ue of the contributed assets is not frozen, but rather the contributor's share in the growth of that value is capped at the fixed rate of return on the Preferred Units. Preferred equity freezes are attractive to senior generations who want to retain a substantial economic interest in the contributed assets, but wa

eze Entity will generally cause a taxable exchange unless the distributed property was originally contributed to the Freeze Entity by the holder of the Preferred Units. If the distributed property is an interest in another entity, the exception for distributions of previously contributed property does not apply to

% economic interest - Preferred Units provide a fixed, cumulative annual return to senior family members equal to the annual preferred payment on the Preferred Units (can be deferred for 4 years) and a fixed value on liquidation. Preferred Units provide greater security but limit participation in appreciation of