Anyone have pros/cons/info regarding individual vs trust? Considering SBR

In all but a very few cases, a trust was used because the local CLEO refused to sign and a trust did not require that signature. I am not sure of the status but a change is in the works so that transfers will not need a CLEO signature, and there will be no reason for the trust any more.

Unless there are time constraints, it might be a good idea to check the status of the change and maybe wait until it becomes effective before filing an application.

Jim

ATF rule 41f has been published and will be in effect on 13 Jul 2016.

Can be summed up by saying that, after it goes into effect:

Responsible members of a trust must provide fingerprints and photographs. Will also have to notify the CLEO of the NFA transfer/making.

Individuals no longer have to get the approval of their CLEO, only notify them. Will still have to provide finderprints and photo.


I will continue to utilize my trust because I feel like it covers the legal possibilities surrounding my wife having access to my NFA items. Then again, I plan on having all the stamps I was applied for before 41f goes into effect anyways. Gonna be a few form 1 silencers with stamps in hand but no plans on actually making them for a while.

Jim K said:

In all but a very few cases, a trust was used because the local CLEO refused to sign and a trust did not require that signature. I am not sure of the status but a change is in the works so that transfers will not need a CLEO signature, and there will be no reason for the trust any more.

Unless there are time constraints, it might be a good idea to check the status of the change and maybe wait until it becomes effective before filing an application.

Jim

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I don't know why so many people say that. I live in an area where most CLEO sign off, and yet every single NFA owner I know of has their items in a trust. I didn't even consider CLEO signoff in choosing a trust.

1KPerDay said:

So if I don't currently have a trust is there any reason why I would want to start one to SBR one rifle? And in that case would I have to transfer my individual NFA items into the trust and would it be $200 tax each?

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Transferring NFA items you own already into the trust will incur a form 4 and tax.

If you already don't need the options a trust provides such as allowing other people access to your NFA items, then I see no reason to start a trust now.

Jim K In all but a very few cases, a trust was used because the local CLEO refused to sign and a trust did not require that signature. I am not sure of the status but a change is in the works so that transfers will not need a CLEO signature, and there will be no reason for the trust any more.

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The best reason for a trust has nothing to do with the Form 4 application.
It allows any member of the trust to be in possession of the firearm by themselves.

An Individual Form 4 means you have to be there with anyone else shooting the firearm.
A Trust Form 4 means you can hand the firearm to any other member and they can take it shooting all by themselves.

pdsmith505 said:

1KPerDay said:

So if I don't currently have a trust is there any reason why I would want to start one to SBR one rifle? And in that case would I have to transfer my individual NFA items into the trust and would it be $200 tax each?

Click to expand...

Transferring NFA items you own already into the trust will incur a form 4 and tax.

If you already don't need the options a trust provides such as allowing other people access to your NFA items, then I see no reason to start a trust now.

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To expand on this a little, if you want the advantages of the trust for the SBR, there is no requirement to transfer items you already own personally to the trust.

As Tom said, if you want to be able to share the SBR with others without being present, a trust might for you.

IMHO:
Advantages:
- Ability for others to possess the SBR without your presence by including them in the trust
- If your trust is written in such a way that it exists after your death (mine is) the SBR will stay in the trust and not have to transfer (though a form 5 transfer on your death is tax free, it still has to happen)
- When you engrave the SBR, you use the trusts name and not your own. One of my trusts has no part of my name in the trust name.

Disadvantages:
- The cost of a well written trust by a knowledgeable attorney
- The added trouble with 41F

I still plan to use my trusts for all NFA.

pjeski said:

I don't know why so many people say that. I live in an area where most CLEO sign off, and yet every single NFA owner I know of has their items in a trust. I didn't even consider CLEO signoff in choosing a trust.

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Same here. My friends and I all did Trusts because there were no fingerprint or photograph requirements for Trusts. This took a couple steps out of the process and added a small layer of security in that the less personal information a rogue government agency has of you, the better.

The best reason for a trust has nothing to do with the Form 4 application.
It allows any member of the trust to be in possession of the firearm by themselves

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This.

Furthermore, it also makes things much easier should a trustee pass. Instead of NFA stuff going into probate and requiring someone to submit a form 5 to take possession of the NFA item (lest it be surrendered), with a trust, one of the other trustees can simply take possession of the item until final disposition is decided.

