Experience with the Living Trust approach to Class 3?


August 16, 2010, 12:45 AM
I've been reading about the Revocable Living Trust approach to class 3 purchases. I understand why it's simpler (no photos, no background checks, no local LEO sign off) but I wonder if it's *actually* any quicker (overall) especially now that BATFE is supposed to be scrutinizing trusts. Some info on the web suggests that it was when that info was posted, but I wonder if it's still true.

There is some extra risk associated with the trust approach, since it's possible that one might make a mistake in forming the trust. Has anybody in Arizona employed the services of a lawyer to put together a rock-solid trust that will hold up to BATFE scrutiny?

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August 16, 2010, 02:43 AM
I did my trust with quicken. Sent in the papers June 2(this year), approved Aug 6. If additional scrutiny is being applied, apparently the quicken trust stands up to it. SWR Spectre.


August 16, 2010, 04:16 AM
Say NFA. Even though many dealers say it - there is no such thing as a class 3 item. There is a Class 3 Special Occupational Tax though.

I don't think your statement of there is extra risk associated with a trust is entirely correct, for two reasons.

1. If you go with a pre-packaged trust, Quicken Willmaker/Office Depot Brand/etc - SOME lawyer had to write it. So long as the blanks are filled in you should be fine.

When I did my NFA transfers, I did do with a trust in a box. It worked because I READ THE DIRECTIONS and there were no blank forms.

2. If you pay a lawyer to do it, even then they can make a mistake. Most trust texts are boilerplate though.

The theory is that Form 4's on a trust take less time and it theoretically makes sense but until someone out and out asks an NFA examiner - I will guess it does.

August 16, 2010, 08:55 PM
I had a local lawyer, who also has a class3 dealer license, draw up my trust. I took 3 months for my tax stamp to get back to my dealer. The BATFE investigator was Andrew Ashton.

August 16, 2010, 09:51 PM
I've done multiple trust transactions with a Willmaker trust, including after the scaremongering "increased scrutiny" of the attorneys that show up here trying to make a buck.

And honestly, that is the vast majority of what the attorneys with 'Gun Trust' web sites are trying to do - scare you into giving them money.

It's sad really.

Zero issues.

Aaron Baker
August 16, 2010, 10:04 PM
Here's my experience. I'm a lawyer and I drew up my own trust. I started from scratch because I had heard that certain aspects of the Quicken trusts weren't sufficient for NFA purposes. Specifically, issues that arise when you die or if you become ineligible to possess NFA items aren't usually addressed by standard trusts. If you die and the property is automatically given to your heirs, and they aren't eligible to on NFA items, what happens then? There's contingencies to think about.

The ATF isn't going to care about certain aspects of your trust. If your trust automatically gives your NFA items to any surviving heirs, the ATF isn't going to spin out every possible scenario to figure out if that might cause problems. They're fine with leaving NFA items to heirs. But once you actually die, and your 5-year-old son is suddenly the legal owner of a machinegun, the ATF will care. That's why you have to be careful with trusts. They're like wills--it doesn't matter what they say when you're alive, and good lord knows how screwed up they can be once you're dead and can no longer fix them.

The ATF does care about some aspects of trusts, though, and will scrutinize them. I drafted a trust that was governed by Kentucky law. Kentucky has adopted the Uniform Probate Code, which requires registration of trusts with the local court. However, when Kentucky adopted that section, they added language that exempted revocable living trusts. I'm in Alaska right now, but planned to return to Kentucky eventually, hence the Kentucky law aspect of the trust. Well, the ATF lawyer must have looked at the Kentucky statute, said to himself, "Hmm. Uniform Probate Code. I don't see proof that he registered this trust. I'll send him a deficiency letter." And he did. And then I had to write a letter explaining that I was not required to register my revocable living trust under Kentucky law. He got the letter and my form 1 was eventually approved.

My form 1 took from December 26, 2009 to July 2010. It wasn't quick. I got frustrated. But some people's form 1's using trusts take less than six months. It really just depends. I imagine it's a toss up on approval speed. Trusts don't have to go past the fingerprint, photograph and LEO sign-off reviews, but they do have to get looked at by the ATF lawyer. He took vacation during the time my form 1 was pending, so it took longer.

So yeah, trusts work. They can be dangerous if they're not properly drafted, but you may not realize the danger until years later. Or you'll never realize the danger--your heirs will when you're dead. The ATF won't pass one that's faulty on its face, but they're not going to explore every possible scenario under your trust, either. That's your job, or your lawyer's.

The non-trust route is perfectly viable, if you can get good fingerprints and an LEO signoff. (I couldn't get the latter, and wanted my wife to be a co-grantor and co-trustee so that she could possess the trust's NFA items.)

It's worth getting a lawyer from your state to draft one. You can go to that blog run by the NFA specialist lawyer and e-mail him. He'll refer you to someone. It'll probably run about $600. Or if you're a lawyer, you can do it yourself. Or if you're not a lawyer, but you're brave, you can do it yourself.

And no, before anyone asks, I'm not going to share my trust design publicly. Not because I'm a typical greed lawyer (although it'd be nice to get paid for it) but because if it's a bad trust, I'm only endangering myself right now. I don't have enough malpractice insurance to cover everyone on the internet if I screwed it up. :)

Aaron, who is a lawyer, but is not your lawyer.

Aaron Baker
August 16, 2010, 10:13 PM
Just another quick note, since rfurtkamp posted while I was writing my post...

There are certainly unscrupulous lawyers out there. But like I said, the concern is not so much that your trust won't be approved unless you use one. That's not a huge risk--a letter saying "Sorry, no stamp" and returning your money is a headache, not a life-changing event. The bigger concern is that your trust gets passed, you get your stamp, and then 40 years later, your heirs end up in federal court because the ATF doesn't like the way your trust disbursed your NFA toys.

