To Trust, or not to Trust?

Discussion in 'NFA Firearms and Accessories' started by USAF_Vet, Dec 10, 2015.

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  1. USAF_Vet

    USAF_Vet Member

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    I'm hoping to set foot into NFA territory next in 2016, starting off with an SBR and eventually suppressing that.

    I'm going to Form 1 my AR pistol built up from Aero Precision receivers.

    Anyway, I know the benefit to an NFA Trust is ease of transfer for others on the trust. But for someone whose not going to transfer, lend, or otherwise not be in control of the NFA item(s), is the expense of setting up a trust really worth it?

    I know I can get a CLEO sign off, that's not an issue I'm worried about.

    I'll miss out on the opportunity to use the E-Form system... but again, that's not an issue I'm really worried about. I can wait.

    I'm married, but the wife won't shoot the potential SBR without me present. It's not like she'll take it out hunting, and she'll be well aware of the legal limitations of handling/ accessing the NFA items without me being present.

    Kids are also not an issue. They'll have no access.

    Now if situations change, I can always set up a trust later on down the road, and transfer them out of my name and over to the trust (assuming a $200 transfer for each).
     
  2. vtsteve

    vtsteve Member

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    If you have kids set up a trust. There are no disadvantages other than the cost of setting it up and it gives you more options down the road.

    The trust gives clear direction in what you want to happen to the items should you meet an untimely demise. Your trustees can keep the items without dealing with the ATF.

    One often overlooked advantage to a trust is that you can also put non-NFA items into it. Imagine this hypothetical scenario: A new "assault weapons" ban is passed that grandfathers in existing owners but restricts future transfers (think magazines as well). If they're owned by the trust, your offspring can continue to enjoy them well into the future because there won't be any transfer of ownership.
     
  3. yugorpk

    yugorpk member

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    You may be comfortable with your local sheriff having intimate knowledge of everything you own. I'm sure he's a straight shooter and he and his replacements will be that way forever. I'm not so cool with that.
     
  4. vtsteve

    vtsteve Member

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    How would the Sheriff, or anyone else for that matter have access to that information?

    If you have an intelligently drafted trust with assignment pages instead of a schedule A, nobody needs to know what property is assigned to it unless it you need to prove it in court for some reason.

    When I file a Form 1 for example, I fill out a separate assignment page with just the single NFA item on it and submit that with a copy of the trust. The declaration of trust document itself doesn't specify ANY property owned by the trust, merely that it exists and who the beneficiary is, etc.

    If I want to add non-NFA items I fill out another assignment form, get it notarized and stick it in the safe deposit box. That's it. The only other person that ever sets eyes on it is the notary.
     
  5. Theohazard

    Theohazard Member

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    Because the sheriff signed off on the Form 1, and one can only assume he read it before he signed it. And maybe he even made a copy.

    In post #3, yugorpk was obviously referring to a CLEO sign-off.
     
  6. yugorpk

    yugorpk member

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    Yep. On a form 1 your sheriff or local CLEO has to sign off on it . If you don't think they record that information on the form 1's submitted to them and that information could come back to bite you then thats good for you. You are a trusting person.

    On a trust its a whole different story. The local yocals don't know a thing about what you have. I'm more comfortable with that situation. Ive done 20 ish stamps on trusts over the years. I don't do it for estate planning as I could give a damn what happens to my stuff after I die. No matter what I want or what I tell her not to do my wife will still sell it at a a garage sale.
     
  7. Aaron Baker

    Aaron Baker Member

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    This is only true for special types of trusts. Most NFA trusts are revocable living trusts that only survive the grantor long enough to distribute the trust property to the beneficiaries. That's a transfer.

    If you want your trust to last forever, it has to be set up as a multi-generational trust, where your descendants aren't beneficiaries, but trustees. Although most (if not all) states have done away with the historical "rule against perpetuities" and would allow a multi-generational trust that goes on forever, there's really good reasons not to do it.

    For instance: you have 4 kids. Fine. That's easy. They can all possess the trust property, and maybe you raised them well enough that they won't fight over the trust in court. What about their kids? Or their kids' kids? How many people will ultimately have some right of possession under this trust, three or four generations down the road? If each child has four children and each of them has four children, that's 64 people just three generations later.

    And that's all for some hypothetical benefit of a future ban that grandfathers in current ownership but forbids transfers? Look guys--if "they" are after our guns, the only true solution is political, not legal. At least not legal in the sense of creating trusts to act as legal shields for untold future generations. You don't think they'd just amend the law to outlaw "assault weapons" entirely if someone was hanging on to theirs decades later using a trust?

    NFA trusts are useful, but they're not for everyone. Sounds like USAF Vet understands the pros and cons fairly well. So my only advice is: if you think you'll want one in the future, get it now. It saves you the extra transfer taxes. Otherwise, skip it.

