NFA Trust - So many questions -

[RevolverRob]

Chance's thread and the specter of substantial anti-gun governmental sentiment has me thinking about establishing an NFA Trust, particularly for the acquisition of silencers. I'm a Texas resident, but reside part-time in a non-silencer friendly state (IL.). As a result, my NFA items would have to stay in Texas, when I am in IL.

To make things easier, I think I want to establish a trust - because the NFA item(s) in question would be stored at my permanent residence in TX, where multiple adults live.

It seems, if I lock the NFA items away and only I have the key, I do not need to have those individuals be co-trustees, but it also seems it would be simpler to have them be co-trustees to avoid any potential problems. Is this a correct understanding?

Since the passage of 41F - it's unclear to me what has primarily changed in trust formation.

I think it's that for all pending Form 1 or Form 4 applications - all co-trustees must submit fingerprints and a passport photo?

But my understanding is that if I am the sole trustee and I acquire the tax stamp first, I can then add co-trustees without them needing to submit anything beyond the questionnaire from the ATF?

Do I have to wait for the ATF to acknowledge the amended trust, prior to allowing the co-trustees to possess the NFA items?

If I have it correct - that I do not need to have all individuals in the residence listed as co-trustees, assuming only I possess the means to access the NFA item, but they can be added at a later date without any issues, once I have the tax stamp and NFA item in question...Then the last question is -

Who should I use to establish my NFA Trust?

[Dan_S]

Jim Willi - gun trust guru. Based in Texas.


I don’t mean this in a bad way, just....you’re way overthinking it.


The issue with having the items locked up, is perfectly acceptable. There’s no need to list anyone else other than a beneficiary.

No, you don’t have to wait for ATF to ‘approve’ an added trustee, as long as you have no items pending at the time.

There is no difference to establishing a trust pre/post. The issue is that now trustees must file prints for each item purchased or made.

[OlongJohnson]

Jim Willi - gun trust guru. Based in Texas.

Austin, I believe.

[Dan_S]

Then again, if you’re looking at a trust solely for storage purposes, forget it.


Storage is just that - storage. Put them under lock and key, and forget about it. There is no requirement for storage to take place within the limits of a trust, if one doesn’t live full time at that address, etc etc.

A phone call to Jim’s office would be considerably better than an Internet forum, for legal advice, however, and he is more than willing to talk to clients, or potential clients, in my experience.

[Wake27]

I recently got one through Arsenal Attorneys and was happy with what I got. I primarily chose them because I’m active duty and they have representation in a huge amount of states.


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[Gray Ghost]

A few points that you may find helpful:

1) Neither the ATF nor its regulations have anything to do with trust formation or whether a trust is valid. Those are controlled by state law. A trust can actually be created orally, but some kind of written instrument is usually used. All you need are a grantor, a trustee, a beneficiary, and a res (the property being put in trust). I have found that it makes sense to use a written trust instrument that is in the sort of form the ATF is used to seeing. They have non-lawyer examiners looking at them, and it is easier not to have to argue with them.

2) There is nothing that says only the trustee can possess the trust property. The trustee holds title to the res for the benefit of the beneficiaries. Given the sort of property at issues in an NFA trust, the beneficiaries wouldn't get much benefit if they couldn't use the property. I know of no case law on this either way, but I write my trusts to make it explicit that any beneficiary may possess the trust property with the consent of the trustee.

3) In practical terms, I would install a safe or lockbox at your Texas location that only you have access to and keep your stuff in there. Simple, and the ATF will not hassle you about it.

[whomever]

"The issue is that now trustees must file prints for each item purchased or made."

1)That's my understanding. IANAL, and I haven't bought anything post-41, so take this with a grain of salt.
IIUC, you are correct, you can get the stamp approved as a trust of one, then add people. But when you want stamp#2, all those people need to be dropped from the trust until the stamp comes, or submit prints, etc.

One of the big vendors (SilencerShop??) came up with the notion of doing one trust per item, i.e. you use TrustA to get the stamp, then add family members, then create TrustB to get the stamp for the second item, then add everyone, and so on. It would be tedious if you had TrustA through TrustZ and wanted to drop a trustee from all or them, and of course it you want to carry paper trust copies that's a lot of paper, etc. But it does help with the problem of corralling a lot of prints for every purchase.

