Appointment of Trustee


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plodder
October 24, 2013, 05:52 PM
I'm new to the Trust/Suppressor game:

So if I as the Grantor appoint new/additional co-trustees, list them on my trust document, and obtain their signature and date; are they immediately legal possessors/users of any of the listed NFA Firearms & Devices? No notarization necessary? (all of this assuming they are not prohibited persons, of course)

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1858
October 24, 2013, 07:24 PM
It's my understanding that you need to have their signature notarized. I had a trust set up recently and had to have (according to the lawyer) the trustee sign in front of a notary.

1858
October 24, 2013, 08:54 PM
I just spoke with the lawyer that set up the trust for me. He told me that there will be a need for additional notarized signatures any time you alter the main body of the trust. For example, if you add trustees, that would require all trustees (including the new one) signing in the presence of a notary. Also, you'll need to notify the ATF after the trust has been revised, signed and notarized by sending them a copy along with a letter explaining the change(s).

Aaron Baker
October 24, 2013, 09:13 PM
I just spoke with the lawyer that set up the trust for me. He told me that there will be a need for additional notarized signatures any time you alter the main body of the trust.

And that's the important thing here--talk to the lawyer who drafted your trust. Trusts are creatures of state law, and the laws governing them will differ from state to state. In Kentucky, only the grantor of a trust needs to sign it. His signature should be notarized, of course. But that means a grantor can amend his trust in any way, including the addition or removal of trustees without having a trustee sign anything at all. However, the laws in your state may be different, so ask your trust lawyer.

Also, you'll need to notify the ATF after the trust has been revised, signed and notarized by sending them a copy along with a letter explaining the change(s).

This is incorrect.* There is no legal requirement when a trust is amended to notify the ATF. In fact, I don't know that they would know what to do with that information if you supplied it to them.

Aaron

*Who knows how things might change when potential new regulations come into effect, but this is the state of the law of today.

1858
October 24, 2013, 09:26 PM
Trusts are creatures of state law, and the laws governing them will differ from state to state.

What does the ATF know or care about state law. They control the possession of NFA items on the Federal level so if they need all trustees to sign then surely that trumps any state law.

This is incorrect.* There is no legal requirement when a trust is amended to notify the ATF. In fact, I don't know that they would know what to do with that information if you supplied it to them.

How about an address change? That's an amendment to a trust. I'll defer to someone who has passed the bar and does this for a living until I know otherwise. I see that you're a lawyer according to your website but I get the feeling that there are lots of folks with trusts that they downloaded off the internet who are an ATF visit away from wearing an orange suit.

medalguy
October 24, 2013, 09:36 PM
No, per my attorney my trust does not need to be amended as the result of my moving, even to a new state. The original trust recommended filing the name and address with the county clerk where I lived, but since I did not do that, there is no requirement that the clerk (nor anyone else) be notified of the change of address other than filing and getting approval on a Form 20 from BATF prior to the moving of the weapons. That's New Mexico law, your state may be different.

BTW my understanding from talking to Martinsburg is that once trust transfers are approved, the actual trust copy is tossed not retained.

1858
October 24, 2013, 09:44 PM
OK ... but I'd like to see some black and white on what the ATF requires regarding a trust independent of state law. I clearly have a lot of research to do.

Telekinesis
October 24, 2013, 10:18 PM
OK ... but I'd like to see some black and white on what the ATF requires regarding a trust independent of state law. I clearly have a lot of research to do.

Good luck on finding extra-legal requirements for NFA Trusts. They don't exist. All the ATF cares about is that you have a legitamate trust that is a separate legal entity. Trusts are regulated at the state level, so what makes a legal trust is dependent on state law.

Arizona_Mike
October 25, 2013, 02:14 PM
What does the ATF know or care about state law. They control the possession of NFA items on the Federal level so if they need all trustees to sign then surely that trumps any state law.
No it does not. The trust is a legal entity defined under state law and is the entity that owns the firearms. The ATF cannot just make up things not in Federal law.

Same with a corp owned firearm. There is new duty to tell the ATF every time they hire or fire someone!

Mike

Aaron Baker
October 25, 2013, 04:36 PM
What does the ATF know or care about state law. They control the possession of NFA items on the Federal level so if they need all trustees to sign then surely that trumps any state law.

The only thing the ATF "knows or cares" about state law is that if your trust is in compliance with state law, then it's a valid trust and they don't care beyond that. The firearm is transferred to the trust, not to any trustees, grantor or beneficiaries. So once the transfer is made, you may do anything to the trust that's valid under your state's trust laws and the ATF doesn't care nor has jurisdiction. You're welcome to do the research and try to find some federal law about the ATF and what they require out of trusts, but it doesn't exist. If it's a valid state law trust at the time the transfer is made, that's all that matters.

How about an address change? That's an amendment to a trust.

No, it's not. At least not in Kentucky and not in the trusts I draft. The trust's address appears in the certification of trust, not in the declaration of trust. No amendment is needed to make an address change. Now, if you move from one state to another state, you will need to notify the ATF using the proper form, but that's a different non-trust-specific requirement.

