Nfa trust negatives??

[Patriotic Precision]

I was in a class 3 dealers shop the other day dropping off the paperwork for my first aow. I asked the guy working there if he has anyone buy under a trust and he said "yes every once in a while but I don't recommend it". I asked why and he said "it is not as good long term". He was in the middle of helping other customers and I didn't push the issue because I knew I was going to be back down there later.
The positives that I have read about is not needing fingerprinted, no Cleo signature, and no photo, not that I am concerned but these are just things that can cause delays. You can put a wife or family member on it so they can legally posses it. Besides cost of setting up a trust I haven't heard of many negatives.
Does anyone know what he was talking about??? Any negatives???
I am planning on building some Sbr's and buying some silencers and didn't want to do this until a trust was set up because I don't want to pay the $200 tax to transfer to me and then the $200 tax to transfer to the trust. Can I pay the $200 tax now and set up the trust and if I die can a form 5 be done to transfer into the trust tax free?

 

[mjrducky]

I can't think of any negatives other than the cost of the trust myself?

My gut says I can leave my NFA items to a trust the same as I could a living person? So the form 5 should be legal to a trust when I die?

Just my 2 cents.

 

[Destro]

ammending the trust every time you buy something new, the risk of your trust not being legal/valid (which BATFE will likely not inform you of untill it may be too late), estate taxes when you die...im sure somebody else will chime in

 

[Meister]

ammending the trust every time you buy something new, the risk of your trust not being legal/valid (which BATFE will likely not inform you of untill it may be too late), estate taxes when you die...im sure somebody else will chime in

This^

They have been invalidating sales recently. They are starting to balk at the use of Trusts as a sole means of purchasing an NFA item. If the trust has other assets and has been an entity for a while, they will likely have little issue with the transfer.

They have been know to confiscate firearms that have been illegally transferred using an "Invalid" trust, especially Mg's and DD's.

 

[ryknoll3]

This^

They have been invalidating sales recently. They are starting to balk at the use of Trusts as a sole means of purchasing an NFA item. If the trust has other assets and has been an entity for a while, they will likely have little issue with the transfer.

They have been know to confiscate firearms that have been illegally transferred using an "Invalid" trust, especially Mg's and DD's.

I call BS. Please back this up with some sort of cites. Ive heard these scares before, but no one has ever shown them to be factual. Sounds like the typicall bull you hear at a gunshop.

 

[GBuck]

You would think LONG TERM they would actually be way better, because it leaves your family with an easy way to deal with them should something happen to you. SHORT TERM I could see the only problem of spending the money to make sure it is set up properly.

 

[Meister]

I call BS. Please back this up with some sort of cites. Ive heard these scares before, but no one has ever shown them to be factual. Sounds like the typicall bull you hear at a gunshop.

A very good friend of mine who lives in Texas had a Ruger AC556 confiscated when his NFA transfer was negated due to irregularities with his trust. The trust was set up expressly for the NFA item by an attorney who has done 100 plus trusts. I don't know the particular reason why, but it's the truth as I know it.

NFA rules change day to day. Once we could put "Multi" for barrel length and cartridge. Not any more. Get used to it. The will continue to change.

 

[Patriotic Precision]

@ meister
So with not being able to list caliber/barrel as multi does that mean that you have to get a different stamp for different caliber/barrel combos?

 

[JTinIN]

@ meister
So with not being able to list caliber/barrel as multi does that mean that you have to get a different stamp for different caliber/barrel combos?

Disclaimer - I am not a lawyer nor work for the BATFE, thus this is not legal advice.

The general understanding over the years has been that you are not required to notify the BATFE for any "temporary" changes, however, for a permanent change the "BATFE" would "like" to have an update, which would be done by a letter to the "BATFE" letting them know of the changes. In addition one should keep in mind for a SBR that controlled item is the complete system (i.e. for an AR15 the combination of the short barrel and lower which contains the serial number) and that sub assemblies are in and of them self not controlled vs a machine gun which either the receiver or a collection of parts to make a machine gun (i.e. full auto parts kit for the carbine) are defined as a machine gun.

A few examples for discussion:

If one has a M16 then any change in the classic type uppers with a different caliber and/or barrel length is a temporary change and not notification is required. Myself would keep the original parts so I could go back to original, in part to keep everyone happy that it is temporary, but mostly if I every resale a Colt M16A1, it is best to have all the parts ;-).

While harder to change barrels on an HK it is IMO still temporary (friend drinks one or two bears for the AR upper in a few minutes vs several days and most of a case of a very nice beer to press out the HK barrel, tape in the new on and do a repaint ..... friends are very useful ;-). In effect the vast majority of changes an be reversed and thus are "temporary".

In the case where major cuts and changers were made on the receiver of say an HK or AK weapon, one might wish to make a case for the changes being permanent, with the safest route being asking for a review from the Tech branch, however, this is not with out risks. For examples if your modified registered receiver full size AK47 is cut down, is it now a transferable Krink or a dealer sample worth a 20th of the former value. This example is only to highlights the possible risk on excessive major changes (note the change to the Krink in the past was fine, however, changing a MAC into a M60 is not).

