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NFA Trust: "ATF takes longer and diggs deeper into your background to discover why"?

Discussion in 'General Gun Discussions' started by brighamr, Jul 21, 2008.

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  1. brighamr

    brighamr Member

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    It is my joy in life to finally be in the middle of purchasing my first NFA item. (A YHM can for those who care). In any event, thus far it has been 3 months since I origionally paid for the can.

    I had to have it transferred to a class III dealer first, because none of the dealers in my area stock anything. Then 3 months later after the transfer went through, and the CL3 received my item, he asks me why I'm using a trust?

    The CL3 basically stated: "BATF knows why you're using a trust, usually it's because something on the local law enforcement level is holding up a regular CLEO signoff. As such, they'll take at least 2-4 weeks extra time digging into your background to identify your reason. I suggest you just go through your CLEO as it saves a lot of time. Also, if state law ever changes and your trust is voided, you wont own the item. You'll have to get rid of them as fast as possible."

    OK, I have a CWP and have been cleared for an FFL, which basically means there's nothing on the local or federal level keeping me from buying NFA. In fact, the only record on my record is a speeding ticket from long ago. I went the trust route because I don't feel it necessary to be finger printed and photographed, and make an extra 80 mile round trip every time I want to buy a suppressor (40 miles each way to the court house). I don't care about any "extra time" BATF will take.

    All that aside, is this CL3 just a moron? Or do any other CL3's tell their clients the same thing?

    At this point, I'm thinking my next NFA purchase will be routed through a different dealer...
     
  2. Kharn

    Kharn Member

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    The NFA branch doesnt do the background check, the FBI does. The trust route is also several weeks faster than the individual route since the FBI isnt running your fingerprints.

    They verify the legality of the item at your location regardless of individual or trust, and they know that many CLEOs do not understand the process and will not sign.

    But, you do risk a change in the law voiding the ability of a legal entity to own firearms, at which point you'd need to get a pile of CLEO signatures and pay a new $200 tax for every item being transferred into your own name as an individual. If the CLEO will sign, that's the route you should go.

    Kharn
     
  3. PTK

    PTK Member

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    Utter and complete BS... the NFA trust route, just like the LLC route, is perfectly legal. As stated, they verify the trust/LLC is legal, verify the state laws re:NFA, and have a NICS check done on you by the FBI. Remember, you are the grantor/trustee of the trust, so they still have the individual name to check.


    Basically, your C3 dealer is being... odd.
     
  4. brighamr

    brighamr Member

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    Kharn - appreciate the explanation.
    PTK - that's what I figured, thank you.

    I realize the trust route is completely legal, and in my case (planning to buy multiple items) it will save me about $400 in gas alone, not including taking time off work to see the CLEO.

    Looks like I'll be searching for a better CL3 for the next transfer. If anyone can recommend one in south west montana, or south central I'd appreciate it :)
     
  5. redneckrepairs

    redneckrepairs Member

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    You nfa guys dont want my opinion of the " corperation/trust /llc set up purely to purchase items . Of course this assumes a level playing field on the CLEO approvals and such . I have a corp , and an llc . however any nfa i would do i would do first as being ME .
     
  6. ctdonath

    ctdonath Member

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    To each their own on self vs. trust NFA transfers.

    Sounds odd that it's allegedly taking so long; IIRC trusts usually get processed faster. Go ask on one of the NFA boards (subguns.com, silencertalk.com) for better interpretation.
     
  7. Correia

    Correia Moderator Emeritus

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    I'm an NFA dealer.

    I'm not aware of anything official at ATF that changes the amount of time.

    But here's the thing. Your dealer might not be crazy. Just because something isn't official, doesn't mean that it doesn't happen, or he hasn't seen it happen.

    CLEO signature is easy in Utah, so we don't get very many trusts buying stuff. However, we do get some, but I'm not aware of any significant difference in processing time. Right now, everything in our region is being slow.
     
  8. brighamr

    brighamr Member

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    Correia,

    That's the funny thing. CLEO signoff's here are pretty simple as well, but this guy says the only people who do trusts are trying to get around their criminal background??? that just strikes me as odd. Thanks for your perspective, I appreciate it.
     
  9. Ltlabner

    Ltlabner Member

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    Here in SW Ohio the only way to get cans, SBR's, etc are via the trust/LLC.

    The CLEO of Hamilton and Clermont county have made it clear they will not signoff on anything.

    As such, the trust/LLC dance for classIII stuff is pretty comon in this area.
     
  10. feedthehogs

    feedthehogs Member

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    I'm sure most would avoid the additional expense of setting up a trust or paying yearly corporate state fees if the local cleo would sign off.

    Problem is the way the statement is written, the cleo does not have to sign even if they know of no reason why you shouldn't own a class 3 item. This leaves a cleo to invoke his/her personal beliefs on whether civilians should own such items.

    The wording needs to be changed as to command the cleo to sign if they know of no legal reason you should not own a class 3 item.

    My local cleo and his past alumni have purely stated that they will not sign claiming thru the authority of the dept legal advisor that they could be held liable if one were to do harm with said item and they approved it.

    One individual even went to court and had a judge issue a writ of mandamus to sign and the cleo refused. Nothing ever came of it and everyone uses a trust or corporation.
     
  11. MikeB

    MikeB Member

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    Sometimes a trust/llc transfer has nothing to do with avoiding dealing with the CLEO signature. It's the only way a group of people can legally share an item. We have an LLC for our family purchases. This way anyone in the immediate family, all named officers of the LLC; can legally have the item/s in their possession.
     