I'll defer to someone who has passed the bar and does this for a living until I know otherwise.

Good. I have and I do. With that said, if you would rather defer to your own trust lawyer in your own state, that's probably wise. But if he told you that you have to send a new copy of your trust to the ATF whenever an amendment is made, he's wrong.

I see that you're a lawyer according to your website

Yes, I am.

but I get the feeling that there are lots of folks with trusts that they downloaded off the internet who are an ATF visit away from wearing an orange suit.

That may be true. However, it's not relevant to this discussion because those people aren't my clients, by definition. Also, those people may have invalid trusts or other reasons that the ATF could be visiting them. However, failure to notify the ATF of a trust amendment is not one of those reasons, because that's not a legal requirement.

Aaron

1858
October 25, 2013, 08:29 PM
The trust's address appears in the certification of trust, not in the declaration of trust. No amendment is needed to make an address change.

On my trust (Arkansas) the address is in Schedule A. The certification of trust follows Schedule A and doesn't have my address on it. Is Schedule A considered part of the declaration or certification?

This is all very educational.

Aaron Baker
October 25, 2013, 10:26 PM
The certification of trust follows Schedule A and doesn't have my address on it. Is Schedule A considered part of the declaration or certification?

With the caveat that any opinion I'm giving is based on Kentucky law and that it's best to speak with your own attorney who is familiar with your own state's trust laws, I can say that you should be able to amend a trust Schedule without any signature, and it isn't truly even an "amendment."

The way that I draft trusts for my clients, the actual trust itself is the "declaration of trust" document, which must be signed and notarized by only the grantor. The "certification of trust" is simply a short form which summarizes certain terms of the trust, includes certain changeable information such as the trust's current address, and only needs to be signed by one of the currently acting trustees (including a grantor who is also a trustee). The purpose of a "certification of trust" is to provide a summary of some of the trust terms that you can provide to, for instance, a bank, which needs to know that your trust exists and what some of the terms are, but doesn't need to know ALL of the trust's terms. And, again, it's a document that can be changed easily without actually making a trust "amendment," so you can put things like the trust address in there.

So what are "schedules"? Well, they're documents which are referenced within the body of the trust itself (the "declaration of trust") which contain information that's incorporated by that reference. The reason you use schedules is because they contain information that you might want to change or add to without having to do a trust amendment. You can have schedules with names, such as "schedule of beneficiaries" (whose purpose should be obvious), or you can have schedules that are listed by letter "Schedule A" or "Schedule B" and so on. These are a traditional trust drafting tool, and don't always contain the same things, depending on the trust.

For my clients, the only schedule referenced in the trust itself is "Schedule A", and it includes the trust's property. Thus, every time that you add a firearm to the trust, you simply create a new Schedule A and add the property to the list. My trusts include information like trustees and beneficiaries in the body of the trust, but I've seen at least beneficiaries set up in schedules instead.

If a term of the trust is part of the declaration of trust, then to change it, you must "amend" the trust. That's easy to do. You simply write a new document that outlines the change you're making and sign and notarize it. Then you keep a copy of that with the original trust. After you pass away, someone wanting to understand the trust must read it together with the amendments to understand it. What you can do if you make a lot of amendments is to eventually make a "restatement" of a trust, which is a document that incorporates all the changes and actually REPLACES the original declaration of trust. Then the original and amendments can be destroyed, since the restatement becomes the new trust document.

Again, some of what I'm saying may be specific to Kentucky trust law--I'm not familiar with the trust laws of other states. And it may also differ based on who drafted your trust, since just like contracts, there are many different ways to draft a legal trust that can be equally valid.

If your trust's address is in a Schedule, then you should be able to update it as often as necessary without a bunch of signatures and hassle.

If your trustees are named in the actual declaration of trust, then you generally need a trust amendment to change/add/remove trustees. That's not hard to do, though, as discussed above. And once the transfer has been approved to your trust, the trust is the owner of the NFA firearm, no matter who is added or removed as trustees. The ATF does not have to be notified of those actions. They're not doing background checks on trustees anyway.

This is all very educational.

I hope so. I apologize if I came across as snarky before--I do want people to understand how all of this works, because the more people that own NFA firearms, the more "normalized" NFA ownership becomes. And the trust route is a great ownership method. I also understand exercising great caution when it comes to the ATF and their sometimes arbitrary enforcement of draconian laws and regulations. But I also don't want to see people creating rules or hurdles to overcome that don't exist.

Aaron

1858
October 25, 2013, 11:21 PM
I hope so. I apologize if I came across as snarky before--I do want people to understand how all of this works, because the more people that own NFA firearms, the more "normalized" NFA ownership becomes.

No need for an apology. You're educating a bunch of folks here including me and it's much appreciated. Thanks for taking the time to set me straight.

plodder
October 26, 2013, 09:46 AM
Wow Aaron! I'd vote that post #12 above be nominated for "stickiedom":)

Thanks for your very informative and nearly completely non-legaleze explanation.

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