Tennessee Firearms Assoc. Inc.

I mailed a class III Form 4 registration based upon a revocable trust off today. I will be curious to see how long it takes to process the paperwork under that type of registration.

John,

How long did it take to go through? Any problems? I want to do one myself very soon....

No problems at all. It went through in about 6 weeks which was a little slower than the last one I did but still pretty good.

Once it is set up, its easy to use the same process over and over and it gives a little cushion so that any trustee can legally possess the firearm which overcomes the problem of individual registrations being limited to the one name on the form.

John,
Can you comment on the differences between using a "Simple Trust" and an "AB Trust"

I have been researching the Trust idea off and on for a couple weeks and have seen references to using a "AB" and a "Simple Trust". I'm primarly interested in the additional Trustee feature and the possibility of making the items easier to pass on to my children.

I have a copy of (Quicken) QLP 2002 Deluxe do you see any real issues using this type of program to create a NFA Trust?
I realize you're in the business and can't really support the use of such programs

Thanks,
Mike

First, realize that trusts fall generally into 2 broad categories - revocable and irrevocable. Generally, the NFA trusts are revocable trusts and are not taxed as a separate legal entity by the IRS in all instances. The irrevocable trusts are completely separate legal entities, have their own tax identification numbers, and are treated as a separate legal entity by the IRS. Irrevocable trusts are more commonly used, for example, with insurance where you want to move assets outside or keep assets outside of an individual estate.

In most NFA trusts and other specific purpose revocable trusts, you will find provisions for additions of principal (here a firearm), ongoing control of the trust by the grantors, the level of discretion vested in the trustee or trustees, provisions for the substitution or replacement of trustees, provisions for the management of the trust (e.g., getting funds into it so that the trust can carry liability and/or general liability insurance), the provisions for termination and distribution to remainder beneficiaries and provisions to protect against titling registered firearms in individuals who cannot legally own them and thereby risk loss of the firearm through forfeiture.

I have not looked at the Quicken trusts so I cannot comment on whether they are adequate. I do believe that a standard, simple revocable trust that does not address some or all of the issues above plus the issues specific to ownership and possession of NFA firearms may put the owners and the firearm at risk.

I also suspect that there are many attorneys who do prepare trusts but who are not familiar with the requirements of the National Firearms Act, dealing with the ATF, or the succession laws regarding firearms or interstate transportation of firearms. I try to address these issues in the trusts that I prepare.

I address these issues when I do speaking engagements on trusts for firearms owners, as I did recently for the Tennessee Military Collectors Association. I do not suggest that you have to have an attorney prepare an NFA firearms trust but I would suggest caution in setting one up.

John,

Thanks for the detailed reply. I didn't realize that you actually prepared trust for others in your practice. I'm sure that the cookie cutter programs don't address anything NFA specific. I don't plan to have a significant number of NFA items and can't decide if it's worth the trouble and expense of setting one up.

I would be interested in hearing your presentation on NFA Trust if you have any planned in the near future.

Thanks,
Mike

Mike,

I do not have any planned but I might work one up for a Nashville chapter meeting this fall.

john

John

Is it possible to move my individually registered (form 4) NFA to a trust without paying tax again?

Virgil Flaherty

Not that I am aware of. It remains a transfer subject to tax according to BATFE

I have a trust, and I have bought a couple of suppressors under that. Now I'd like to buy a 'pistol' version of a rifle and SBR it. Obviously I'd like to place that under the trust also, but I haven't actually bought a firearm as property of the trust yet.

I understand about filling out the paperwork with the trust for submission to the BATFE for the stamp; but any tips for filling out the 'normal' form to purchase the pistol and how to approach the TICS check and all that? Is it approached in the same way as the federal docs in that it's not being purchased by an individual?

You have to make the local purchase in the name of the trust. Making it individually and then moving it into the trust, a separate legal entity, constitutes a transfer.

I didn't think you could purchase Title 1 under the trust.

A trust can be used anytime that an individual can make a purchase.

Aggh, ok, I was told that there was no provision for that.

As a Title 1, would there be any other conditions to meet to make the firearm property of the trust?

Once the Title 1 firearm was property of the trust, it would just be a matter of receiving an approved Form 1 filled out under the trust name correct?

I think I see now, Section A, Question 1:

"When the buyer of a firearm is a corporation, company, association, partenership or other such business entity, an officer authorized to act on behalf"

Should apply to purchasing under a trust also I would think.

I understand that it would be important to establish ownership of the Title 1 firearm by the trust before submitting a Form 1, to avoid possible interpretation as a transfer after it was registered as an NFA weapon?

Bill of sale prior to conversion.