business interests, the partnership creates a single entity for managing cash flow, maintenance, and investments. This coordination improves recordkeeping and enables families to implement consistent policies about asset use and succession that can be sustained over time.
Another compelling reason to consider an FLP is the desire for more predictable transfers of ownership while retaining day-to-day control with designated managers. By allocating limited partner interests, families can pass value to younger generations while keeping operational authority with trusted individuals. This structure also supports planning around creditor exposure and tax-conscious transfer strategies, when appropriate. Families who value continuity, efficient administration, and formalized governance often find that an FLP aligns well with their long-term objectives and helps avoid ad hoc arrangements that can create friction or uncertainty.
Common Situations Where an FLP Is Useful
Typical situations that lead families to form an FLP include owning multiple pieces of real estate, operating a family business, or wanting to formalize multigenerational wealth transfer plans. When several family members have interests in the same assets, an FLP can centralize governance and set clear expectations for management, distributions, and transfers. It also helps when families want to encourage active management by certain members while giving passive ownership to others. These arrangements prevent informal ad hoc control changes and create a framework for orderly succession and stewardship of family holdings.
Managing Family-Owned Businesses
When a family owns a business, an FLP can provide clarity about who manages operations and how ownership transfers will occur. It allows family managers to make strategic decisions while maintaining an ownership structure that includes passive family investors. The partnership agreement can create buy-sell provisions and valuation rules that ease transitions when leadership changes or when ownership interests are gifted to heirs. This structure supports continuity of business operations and creates a formal mechanism for dealing with changes in ownership while reducing potential disagreements among relatives.
Holding and Protecting Real Estate Portfolios
Families with multiple investment properties or family homes often use an FLP to aggregate ownership and centralize property management. The partnership can address maintenance responsibilities, rental management, and distribution of rental income, while clarifying how properties will be transferred or sold. This arrangement streamlines operational tasks and provides a documented approach for dividing proceeds or admitting new owners. It also creates a vehicle for passing property interests to younger generations without transferring full control of management functions.
Planning for Multigenerational Wealth Transfer
An FLP supports multigenerational planning by creating a structure where ownership interests can be distributed over time while management remains with designated partners. This allows parents or older generations to gift interests gradually while retaining control of assets during their lifetimes. By setting clear terms for valuation and transfer, the partnership helps families avoid probate complications and provides an orderly path for passing value to heirs. The approach helps families preserve legacy assets and implement gifting strategies consistent with broader estate plans.
We Are Here to Support Your FLP Planning
Why Choose LA Estate Plans for FLP Matters
LA Estate Plans focuses on estate planning matters for families in Fair Oaks and throughout California. We provide practical guidance on how an FLP interacts with wills, trusts, and probate avoidance strategies. Our approach emphasizes clear drafting and operational provisions that reflect the family’s goals for asset management and succession. We help clients understand the trade-offs of different structures and design partnership agreements tailored to their needs, so the FLP functions effectively as part of a coordinated estate plan.
We walk families through the formation process from asset selection and valuation to drafting, filing, and implementation. Our services include preparing the partnership agreement, advising on transfer mechanics, and ensuring filings meet California requirements. We also help families think through ongoing administration, reporting, and governance practices to keep the FLP functioning smoothly. The aim is to provide reliable guidance that results in a durable structure aligned with the family’s intentions and operational needs.
Throughout the relationship, we prioritize communication and practical solutions so families feel confident about the partnership’s role in their overall estate plan. We assist with modifications as family circumstances change, help interpret partnership terms, and provide options for dispute resolution when needed. Our goal is to ensure that the FLP remains a workable tool for managing assets and transferring interests over time, supporting the family’s desire for continuity, order, and clarity.
Schedule a Consultation to Discuss an FLP for Your Family
Our Step-by-Step Process for Establishing a Family Limited Partnership
Our process begins with an initial discussion to understand your assets, family dynamics, and objectives for transfer and management. We then evaluate which assets should be contributed to the partnership and outline governance options that match your priorities. Next, we draft a partnership agreement tailored to your needs, including distribution and transfer mechanics, valuation methods, and administrative procedures. Finally, we assist with state filings and provide guidance on operational matters after formation so the partnership functions as intended and adapts to changing family circumstances.
Initial Consultation and Asset Review
The first step is an in-depth consultation to learn about your family’s goals, the assets you wish to include, and any concerns about creditors, taxes, or succession. During this review, we identify the assets best suited for partnership ownership and discuss how management and distributions should work. We also consider valuation methods and gifting strategies that may be relevant. This assessment forms the foundation for designing a partnership agreement that reflects your priorities and fits within California’s legal framework.
