Quantcast
  1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Should your trust have it's own bank account?

Discussion in 'NFA Firearms and Accessories' started by Singletracker, Feb 29, 2012.

Thread Status:
Not open for further replies.
  1. Singletracker

    Singletracker Member

    Joined:
    Dec 3, 2010
    Messages:
    41
    Location:
    Colorado
    Sorry guys for the N00b question but my buddy and I are just now getting our feet wet in the NFA world.

    We both went through Attny's for our trusts. Mine local, him through the "big name" guys.

    His attny, recommended he have a separate bank account for his trust. the reasoning being as the TRUST is buying the items and if he pays for his items/stamp(s) out of personal funds it is a defacto straw purchase/illegal transfer.

    My attny said no such thing. I've read that the Gov't doesn't care where it gets it's blood from so personal check is fine.

    An account for the trust is no big deal, just one more hoop.

    I would like to know your thoughts.


    Also (while I'm here) what is the legal age to inherit NFA items? 18 or 21?

    Sorry if this has been covered
     
  2. Slamfire

    Slamfire Member

    Joined:
    Dec 29, 2006
    Messages:
    7,777
    Location:
    Alabama
    I am not a lawyer, but a Trust is considered a person, so I think this guy is right.
     
  3. poolingmyignorance

    poolingmyignorance Member

    Joined:
    Jun 4, 2011
    Messages:
    108
    First and Foremost, I'm not a lawyer. I've never heard anybody anywhere mention such a thing. So lets think about this...a staw sale for a trust...whos back ground will they check? Does your trust require a social security number and birth certificate now too? You as a trustee, or grantor are only eligible to posses these items on the grounds that you are legally eligible to posses them.
    So then by purchasing them with your creditials and and the trust's money (it's bank account) your commiting a staw purchase for the trust..so now you and your trust are subject to persecution?
    Now having money in a trust that's untouchable for probate and debitors...thats never a bad idea.
     
  4. Aaron Baker

    Aaron Baker Member

    Joined:
    Mar 20, 2008
    Messages:
    695
    Location:
    Lexington, KY
    I am a lawyer, but I am not YOUR lawyer.

    I've never heard of this. Trusts do sometimes have bank accounts, but only if the trust actually owns money. NFA trusts are obviously not the only type of trust, so when you hear about someone who is a "trust fund" kid, then that trust almost certainly has a bank account.

    Your NFA trust, however, should not contain things that aren't NFA items, or at least firearms. It can, mind you. It just shouldn't. You could put your car in that trust, but why would you want your specialized NFA trust to own an automobile? A bank account follows the same logic.

    The wrinkle you're throwing in there is that the attorney is saying that since YOU are buying the gun, but your trust is owning it, then it's a "straw sale." Not to my understanding. There are two possible scenarios here, but the end result is the same.

    First, assume you already own a rifle and you're making it into a short-barreled rifle on a Form 4. You apply for the Form 1 in the name of the trust, and you transfer the property of the rifle to the trust. In your capacity as "grantor" or "settlor" of the trust, that's really your main job: you create the trust and then put property into the trust. Then in your capacity as trustee, you manage the trust property for the ultimate benefit of the beneficiaries. (In an NFA trust, that means that any trustee can possess the NFA items that are owned by the trust, and when the proper conditions of the trust are met, those NFA items are sold off or passed on to the beneficiaries.)

    The other scenario would be the purchase of an NFA item on a Form 4. Again, you have made the trust, as grantor, and you are also a trustee. In either capacity, you may act for the benefit of the trust. So when you pay for an NFA item and apply for the stamp on behalf of the trust, you're not acting as Joe Blow, individual. You're acting as Joe Blow, officer of the Joe Blow National Firearms Act Trust.

    A trust isn't actually an individual. It's a separate legal entity, sure, but it acts through its officers. Those officers are free to make purchases and then gift them to the trust, or they are free to make purchases on behalf of the trust using their own money.

    That's how I see it. But really, whatever fuzzy legal reasoning is needed, the fact remains that the ATF isn't worried about this stuff that I've ever heard of. No reason to go through the pain of having a bank account for the trust.

    Aaron (who, again, is a lawyer, but not your lawyer)

    PS If you really want to get silly, you could just think about the question this way: even if your trust had a bank account, wouldn't you be the person putting the money into that account? So how would that make any legal difference?
     