So there are still marked advantages to a trust, even though it's gonna be a bit more of a pain after July.

1KPerDay said:

Thanks, all. So: when 41F goes into effect, you can no longer simply write someone into your trust, correct? All members of a trust, or who are added to an existing trust, will have to be photographed and fingerprinted, right?

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Incorrect. This was brought up in another thread here in the NFA section:
http://www.thehighroad.org/showthread.php?t=799965

Particularly Aaron Baker's post #18 in that thread:

"In the proposed rule, ATF recognized that the composition of the responsible persons associated with a trust, partnership, association, company, or corporation may change over time. As a result, ATF stated that it was considering a requirement that new responsible persons submit Form 5320.23 within 30 days of such a change. ATF sought comments on this option and solicited recommendations for other approaches."

Ultimately, they decided not to include such a requirement in the new rule:

"After receiving several public comments on this issue, the Department is not requiring in this final rule that new responsible persons submit a Form 5320.23 within 30 days of any change in responsible persons."

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1KPerDay said:

And if I set up a firearms trust BEFORE 41F goes into effect, they don't... but then if I SBR or buy another NFA item for the trust.... do we all have to be photoed/fingerprinted for each purchase?

Thanks for your patience and help.

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Yup, all responsible persons. Though there is question as to what exactly a responsible person is (no one knows for sure).

It requires all responsible persons to submit fingerprints and photos every time a new item is transferred in.

If you create the trust, add the SBR, and never transfer another item in, you can add and remove trustees and beneficiaries as your trust allows, and it is not necessary to submit any info to ATF.

Only on new transfers.

1KPerDay said:

So.... if it doesn't require new members of a trust to be fingerprinted and photographed or whatever.... what exactly is changing again?

I'm obviously not understanding something.

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At this time if you file as a Trust you do not have to be fingerprinted or photographed.

Starting in July for new applications, you and everyone else listed on the Trust at the time of filing will have to submit them.

It will prevent hundreds of millions of deaths this year alone.

I have had a NFA friendly sheriff for several years, yet I went the Trust route. The reason I did & will continue is that all of my trustees are family members or my best of trusted friends. I did this so that they can possess and use my NFA items without me being present.

Starting in July for new applications, you and everyone else listed on the Trust at the time of filing will have to submit them.

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The sole intent of this rule is to prevent Trusts from being used. In my case both of my kids live out of State so the fingerprinting requirement is impossible to comply with.

Is the NRA or other organization working on this?

I plan on continuing to use my trust after 41F goes into effect.

Beneficiaries are generally not "responsible persons" according to the ATF. It depends how your trust is written and how 41F is interpreted, generally only trustees are RPs.

People who live out of state can get fingerprinted and send you the cards, so I don't see how it is "impossible to comply with".

BSA1 said:

The sole intent of this rule is to prevent Trusts from being used. In my case both of my kids live out of State so the fingerprinting requirement is impossible to comply with.

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Pretty sure you can have your fingerprints done in all 50 States..

IF I can add and remove people from my trust at will, Then I can remove folks from the trust before filing for any new NFA items and then add them again after said paperwork is finished. I'm sure this would not be looked on favorably by the Batfe, though.

Also, I think I've read that if you've added an item (and done the fingerprints for it), then you can add other items to the trust for two years without the fingerprint requirement. I wonder how that works if you've added a person to the trust during those two years.

For what it's worth, for my first silencer I did not use a trust. However, my next (I'm getting the paperwork around now) will be for a home defense rifle, and I'm going the Trust route so that my wife can use it if I'm away.

Darkbob - Yes you can add a Trustee after you've been approved. Remember a Trust is basically a business, companies hire employees all the time.

As far as the 2 year rule, the ATF clarified that this applies to Trust documents only, you will still need to be fingerprinted and photographed every time you submit for a new item. (We all thought the opposite and it's a bummer).

the only PITA I found with the trust VS Personal is needing engraving. but I found my guy so right now its far easier. Especially because the only person in my county who would sign the personal forms would ONLY do it for ONE dealer and not personally.

HRnightmare said:

the only PITA I found with the trust VS Personal is needing engraving. but I found my guy so right now its far easier. Especially because the only person in my county who would sign the personal forms would ONLY do it for ONE dealer and not personally.

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Your first sentence reads like you're trying to say you don't need engraving for personal (or trust, not sure).

I have no idea what your third sentence means.