Ellis and Sandra an elderly couple come to you for some tax planning advice. Thet have $7,000,000 in cash assets and 4 children, 12 grandchildren and 24 great-grandchildren. They want to establish a device that will hold their assets for the benefits of their children. "For estate tax planning reasons that I do not want to worry about or consider in this assignment." They want to set up a trust or company that will manage their $7,00,000. They want the ownership if the assets to be divided among all of their descendants. Essentially they will put all of the money into an entity and the ownership if the entity will be owned in essentially equal shares by all 37 of their beneficiaries. Ellis and Sandra tells you that they are considering a few different possible strategies:

1- Setting up a trust to hold their money with all of their descendants as trust beneficiaries who will be entitled to the income by their shares of the trust and will be entitled to withdraw their shares in certain emergency case.

2- Setting up a limited partnership or LLC to hold the money and gifting shares of the entity to all of their descendants.

3- Setting up a corporation to hold the money and gifting shares of the entity to all of their descendants. You ask them whether they mean a c-corp or an s-corp but they look at you blankly. They don't have any idea what the difference is. Since Ellis and Sandra have already hired another firm to work out transfer tax issues, they only want from you an analysis if the income tax ramifications of these possible plan explaining the income tax advantages and disadvantages to the family as a whole of each plan. And recommend one of these three plans and explain why.