  12. DoubleTapDrew

    DoubleTapDrew Member

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    I'd like to start doing a trust to avoid losing a day's pay to go to the CLEO, paying $15 each for 2 fingerprint cards, and a few bucks and another hour or so for passport photos, go back and pick it up when the CLEO has signed it. Add that stuff up and it's almost as much as the tax itself. Plus your family members can't use it or even transport it without you being there.
    It would suck to have to transfer all the stuff to yourself if they changed the laws though.
     
  13. TexasRifleman

    TexasRifleman Moderator Emeritus

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    There are much bigger reasons to go the trust/corp route than the CLEO signoff.

    [QUOTEDoubleTapDres]Plus your family members can't use it or even transport it without you being there.[/QUOTE]

    BINGO

    The biggest advantage is who can possess the items.

    In an individual tax stamp only the named individual can be in possession of the item. With a trust/corporation any of the named officers can be in possession (as long as age and other things match up).

    That can potentially be huge.
     
  14. Vegaslaith

    Vegaslaith Member

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    Does anyone know of any time when laws have actually changed and Trusts were no longer a valid way to own NFA items?
     
  15. Sebastian the Ibis

    Sebastian the Ibis Member

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    LLC's and trusts can be set up in state where you do not live, and they are a common tool for keeping houses out of state intestacy law.

    Therefore it would seem that it would make sense to set up a trust in a gun friendly state so that they don't meddle with the trust/ corporation law.

    Has Anyone thought about this?
     
  16. CDignition

    CDignition Member

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    NFA law will never change. Hasn't since 1934. My trust took 28 days mailbox to mailbox.. usually in the summer, people are taking Vacations and such, so Im sure they are slower than usual.
     
  17. DoubleTapDrew

    DoubleTapDrew Member

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    Except 34 years later in 1968, then 18 years later in 1986, 22 years ago. We are due for another change, but hopefully for the better this time.
    If more people had to go through the same hoops with something more commonly owned like a vehicle or kitchen knives, there would be serious outrage.
     
  18. brighamr

    brighamr Member

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    Hi Everyone!

    Today is October 30th. My trust is still pending.

    Just thought you'd like an update. If anyone else here has recently purchased/recieved an NFA goodie, can you share how long your transfer took and if it was trust/self/llc?
     
  19. OcelotZ3

    OcelotZ3 Member

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    I had a SBR inheritance transfer take about 30 days near the end of last summer.

    Another double transfer of an M16 & M14 (from the same estate to an external buyer) took >2 months to go through, and that was done a few months after the in-family estate transfer. And the buyer already had a number of NFA items.

    Both were estate -> "self"
     
  20. MGshaggy

    MGshaggy Member

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    The NFA Branch is indeed looking closer into trusts than they did a couple years ago when the practice first started. No longer will a simple certificate of trust suffice; they now require the full declaration so they have a copy of the terms of the trust for their files. A bit of free legal advice - if you use a trust or corp, retain a lawyer in your state to make sure you've complied with all necessary formalities in creation of the trust, and have not inadvertantly created a trust subject to invalidation for something such as merger of the parties (I've seen that a couple times with friend's trusts). A technically invalid trust may be approved for an NFA transfer, but if/when the NFA Branch looks closer at the trust, you may be in for a very unpleasant surprise.

    And lets be honest here - BATFE is not going to get any more friendly to the NFA crowd, and most likely will be much more belligerent under an obama administration; you don't want to give them a reason, like an invalid trust, to come after you. As I understand it, Ken Houchens, who was pretty good to the NFA community as acting director of NFA, is now gone from the helm of the NFA Branch, and the new director is far more anti-gun.

    An off the shelf software package is a good start, but a trust is a legally binding document and you should know and understand all the terms of your trust. Also, trust law is a creature of your state law, and it is subject to changes by the legislature and by developments in the caselaw of your state. While a trust is a good vehicle for holding NFA assets, its not difficult to screw it up if you don't know what you're doing. Do your due dilligence and make sure you've got it right; an hour or two of lawyer time could save you a lot more in the long run.
     
  21. Flame Red

    Flame Red Member

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    I am no lawyer so you get what you paid for, but I understand that NFA trusts are only valid in the state they are setup. You cannot take your NFA to another state, unlike 'individual' that can be moved to another state with another form.. That is one of the big differences between 'individual' and 'corporate' form 4's.

    I believe the extended delays are because of the large backlogs of NFA transfer that is swamping them because of the pending Coronation of His Highness, the Obomination.
     
  22. taliv

    taliv Moderator

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    dunno, dude, but I've transfered a MG and two cans since july. I think you're getting screwed.
     
  23. brighamr

    brighamr Member

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    Called today. Got approved on 10/28.

    I'm tending to agree with this statement:
    Another funny thing, when I origionally called for status check last month, the lady asked my serial then sent me back to the investigator. When I called today, the guy asked for my serial, the make, who it was going to, and basically dragged it out as long as possible before telling me it was approved.


    Taliv - were your transfers trust/corp/individual? I'm trying to figure out if wait times are effected cause next month I plan to buy several NFA goodies.

    I'll update again when the paperwork actually gets here.
     
  24. MGshaggy

    MGshaggy Member

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    I don't think the coronation of 'Glorious Leader' has anything to do with it. Typically backlogs with NFA approvals have to do with either backlogs at the FBI in checking fingerprint cards (NFA approvals take a back seat at the FBI to criminal investigations and NSA/DHS needs), or simple laziness/ineptitude/political hackery at the NFA branch. In my experience, things have been noticably slower since Ken Houchens left early this year. Last year I had a couple MGs and suppressors returned in less than a month. My last NFA transfers a couple months ago (a SBR and another suppressor) have surpassed the 3 month mark.
     
  25. damien

    damien Member

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    I say give the ATF that extra work to do. Keeps them out of everyone else's hair.
     
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