Question on Trusts and Officers?


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Sam1911
March 5, 2010, 10:42 AM
Curious, and I haven't been able to put my finger on this answer:

When going the "Trust" route with NFA items, it is always said, "anyone you name as an officer of the trust can possess and use the weapon even if you're not there, etc."

What are the criteria for who you can name? I assume that everyone you name will not have to submit fingerprints and submit to the background check? So is it then up to your word that they are elligible to even own guns?

Meaning, if I form a trust to own Title II arms, and name my wife, I'm sure that's fine as she's clean as a whistle. But what about her ex-con brother? What if I'm so dumb as to put him on the trust? Is that going to get flagged somewhere along the line? (No, my wife doesn't have an ex-con brother...)

Obviously it would be a separate felony entirely for him to even touch the guns, so it could be a legally moot point.

Are there other limits to whom I name or how many? Could it be 100 of my closest friends?

I can imagine some of the legal and practical risks involved, but is it even possible?

Thanks, in advance!

-Sam

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CoRoMo
March 5, 2010, 01:33 PM
Whoa. I should have asked my questions here, that I just asked over here (http://www.thehighroad.org/showthread.php?p=6332162#post6332162). I didn't see your thread until I posted. It would better fit here though, so I'll just quote myself.

The lending of a trust owned title II component.

Quote:
The real benefit of the trust is while you are alive. Anyone you put on the trust can have possession of the firearm.

So, if you have friends and family that might want to shoot the thing you don't have to worry about always having to be there.
I've spoken to lawyers, and to non-lawyers who I think know more than the lawyers. I've been told that I can leave my suppressor in the possession of someone in another state, if they are named in the trust. Of course, I've also been told that, that is incorrect, that I have to be there and I always have to maintain control of it. That the trust simply allows my wife to know the combination to my safe.

I've been told that others who are named in my trust can purchase title II items on the same trust. I have a hard time swallowing that one, but there it is.

Can I loan my suppressors to someone else in the trust or not? Do state lines matter? What part of 18 U.S.C. 922 speaks to corporately/trust owned NFA products?

I'm also interested in your questions though. Is any of this stuff even defined by 18 U.S.C. law or recorded somewhere as the ever-fluid ATF opinion?

TexasRifleman
March 5, 2010, 01:40 PM
. Of course, I've also been told that, that is incorrect, that I have to be there and I always have to maintain control of it. That the trust simply allows my wife to know the combination to my safe.

Thats an interesting argument. I don't get it. Both of those things would be having the item under their control, whether locked in the safe or stuck in their pocket it seems to me.

Weird. Probably the "right" answer is whatever the jury thinks it is at the time.....

I've been told that others who are named in my trust can purchase title II items on the same trust. I have a hard time swallowing that one, but there it is.

Not remotely an expert on this stuff but as I understand it this one all depends on how the trust it written, what individual titles and responsibilities are, etc.

Maybe going with a full blown corporation is better for some of these odd things, rather than a trust.

medalguy
March 5, 2010, 01:45 PM
As I understand the trust laws, and someone can correct me if I'm wrong, the trust is a legal entity that has all the entitlements that an individual does. If you put firearms into a trust, they are owned by the trust. Simple as that.

As far as someone else using the trust to buy NFA weapons, that's fine as long as they are placed into the trust, PROVIDED you have allowed that to happen in setting up the trust. You can allow members of the trust to add items to the trust or not, but remember that if they add firearms, anyone named in the trust would be allowed to take their (the trust's) firearm and have it in their possession and shoot it. Not for me, IMO.

Regarding taking a suppressor to another state, that would be allowed provided ATF has granted permission to take it across state lines and it is allowed in the other state. I don't own a can so it may be that permission is not required for cans. I only own weapons and permission is definitely required in advance before transporting them across a state line. But as far as the trust is concerned, again they would be owned by the trust and if the trust allowed movement, it would be legal.

The part about your wife knowing the safe combination is one I can't address. My wife knows our safe combination, but I don't think that has anything to do with possession of the weapons. Just my .02, YMMV. Hope this helps a bit.

CoRoMo
March 5, 2010, 01:54 PM
...to take it across state lines...permission is not required for cans.
This one is correct, and IIRC, applies to AOWs too.

I don't want to get away from Sam's questions because they are more interesting than mine, but I've always gotten varied opinions so I asked. I don't really care about the issue of trustees purchasing NFA stuff through the trust because I wouldn't allow that. It'd be a HUGE risk IMO, but that just was something that was privately told to me by a lawyer here, when he expanded on his answer to my main question about lending across a state line.

In regards to the wife's access to the safe, this is always mentioned here in regards to individually owned NFA arms. I'm certain that no one has ever been busted for keeping their can in a safe that the spouse has access to, but I always see members post that the letter of the law says nobody else can have access to it. I don't suppose an individually owned can could be left at a friends house and be deemed in my control, even if I have a modicum of control over it there, through some agreement between the two of us. Letting someone at the range shoot my SBR, while I'm immediately present, gives me less control than that.

Sam1911
March 5, 2010, 03:43 PM
As far as someone else using the trust to buy NFA weapons, that's fine as long as they are placed into the trust, PROVIDED you have allowed that to happen in setting up the trust. You can allow members of the trust to add items to the trust or not, but remember that if they add firearms, anyone named in the trust would be allowed to take their (the trust's) firearm and have it in their possession and shoot it. Not for me, IMO.