  5. mbogo

    mbogo Member

    Joined:
    Aug 11, 2010
    Messages:
    377
    Location:
    Las Vegas, NV
    The attorney who set up my NFA trust suggested using USPS Money Orders to pay for the NFA items and to specify the trust name in the "From" field.

    mbogo
     
  6. Ranb

    Ranb Member

    Joined:
    Dec 15, 2003
    Messages:
    896
    Location:
    WA, USA
    I use a personal check for all of my NFA items in my trust. Never heard of any problems from anyone else either.

    Ranb
     
  7. Patriot1/3

    Patriot1/3 member

    Joined:
    Dec 23, 2010
    Messages:
    64
    Location:
    America
    Money orders work just fine or a cashiers check.
     
  8. Walther P99

    Walther P99 Member

    Joined:
    Dec 24, 2002
    Messages:
    144
    Location:
    San Antonio, TX
    My attorney said it didn't matter. He actually told me to use a personal check so I'll know when the BATF cashes it.
     
  9. Aaron Baker

    Aaron Baker Member

    Joined:
    Mar 20, 2008
    Messages:
    695
    Location:
    Lexington, KY
    I'll second that. It's nice to know when the ATF has your money.
     
  10. rockn30809

    rockn30809 Member

    Joined:
    Dec 18, 2011
    Messages:
    58
    Location:
    South Carolina
    The lawyer that did mine suggested that I open a account for the trust. He said it wasn't a necessity but in case the feds decide to act funky one day it would help protect me and the trust.
     
  11. GoingQuiet

    GoingQuiet Member

    Joined:
    Jun 10, 2010
    Messages:
    375
    Location:
    Melbourne, FL
    How is this a firearm related discussion?
     
  12. Walther P99

    Walther P99 Member

    Joined:
    Dec 24, 2002
    Messages:
    144
    Location:
    San Antonio, TX
    The trust is for NFA firearms...
     
  13. Singletracker

    Singletracker Member

    Joined:
    Dec 3, 2010
    Messages:
    41
    Location:
    Colorado
    Exactly. As I stated in the original post. HIS NFA Attny said your trust needs an account So the Trust is purchasing the items.

    I just went and paid for my Sparrow and the dealer said the same thing. That the Trust should be applying for the stamp so the $200 check should come from the trust.

    I will do a cashiers check or MO "From" my trust.
     
  14. uvausmc

    uvausmc Member

    Joined:
    Jan 13, 2008
    Messages:
    143
    Location:
    Beaufort, SC
    Just got my trust set up. My lawyer recommended the trust bank acct too. They way it was put to me is that it is mainly just to cover your ass. If the trust "bought" the NFA item and the trust is the one that owns the item then there are no questions. It could cause issues if BATFE sees that a trust owns the item but someone else bought it. I did it just to prevent any potential problems later on.
     
  15. Azb

    Azb Member

    Joined:
    Aug 7, 2010
    Messages:
    67
    Totally unnecessary. Hundreds of thousands of NFA apps have been validated with personal checks and money orders. No issues.

    Your lawyers are estate lawyers and are basing their advice on estate trusts. Estate trusts involve huge amounts of assets worth enormous amounts of money. Monetary issues with these trusts are very tricky as much of the assets are non taxable. These trusts often compensate trustees and have all kinds of money flowing in and out for various reasons. Money flow is important to keep these trusts valid.

    Not so with NFA trusts. They are very simple. There is no money flow, so there is no point. Even if all your NFA items quadruple in value before you pass them on, it still won't be a decimal point on the tax issues of your typical estate trust.

    Don't complicate things. MOs work, afford privacy, and are secure. Sending a checking account number through the mail every time you apply for a stamp is a security risk for no reason.

    Az
     
  16. GoingQuiet

    GoingQuiet Member

    Joined:
    Jun 10, 2010
    Messages:
    375
    Location:
    Melbourne, FL
    Well on that merit, I should be allowed to discuss pickup trucks since my pickup truck is used to cart NFA firearms around.
     
  17. Walther P99

    Walther P99 Member

    Joined:
    Dec 24, 2002
    Messages:
    144
    Location:
    San Antonio, TX
    You're in the NFA subforum discussing the details of the trust needed (in many jurisdictions, the only way) to own NFA firearms.

    We're not discussing incidental details such as what we use to haul our firearms, etc., but specific details concerning how we can safely (i.e. without hassle from the ATF) own NFA FIREARMS.
     