2)If you ever envision a Form 1 build, pick a short trust name, for ease of engraving. Not, for example, the 'Ignatius Alonzo Whomever Family Consolidated Universal Sooper Dooper National Firearms Act Trust' or something like that, which is only slightly longer than mine :-(.

[fatdog]

ne of the big vendors (SilencerShop??) came up with the notion of doing one trust per item, i.e. you use TrustA to get the stamp, then add family members, then create TrustB to get the stamp for the second item, then add everyone, and so on. It would be tedious if you had TrustA through TrustZ and wanted to drop a trustee from all or them, and of course it you want to carry paper trust copies that's a lot of paper, etc. But it does help with the problem of corralling a lot of prints for every purchase.

I pushed most of my NFA items through, form 4's and form 1's for two separate trusts, before the new ATF trust rules went into effect. Anything filed before the rule effective date was grandfathered so nobody including me filed fingerprints and photos, although picking up the items I had to 4473 and NICS.

Everything post the trust rule change date where fingerprints and photos required I have followed the path mentioned above, one trust per item. One reason I am ok with that is my state's revocable living trust rules. No registering, no filing, etc. It is just a piece of paper, so there is no big deal to me in creating multiple trusts and adding whomever or amending it later. An RLT is just a piece of paper with a notary stamp in Alabama. I agree making changes to all of them would be a bit tedious, but no real expense involved.

Fifteen years ago when I started the NFA trust route, I had my AL based attorney who is expert on wills and trusts in our state under our state laws draw it all up for me after furnishing him with the articles written in Small Arms Review about some considerations for a trust that dealt with NFA firearms. I was a tiny bit leery at the time of some of these attorney's who claim to know all the ins and outs of every state with respect to the subject of trusts.

[Dan_S]

whomever


You are absolutely correct in what you’ve said. I guess I thought that was just...implied....by what I said, so did g think to flesh it out further.

[tango-papa]

I'll second the recommendation Dan_S made for Jim Willi.


Read everything here (the information he provides on his website is excellent):

https://texasguntrust.com/

Any unanswered questions afterward, call the man - he is a good dude.

Willi's trust will provide you with all the documents you need to add/remove persons from the trust at any time you deem it necessary.
Addition/removal of persons is as simple as having the applicable documents notarized and added/included with your trust documents.

[David S.]

Another satisfied customer of attorney Jim Willi.

[MGW]

I did my trust through Silencer Shop. Super simple and the turnaround was fast.

[WobblyPossum]

Any other users of the Silencer Shop trusts? I bought my first suppressor through Silencer Shop and had a great experience. I’ll very likely be Form 1ing an AR pistol in the near future and would like to go the trust route. I see several more NFA items in my future and think that the trust route would give me more flexibility for certain things.

[HCM]

Any other users of the Silencer Shop trusts? I bought my first suppressor through Silencer Shop and had a great experience. I’ll very likely be Form 1ing an AR pistol in the near future and would like to go the trust route. I see several more NFA items in my future and think that the trust route would give me more flexibility for certain things.

I used the Silencer shop trust. It was quick and easy.

You fill out everything online and they send you a PDF of your trust which you then get notarized.

They are available to answer questions when you are filling out the online portion and if Silencer Shop staff can’t answer they gave a law firm on retainer that can.

[RancidSumo]

I used the Silencer Shop trust because I was too lazy to do any research and just write my own. There is no magic to it, pretty much a bare bones basic trust like any trust attorney in the world could draft you. That said, its also much cheaper than having a lawyer write one up.

[Elwin]

For context, I'm a lawyer (licensed in Iowa) and I've done some work doing NFA trusts.

It's absolutely imperative that you have a Texas lawyer knowledgeable of NFA law, Texas state gun laws, and most importantly Texas trust and estate law set this up for you. Many gun shops or other services offering form gun trusts are committing what is, in my opinion, grossly negligent unlicensed practice of law. The forms they use are very often egregiously wrong either in how they set up transfers, how they work under a given state's law, or what they do (or don't do...) regarding federal gun laws. As mentioned above, the ATF is going to do absolutely nothing to ensure that your trust is valid under Texas law. If it turns out it isn't (and there are plenty of ways that can happen if the drafter doesn't understand Texas trust law), then there is no trust in existence, and therefore everyone possessing NFA items pursuant to the alleged trust is automatically an unauthorized transferee and subject to the 10yr prison sentence and substantial fine for that offense.