This goes right to the basis of my question. If the gun is registered to the trust, not to ME specifically, and anyone who is an officer of the trust can take posession of the gun (or can), what was the point of having MY background checked, etc.? Why not have Trust Officers 2, 3, 4, ... 37, 38, ... 347, 348, etc. all get their checks done too -- if one of them is as likely to be in posession of it as I am?

And, a Trust is not neccessarily an item that ONLY exists for the purposes of, and at the moment of, registration of an NFA item. What if I register the item to the trust and then three years later make 37 more people ... or all the members of my shooting club (or whatever) officers of the trust? Can THEY now have possession of the item as well?

Seems a little like buying a ticket to a movie and then going to the back of the building and holding open a fire door so all your buddies come on in. :scrutiny:

It would probably be quite obvious to a lawyer that I have NO idea what I'm talking about, but that's why I posted. :D

TexasRifleman
March 5, 2010, 03:48 PM
If the gun is registered to the trust, not to ME specifically, and anyone who is an officer of the trust can take posession of the gun (or can), what was the point of having MY background checked, etc.? Why not have Trust Officers 2, 3, 4, ... 37, 38, ... 347, 348, etc. all get their checks done too -- if one of them is as likely to be in posession of it as I am?

I don't believe there IS a background check for filings done with trusts and corporations is there?

IIRC you don't submit fingerprints. (I don't do the trust thing since my PD Chief signs everything I put in front of him)

CoRoMo
March 5, 2010, 03:50 PM
Well, I think your always going to be able to add and subtract property that the trust owns, and you can add and subtract trustees. What is interesting about your question is the prohibitory nature of the trustees. After all, the legality of a trustee's access can change if they later did something beyond your knowledge.

Me no lawya either.:D

Sam1911
March 5, 2010, 03:51 PM
Oh....well, that would explain a lot, I guess.

See? I told you I didn't know what I was talking about! I really meant it!

:D

CoRoMo
March 5, 2010, 03:57 PM
I've only found references to some cursory form of check via the trustee's names, but obviously nothing like the FBI/fingerprints and all thoroughness.

This ambiguity is the problem I've always encountered. I can't really find definitive answers anywhere.

jojo200517
March 5, 2010, 11:38 PM
Ok I don't know what I'm talking about but i'm just curious as hell. People always discuss an individual, a trust, or a corporation owning a title 2 item. What about LLC's, can they own them too? I think I remember from accounting class that a corporation is a royal pain in the rear to set up where as an LLC is about as easy as slicing butter. Aside from the guess that a Corporation is more of a pain to set up than a trust, what would be any benefit of getting a full blow corp.

Also if you have to be in complete control as the owner of the item, how does it work (legally) at machine gun shoots where mr. rich guy lets you shoot his personal say belt fed .50 cal machine gun? I can see rental ranges and such most likely being set up as a corporation and this being part of the business so it being allows but what about individual owners?

I know I asked a lot here but just one more thing please, if you have an item as part of a corporation and while someone was firing it a malfunction injured them or worse, would you have the same personal liability protection that a standard corporate business owner would have (IE they can only sue the corporation and receive from it rather than taking personal property of the owners)

medalguy
March 6, 2010, 02:37 AM
Good points. I'll comment on the items I feel competent about.

1. A trust IS a legal entity and no background checks or fingerprint cards are done on any employee or officer of the trust. The items are owned BY the trust. The trust can add or delete items as it sees fit (That is, the officers of the trust see fit). This includes adding or deleting officers of the trust. The mechanism for doing all of this is set up as part of the trust documents.

2. I suppose there is no real limit to the number of members of a trust although I would certainly want to keep it to a minumum for liability issues as mentioned.

3. I don't know about legal entities other than trusts owning NFA items. I do know ATF is pretty clear that trusts can own them, but I have never really heard of any corporation or LLC owning them. In my opinion, this is where a lawyer is definitely your best friend. Trusts are their baby and they (should) know how to set them up. Having said that, not all lawyers know about NFA trusts, so it would definitely be in your best interest to be sure whatever attorney you might be considering using is indeed familiar with them. Also keep in mind that although ATF allows trusts to own NFA items, that could change at any time with just a ruling from them and *poof* it's no longer allowed.

TexasRifleman
March 6, 2010, 10:35 AM
I do know ATF is pretty clear that trusts can own them, but I have never really heard of any corporation or LLC owning them

Corporations were doing it before the trust thing came up. Not sure about an LLC.

I know a couple of collectors with full blown corporations to own their stuff.

It's a real pain though because they have to have stock, shareholder meetings, all kinds of record keeping etc.

They are rather large collectors and have military aircraft and vehicles in addition to the firearms, but they are organized as non-profit museum corporations for that purpose.

CoRoMo
March 8, 2010, 01:04 PM
What about LLC's, can they own them too? I think I remember from accounting class that a corporation is a royal pain in the rear to set up where as an LLC is about as easy as slicing butter.

Yes, the LLC can own the item just like any of the other separate entities mentioned. My LLC cost $50 to set up, plus several hundreds more to have a legal service finish it out. My trust cost me $14 (the price of Quicken Will Maker).

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