Discussing Family Goals and Governance
We spend time understanding your priorities for control, income distributions, and the long-term vision for the assets. This includes who should manage the partnership, who will be passive owners, and how you want transfers to occur over time. Clear decisions about governance help shape the partnership’s structure and reduce ambiguity. We advise on options for decision-making authority, reporting, and regular review processes so the partnership remains aligned with the family’s evolving needs.
Reviewing and Selecting Assets for the Partnership
We evaluate each potential contribution to assess suitability for partnership ownership, including property titles, business interests, and investment accounts. Some assets are better held within separate entities depending on liability, tax, or operational considerations. We also consider whether retaining certain assets outside the FLP better serves your objectives. This analysis ensures that the partnership holds assets that support the family’s goals while minimizing unintended legal or financial complications.
Drafting the Partnership Agreement
Once roles and assets are defined, we draft a comprehensive partnership agreement that addresses management authority, distribution policies, valuation and transfer rules, and processes for dispute resolution. The agreement will specify how partnership interests are transferred or sold, how new partners are admitted, and any restrictions on transfers to third parties. Careful drafting helps prevent misunderstandings and provides a clear roadmap for administration and succession under California law.
Customizing Terms to Reflect Family Preferences
We tailor the agreement to mirror your family’s specific preferences about control, income sharing, and succession timelines. This can involve drafting buy-sell clauses, setting voting thresholds, and defining events that trigger valuation or transfer mechanisms. Custom terms ensure the partnership’s governance aligns with the family’s values and operational needs, making it easier to manage assets over time while protecting the intended distribution of value among beneficiaries.
Ensuring Compliance With California Requirements
The partnership agreement and formation process must satisfy California legal and filing requirements. We incorporate statutory compliance items, ensure appropriate documentation is prepared for state filings, and advise on recordkeeping and reporting practices. Attention to legal formality and documentation reduces the risk of challenges and helps demonstrate that transfers and operations reflect legitimate family and business purposes rather than attempts to evade legal obligations.
Finalizing Formation and Ongoing Administration
After finalizing the agreement, we assist with filing required documentation and advise on operational steps to activate the partnership. This includes executing transfer instruments, updating titles where appropriate, and informing relevant institutions of the new ownership structure. We also discuss ongoing governance routines, such as periodic meetings, financial reporting, and procedures for revisiting terms as family needs change. Ongoing attention helps ensure the FLP continues to serve its intended purpose.
Filing and Document Execution
We prepare and file the necessary paperwork with state agencies to establish the partnership and ensure that ownership records for contributed assets reflect the FLP arrangement. Execution of the partnership agreement and related transfer documents is coordinated to minimize operational disruption. Proper filing and documentation are important to create a clear legal record of the partnership’s formation and the family’s intent for asset management and transfer.
Ongoing Support and Administration
Following formation, families often benefit from guidance on maintaining records, managing distributions, and carrying out governance duties. We advise on practical procedures for meetings, financial reporting, and documentation of transactions that support the partnership’s integrity. Ongoing review ensures the FLP adapts to changes in family circumstances, tax law, or asset composition, preserving the partnership’s effectiveness and helping maintain a smooth transition of responsibilities across generations.
The Proof is in Our Performance
Frequently Asked Questions About Family Limited Partnerships
What is a Family Limited Partnership and how does it work?
A Family Limited Partnership is a legal entity used to hold family assets where management authority and ownership interests are separated among partners. General partners manage operations and make decisions about partnership property, while limited partners hold ownership shares with restricted control. The partnership agreement governs how distributions, transfers, and admissions are handled, providing a structured approach for centralized management and orderly succession. Forming an FLP involves identifying assets to contribute, drafting a comprehensive partnership agreement, and completing necessary state filings. Families often choose this structure to organize assets, formalize governance, and create predictable transfer mechanisms over time. An FLP can be tailored to reflect specific family goals by specifying roles, restrictions on transfers, valuation methods, and dispute resolution procedures so that it functions as intended and supports long-term stewardship of the assets.
Who manages an FLP and what are the roles of partners?
Management of an FLP rests with the general partners, who take responsibility for day-to-day operations, investment decisions, and interactions with third parties. Limited partners are typically passive owners who receive distributions and share in the partnership’s economic results but do not engage in management. The partnership agreement should clearly define the authority of general partners, the consent thresholds for major decisions, and the duties owed among partners. Defining these roles prevents confusion and helps families maintain consistent governance. It also provides clarity about what actions require partner approval versus those that fall within routine management authority, ensuring the partnership operates smoothly and predictably for all involved.
