MLPs: The Latest TrendsMLPs: The Latest Trends

Mary S. Lyman

Over the past few years, financial advisors, estate planners and investors seeking a source of regular income have become increasingly aware of the benefits of master limited partnerships (MLPs). MLPs are limited partnerships that are traded on exchanges similar to corporate stock, that is, limited partnerships that are publicly traded. They are becoming widely known as an investment that can offer tax advantages as well as offset price risk through a high yield provided by quarterly cash distributions.

MLPs, however, have faced some challenges in attracting investors. First, they're a small and, until recently, relatively unknown, sector of the market. Second, they bring with them a level of tax complexity that many investor...