  18. uvausmc

    uvausmc Member

    Joined:
    Jan 13, 2008
    Messages:
    143
    Location:
    Beaufort, SC
    You may be right but I wasn't as concerned with the money being used for the tax stamp as much as the money changing hands for the actual suppressor from the seller to the buyer.
     
  19. Aaron Baker

    Aaron Baker Member

    Joined:
    Mar 20, 2008
    Messages:
    695
    Location:
    Lexington, KY
    This is silly. You are an officer of your trust. You can act in your individual capacity, or you may act in your capacity as a trust officer.

    When you pay for an item to go into the trust, you're acting in your capacity as an officer of the trust. If your trust had a bank account, what would physically, actually happen is that you would be taking your own money and placing it into the trust's bank account, and by doing that, you're transferring ownership of that money from you to the trust.

    All that you're doing is adding a step by taking your money and putting it in a trust bank account, and then using that money to pay the ATF. You might as well pay the ATF directly. It's the same difference.

    Your trust is not earning its own money, so it's coming from you either way. You're not fooling anyone, including the ATF, and you're creating more hassles for yourself by having to manage an extra bank account for a trust that rarely ever does any banking.

    That's my position until someone shows me an instance where the ATF has ever hassled anyone otherwise. I paid for my (one and only) tax stamp with a personal check, and my SBR is held by a trust.

    Aaron
     
  20. wally

    wally Member

    Joined:
    Jan 2, 2004
    Messages:
    12,748
    Location:
    Houston, Tx
    I buy the guns and then put a signed and notarized statement giving all title and ownership to the trust in "Schedule A". When the stamp come back I "manufacture" the SBR for the trust as Trustee.

    With a suppressor the trust is buying and receiving it, where the money comes from doesn't ever seem to come up.
     
  21. Gtscotty

    Gtscotty Member

    Joined:
    Jul 2, 2007
    Messages:
    2,376
    Location:
    Wyoming
    Ok, I'm dredging this up to see if there has been any new news in this arena in the last three years.

    My trust is about to buy a .45 can, and I am curious if there is any reason to go to the trouble of setting up a bank account to do so, or if a personal payment from me ( the grantor) is really just as good.

    Has anyone heard of this ever being a problem? What are all the trust-holders out there doing?
     
  22. plodder

    plodder Member

    Joined:
    Jan 1, 2011
    Messages:
    508
    Location:
    Deep in a bunker behind the cheddar curtain
    I do use a separate bank account for my trust. Only because it was "said" that that is the thing to do. I am not a lawyer and did my trust on-line. So me even offering advice would be comical.
     
  23. Gtscotty

    Gtscotty Member

    Joined:
    Jul 2, 2007
    Messages:
    2,376
    Location:
    Wyoming
    http://www.thehighroad.org/showpost.php?p=9883424&postcount=10

    Looking around, I found this post from Aaron Baker, it makes sense to me anyway. What I'm talking about is buying a suppressor for the trust as grantor of the trust. It's not like I'll be buying and having a suppressor transferred to me, and then putting it in the trust, so I don't think I could see a reasonable way that this could be construed as a transfer or anything illegal.
     
  24. yugorpk

    yugorpk member

    Joined:
    Jul 9, 2008
    Messages:
    2,121
    The ATF doesnt care. Its a waste of time and money to set up a separate account.
     
  25. Aaron Baker

    Aaron Baker Member

    Joined:
    Mar 20, 2008
    Messages:
    695
    Location:
    Lexington, KY
    Since originally commenting on this thread, I have drafted hundreds of NFA trusts for clients. I've also built several Form 1 firearms and bought several Form 4 suppressors. I have not personally opened a bank account for my trust, and I've advised all of my clients not to bother. I use my personal funds to buy NFA firearms, and I use my personal funds to pay for tax stamps.

    There is simply no reason to get a bank account. Nothing of legal significance happens when you take your own money and place it into a bank account in the name of the trust before paying for trust property with it.

    Think of it this way: if you, as the grantor of your trust, can take money from your paycheck and put it in a "trust" bank account (and thus give it to the trust)... then why can't you, as the grantor of your trust, take a firearm and put it in the trust?

    As far as the law is concerned, there's no difference between money and guns. They're both just property. Your job, as the grantor, is to put property into the trust.

    Don't create extra work for yourself.

    Aaron
     
Thread Status:
Not open for further replies.

Share This Page