Now, if you used Quicken Willmaker to save yourself $600 now, your heirs are going to have to pay their attorney fees later out of their own pocket. Not a nice thing to do to them. Whereas if you used a lawyer now, chances are that your trust is going to do what you want it to do, and your heirs will be fine. But even if your lawyer writes a bad trust, and your heirs end up in federal court, they at least can go back and sue your original lawyer for all their attorney fees. That's why attorneys have malpractice insurance and you don't.

I'm just offering food for thought. If you want to write your own trust, by all means, do it. Read it over and think of all the crazy things that might happen when you die, fix any language you need to (plain English is fine for legal documents, believe it or not) and send it in. I'm not trying to play the greedy lawyer--I'm just warning you that we're not all sharks. Some of us really do worry about what will happen to people down the road.


August 16, 2010, 10:15 PM
If you die and the property is automatically given to your heirs, and they aren't eligible to on NFA items, what happens then? There's contingencies to think about

Depends on the person and their situation as well. No children, and the two people I give half a damn about are listed as heirs. If both are ineligible (and both are well old enough to have them and already own NFA stuff), well, they can torch the guns.

My problem with the shills (and yes, the attorneys who troll these boards - not you - with scare stories et cetera are shills) is that they're overstating a problem.

Somebody saw a market and is filling it.

If I wanted to ensure that heirloom SBR #6 went to a specific not of age child, or had special circumstances, I'd hit my attorney as well - but for most folks who just want their shiny new item (and often, not even a high dollar machinegun, but simply a SBR/SBS/AOW), the trust is a holding/purchase tool and not much more.

August 16, 2010, 10:52 PM
I have a trust, drafted my my attorney, that holds several of my NFA items. My opinion: you get what you pay for. There are several items in my trust that I would have never considered. That's what I pay my attorney for.

August 17, 2010, 03:17 AM
I forget how exaclty it was worded but my trust has several people who oversee the trusts assets if they cannot be transferred to my son because of his age...quicken will ask you when you form your trust if you need someone to to do this because of a beneficiaries age.

as others said, quicken had lawyers that work for them too..

August 17, 2010, 07:09 AM
I had a local attorney who has NFA items draw up my trust. It was far short of $600. Submitted to the NFA and had my first can in 6 months. I'll never have a machine gun - this is simply for the occassional suppressor or SBR. I have no children, just my wife and I so it's pretty simple. Not all attorneys are going to charge a huge sum of money for a simple trust. I found mine through a local gun board and checked references and was quite pleased. YMMV

August 17, 2010, 06:05 PM
Thanks for all the replies.

Devil Dog: Interesting to hear that it still took 6 months, even with a trust.

Aaron: Thanks for your legal perspective. I figured that even though some of the sites advertising Gun/NFA Trusts are clearly going overboard on the scare tactics, there would probably be some valid issues using boiler plate trusts.

All: Since I don't think there's a problem with PCSD sign off, I think I'll just stick with the personal ownership option. I don't mind the photos and fingerprints and it sounds like it could take just as long that way as with the trust.

August 18, 2010, 07:09 AM
Sorry - I mis-typed - actually took 3 months almost to the day from submission to having stamp/can in-hand. From looking at NFA tracker site that seems to be fairly normal these days with a trust and no form/submission problems. Have heard the NFA has recently added a couple additional reviewers as well.

November 2, 2010, 10:22 AM
Given that I live just across the river from DC there's about zero chance of me getting a CLEO sign-offf. As a result I'm going to try out the Trust-in-a-box method. Of course I'll take plenty of time to re-read the directions multiple times. The one question I have is how do you add an additional item to an existing NFA trust? Everyone's experiences I've read about is related to setting up the trust for the first time.

November 2, 2010, 10:52 AM
I sure wish I had gone the trust route.
My problem is I've got really lousy fingerprints. Six months after my initial submission I got a letter requesting new prints. I sent in five sets along with a letter from the fingerprint guy at the local LEC.
I'm now just over the eighth month in waiting for my stamp :(.

November 2, 2010, 12:20 PM
...how do you add an additional item to an existing NFA trust?
Very simple. You record the property that the trust owns. When the trust acquires more property, you add those to the list. If/when the trust sells its property, you remove those from the list. A lot of people get terrified at going this route. There is a bit of reason for caution, but it is overblown at times IMO. Once you get started, you'll see.

November 2, 2010, 10:03 PM
I just got a stamp for an SBR based on a Willmaker trust. I submitted it in April, and got it back in mid October because I'd forgotten a line. Filled that in and sent it back, and my stamp arrived about 10 days later (last Friday, to be specific).

November 2, 2010, 11:32 PM
I would like to get some NFA item in the near future (machine gun, SBR or a suppressor). I currently live in Huntsville, AL (I don't know if the CLEO would sign off on any NFA items in Madison county though) and my question is this:

Is a living trust better in a situation where I could end up somewhere else where a CLEO wouldn't be so NFA friendly (even if the state's NFA laws were)?

November 3, 2010, 09:36 AM
Once you have the item, you can move - you don't need CLEO permission a second time providing it's legal and there are no state licenses to acquire (I have no idea if there are any, none here).

November 3, 2010, 09:43 AM
but I wonder if it's *actually* any quicker

Quick is not in the vocabulary of pretty much any government operation and the NFA branch is no different.

If I acquire a new toy or have an idea for a F1 build I print off a copy of my trust stop by the bank and have it notarized on my way to the post office and mail it.

I can’t imagine going to get sign off, having my picture taken, getting someone to take my finger prints and then mailing it off being any faster.

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