Due to IMO a long history of excessive letter writing for clarification and some people sailing too close to the wind, shall we say, suppressors are more restrictive and one can't effectually change OAL or caliber (or at least not as much as was gotten by with in the past).

Earlier BATFE Letter On SBRs

 

[Dead Duck]

Today I've learned that I need Glasses.

 

[Meister]

@ meister
So with not being able to list caliber/barrel as multi does that mean that you have to get a different stamp for different caliber/barrel combos?

At one time it was totally dependent on which examiner your paperwork hit. This was right after the transfer of power from treasury to DOJ for NFA paperwork. Now a days, you have to list the shortest barrel length you plan to utilize. There is some grey area to that when you have removable integral suppressors and such. I listed every caliber I planned to use when I registered mine, 6 I believe. Multi caliber was not an option back then. Multi caliber might still be an option if the receiver is stamped as such. Not 100% sure though.

 

[mms]

back to op question of trust the other major disadvantage to trust is that not every state has the same trust laws so if you plan to spend the rest of your life in one state then sure. but if you plan to move its just one more potential head ace. also i belive some states allow nfa but dont allow nfa trusts at all.

since im 26 the chances of me moving are high. and i just want to have to make sure the sate is nfa friendly not re-upping or potentially transerfeing all my items to a new trust my self exc... depending on the situation

 

[ryknoll3]

A very good friend of mine who lives in Texas had a Ruger AC556 confiscated when his NFA transfer was negated due to irregularities with his trust. The trust was set up expressly for the NFA item by an attorney who has done 100 plus trusts. I don't know the particular reason why, but it's the truth as I know it.

NFA rules change day to day. Once we could put "Multi" for barrel length and cartridge. Not any more. Get used to it. The will continue to change.

Did he get it straightened out, or is the gun gone forever? Ive hears stories too, but those people were allowed to fix their problems. You made some pretty broad generalizations based on one instance to which you admit you don't know the specifics.

 

[Meister]

Did he get it straightened out, or is the gun gone forever? Ive hears stories too, but those people were allowed to fix their problems. You made some pretty broad generalizations based on one instance to which you admit you don't know the specifics.

It's in limbo at this point, the attorney is sorting it out. This isn't the only instance. I know of 3 transfers declined by ATF on trusts, But you can go ahead and swear by them if you like. I'm just offering a different point of view.

 

[Sling10mm]

I talked to my cousin, who is a lawyer, about a trust and one of the downsides that he mentioned was that you have to file taxes on the trust each year, but we didn't get into the details.

His suggestion to me was to make sure that the items were included in my will. In this case, the beneficiary would have to file a Form 5 with the ATF. My question in this situation is who possesses the items until the Form 5 is approved?

 

[gunbunnies]

Well some of us have no other choice than a Trust to own Stamped items... If your CLEO won't sign your dead in the water without the Trust method.. The Trust would be better than having your company purchase them as you could go out of business... The Trust is designed to safe guard property and keep it within a group or family for generations... Just a thought on the Trust method of Stamp collecting...

 

[2tonic]

I talked to my cousin, who is a lawyer, about a trust and one of the downsides that he mentioned was that you have to file taxes on the trust each year, but we didn't get into the details.

^Not so. What income would a privately held NFA trust have to file/pay taxes on?

His suggestion to me was to make sure that the items were included in my will. In this case, the beneficiary would have to file a Form 5 with the ATF. My question in this situation is who possesses the items until the Form 5 is approved?

The ATF will let this "state of limbo" exist unchallenged if the items remain in the holdings of the estate and the beneficiaries file the Form 5's in a timely, mind you, timely fashion.

A Trust bypasses all this, as well as allowing others to access the items before the settlor's death.

 

[Destro]

To clarify, I think we are all discussing the trust route in the context of the OP living in a county with NFA friendly CLEO's, otherwise this thread is kinda moot for the OP.

I think it's also important, when considering a trust, is how your family feels/what your family knows about NFA items. Is the paperwork something they feel comoftable with? Do they even want your .22 can or cane gun?

If we are talking an extensive collectionof NFA items, then ensuring your family has a plan is obviously important. If I only had one or two things (except a pre86 MG), I would probably just want them to turn them in if they have no intrest in keeping the item. I would hate to think about a loved one getting jammed up over a $800 SBR they have no intrest in or knowledge about and unknowingly break the law.

 

[JTinIN]

...

I think it's also important, when considering a trust, is how your family feels/what your family knows about NFA items. Is the paperwork something they feel comoftable with? Do they even want your .22 can or cane gun?

If we are talking an extensive collectionof NFA items, then ensuring your family has a plan is obviously important. If I only had one or two things (except a pre86 MG), I would probably just want them to turn them in if they have no intrest in keeping the item. I would hate to think about a loved one getting jammed up over a $800 SBR they have no intrest in or knowledge about and unknowingly break the law.

Excellent point and well phase and to the point. In may case the son started to get interested when the M1 showed up and suggested the LLC we had talked about, besides the RR IMI Uzi was his PhD graduation present and "Dad" can play with it when he does not have it (out of state working), both being part of the LLC.

Photo or it never happened ;-)