I'm not giving you legal advice (again, only licensed in Iowa), just saying you really need to make sure you get some. If you knew all that already, then this may benefit others reading the thread. It's a huge issue with all the companies offering the "great deal" of "here's our trust form for $50, fill in the blanks and good luck!"

[UNM1136]

I have not transferred anything under the new rules, yet, and I will have to review my Trust to verify terms. My wife and I are the Settlors-Trustees of the Trust. We can do as we wish with the Trust and the items it contains, although my lawyer was clever enough to include that I manage the Trust, so she can posessess Trust owned items and add to the Trust, but can only remove items from the Trust with my approval. My dad and her dad are Successor Trustees, and only have access to Trust owned items upon my wife's and my death, to secure and protect for the Beneficiaries. My children are the Beneficiaries of the Trust, and as they come of age I will have them moved over to Successor Trustees or Settlor-Trustees.

So I guess I need to contact my lawyer at www.guntrustlawyer.com and verify that I don't need my dad's and father-in-law's prints and photos to transfer into the Trust, or what changes I need to make to ensure it. I think I am OK but will be sure before my next Form 4.

The lawyer I used wrote the Trust, had it reviewed by a local estate planning attorney familiar with NFA, and sent me a wonderful thirty page "how to best use your new Trust" document that addressed so many issues I didn't know were issues until I read them and said "well, yeah, I can see that. Duh".

The SBR'd and suppressed .22 MP5 clone is WAAAY to much fun to leave to risk.

pat

[theJanitor]

I asked this years ago, and people said it was going overboard. But with current legislation trying to block firearm transfers or inheritance, would forming a trust to encompass non-NFA items be reasonable?

[olstyn]

I asked this years ago, and people said it was going overboard. But with current legislation trying to block firearm transfers or inheritance, would forming a trust to encompass non-NFA items be reasonable?

My wife asked me this question a few weeks ago, specifically in regard to what would happen to her father's collection of guns upon his death (he's in good health, but better to consider this stuff ahead of time) and I wasn't really sure what to tell her. I'm thinking it's a great big wide open "maybe."

[joshs]

I asked this years ago, and people said it was going overboard. But with current legislation trying to block firearm transfers or inheritance, would forming a trust to encompass non-NFA items be reasonable?

It could be, but it depends on how the state law is structured. Federal law generally exempts from some transfer rules what ATF considers "transfers by operation of law." Usually these are intestate succession or through a will, but can also include distributions under a trust.

If the state law completely prohibits transfers, then a trust isn't a forever solution, but it can help prolong the time period where a "transfer" doesn't occur. Trusts are usually going to be subject to the applicable state's rule against perpetuities. This is a rule that prohibits "dead hand control" of assets, so eventually a distribution/transfer will need to occur.

While this is not legal advice and no attorney-client relationship is expressed or implied, many trusts and estates attorneys suggest a family trust with "pour over will." This would put all a person's firearms in a trust (with their other property) and NFA firearms in the same or a separate trust.

However, a trust isn't necessarily a solution, and can cause problems if a state law is poorly drafted to the point where it seems to limit firearms ownership to a natural person.

[joshs]

My wife asked me this question a few weeks ago, specifically in regard to what would happen to her father's collection of guns upon his death (he's in good health, but better to consider this stuff ahead of time) and I wasn't really sure what to tell her. I'm thinking it's a great big wide open "maybe."

It depends on state law, but under federal law, a transfer of non-NFA firearms under a will is generally exempt from the interstate transfer limitations. See 18 U.S.C.A. § 922(a)(3), (a)(5).

NFA firearms may be transferred tax free in these instances on a Form 5, but the provisions of the NFA otherwise apply to the transfer.

Note that only the actual bequest or transfer by intestate succession is covered. For example, if the father leaves everything to his wife, but then the wife gives the firearms to a child, only the first transfer is likely subject to the exemption (not getting into the law of disclaimer).

Again, this is not legal advice and no attorney-client relationship is expressed or implied by this post.

[olstyn]

Again, this is not legal advice and no attorney-client relationship is expressed or implied by this post.

Thanks for chiming in. It is faintly ridiculous that attorneys have to make disclaimers like that when providing even fairly basic information, but I guess that's how the world is.