What types of assets can be held in a Family Limited Partnership?
Family Limited Partnerships can hold a variety of assets, including residential and investment real estate, family-run business interests, securities held for investment, and other valuable property that benefits from centralized oversight. Before contributing assets, families should consider title issues, liabilities attached to specific properties, and whether separate entities are advisable for certain holdings. Some assets may have tax or regulatory implications that affect suitability for partnership ownership. The decision about which assets to include depends on management goals, risk considerations, and how the family intends to use the partnership to achieve long-term succession and protection objectives.
How does an FLP affect estate and gift taxes?
An FLP can play a role in tax-aware transfer strategies by creating partnership interests that may be gifted over time. Valuation considerations for limited interests may provide opportunities to transfer value with adjustments reflecting restricted control or liquidity, which can influence gift and estate tax outcomes. However, the tax consequences depend on how transfers are documented and the overall estate plan. Families should coordinate FLP formation with tax planning to ensure gifting strategies, valuations, and recordkeeping meet legal and regulatory expectations. Proper documentation and consistent business purpose for the FLP are important to support tax positions and achieve intended outcomes.
Can forming an FLP protect assets from creditors?
An FLP can offer features that reduce exposure of family-owned assets to certain claims, but it is not an absolute shield against creditors. Structural features such as centralized ownership and transfer restrictions can make it more difficult for third parties to access partnership-owned property depending on the nature of the claim and timing of transfers. The protective value of an FLP depends on proper formation, ongoing compliance, and documentation that demonstrates legitimate family planning intent. Families should avoid transfers intended solely to hinder creditors and should evaluate asset protection as part of a broader plan that considers legal limits and best practices.
How are partnership interests valued when they are gifted?
Valuing partnership interests requires careful consideration of methods that reflect the interest’s rights, restrictions, and marketability. Appraisals commonly account for factors such as limited control, transfer restrictions, and the nature of the underlying assets, which can affect fair market value. Accurate valuation documentation supports gifting strategies and helps avoid disputes later. Families should use consistent valuation methods and keep contemporaneous records of appraisals and the rationale for chosen approaches. Working with qualified valuation professionals can help ensure that values are supported and defensible for tax and estate planning purposes.
What steps are required to form a Family Limited Partnership in California?
Forming an FLP in California involves drafting a partnership agreement that outlines governance and transfer rules, preparing formation documents, and filing necessary paperwork with state authorities. The process also includes identifying assets to contribute, transferring titles where appropriate, and documenting the terms of contributions and distributions. Proper recordkeeping and compliance with state statutes are essential. Families should consider coordination with tax advisors and other planners to align the partnership with broader estate and tax strategies. Ensuring that formation reflects legitimate family purposes helps preserve the partnership’s effectiveness and legal standing.
How does an FLP interact with wills and trusts?
An FLP complements wills and trusts as part of a comprehensive estate plan. While a will or trust addresses how assets pass at death and provides incapacity planning, an FLP governs ownership and management while parties are living. Assets placed in the partnership are controlled by its terms, so coordinating the partnership agreement with beneficiary designations and trust provisions is important to avoid conflicting instructions. Integrating these tools ensures the family’s intentions are carried out consistently across documents, minimizes probate exposure for certain assets, and provides a cohesive approach to succession and administration.
What ongoing responsibilities come with managing an FLP?
Managing an FLP requires ongoing duties such as maintaining accurate records, holding periodic meetings, preparing financial statements, and documenting distributions and transfers. General partners should follow the governance rules set out in the partnership agreement and keep transparent communication with limited partners. Compliance matters include tax filings and ensuring that valuations and transfers are well documented. Regular reviews of the partnership’s structure help address changes in family circumstances or legal developments so the arrangement remains aligned with objectives and continues to function smoothly for current and future generations.
When should a family consider updating or dissolving an FLP?
Families should consider updating or dissolving an FLP when major life events occur, such as births, deaths, marriages, divorces, or significant changes in asset composition. Other reasons to revise the partnership include tax law changes, shifts in family goals, or when the original management structure no longer reflects who should oversee assets. Dissolution may be appropriate if the partnership no longer serves its intended purpose or if the costs of administration outweigh the benefits. Periodic review ensures the partnership remains fit for purpose and that any amendments are properly documented and implemented in accordance with the agreement and applicable law.