    To me, for someone who has kids that might grow up to be shooters, it may be worth it because once your children are adults, they can be trustees and can borrow your SBRs, suppressors, etc. It allows them to borrow your cool stuff without you having to be present, or having died first.

    Aaron
     
  8. vtsteve

    vtsteve Member

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    Thanks Aaron, it's always nice to have some insight from a professional.

    I do understand the possible complications with using a trust, and that each situation is different. I just feel that having the property in a trust leaves more options open down the road. I have control over my trust and can amend it if needed. I can't say the same about the law.

    We do need to fight "them" on a political level, but having lived through the 94 AWB and seen some of the recent state level restrictions put in place behind enemy lines, I can't help but feel at least some of our freedoms might be on borrowed time. When it finally sunset in 04 (which I never expected to happen), I swore I would never get caught out in the cold again.
     
  9. Ryanxia

    Ryanxia Member

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    Having a Trust also lets you engrave your NFA firearms with the Trust name (could be something cool) rather than your personal name.

    Also once you have the e-file account, your information is saved so the subsequent NFA forms takes 10 minutes rather than being another whole process again.

    Just my 2 cents.
     
  10. pintler

    pintler Member

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    I'm not an NFA expert by any means, so corrections welcome.

    IIUC, absent a trust a spouse can't have constructive possession, i.e. if you're not home she can't know the combination for the safe. I'm going to assume you want your wife to have access to your main safe (mine certainly wants access to her personal guns :)), and that your SBR is valuable enough you want to store it in a safe. For suppressors, I've heard of people getting a small lockbox and keeping the suppressors inside the locked box, and the box inside the safe.

    But I'd think that's harder for an SBR, because the locked case is bigger. Especially if you like it and get another one someday. If you end up getting a second safe, then that's a cost. If you eventually decide it's too much trouble to keep things separate, then it's $200 per item to then transfer them to a trust.

    My point is that it would be easy to spend more than the cost of a trust trying to avoid the cost of a trust. Silencershop has their trust for $129. One from the Nolo (or whatever) books is cheaper than that. Even my gold plated custom one was $400.

    YMMV, but look at the costs of not having a trust as well as the cost of the trust.
     
  11. yugorpk

    yugorpk member

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    "Also once you have the e-file account, your information is saved so the subsequent NFA forms takes 10 minutes rather than being another whole process again."

    Ha ha Ho Ho . Only thing it saves is your personal information. Saves you 30 seconds filling out your address/ Filing and the firearms info still have to get filled out and it takes the same amount of time for approval. In any case it only works with a form 1.
     
    Last edited: Dec 11, 2015
  12. yugorpk

    yugorpk member

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    The spouse "constructive possesion" thing isnt really an issue. Never has been anyway. Its one of those "What if" thing that never happens.

    Paid $10 for my notary seal on my trust from quicken willmaker. Thats it.
     
  13. Aaron Baker

    Aaron Baker Member

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    Well, let's be clear. You're correct that no one seems to have ever been prosecuted for it. But that's not the same thing as saying, it's not a good reason to have a trust. It's absolutely illegal for your spouse to have possession of an NFA firearm that you own as an individual. It's not illegal if they're a trustee on your trust.

    Just because it never HAS happened isn't a reason to ignore the possibility that someone could be prosecuted for violating the law. It's important to educate people on these issues.

    I personally want to be able to leave my short-barreled shotgun leaning by the door. Having my wife on my trust lets me do that. I wouldn't feel comfortable doing it if she wasn't on a trust with me, even though the chances of the ATF kicking in my door are very slim.

    Aaron
     
  14. yugorpk

    yugorpk member

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    Its only legal for your spouse to have possession of the item if your trust is set up that way. Its not a given. Maybe you dont want your wife or kids to be able to have possession. I know if my ex wife had a gun around she'd probably have shot me with it. Maybe you get married to a person and forget to put her there etc.

    Valid concerns are those based on real circumstances. I know that if I drive over the speed limit that I might get a ticket so I look in my mirrors a lot. If I drive over the speed limit on my own property it MIGHT be technically illegal but no one is ever going to prosecute me for it. ( I know , terrible analogy. No speed limits on your property but I'm too lazy and a bit hungover to think of a good one ). The ATF doesnt prosecute people for constructive possession for having their NFA items laying around in their own home when they arent there. It doesnt actually happen. They would prosecute someone in that household if they took the NFA item out and used it or got caught with it to be sure.
     
  15. Aaron Baker

    Aaron Baker Member

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    I get your point. As I've always told people, there are a lot of things that are technically illegal, but if you have no reason to have the ATF kicking in your door, they aren't huge concerns.

    The thing is, though, that they're still concerns, at least in my book. I think it's all a matter of how risk adverse any particular person is. I think we're on the same page about that.

    As an example, I lived in rural Alaska for a few years. Although I never saw it in person, I certainly heard of people that owned illegal full auto weapons and shot them way out in the bush. We're talking about places where not only would you NEVER see an ATF agent, but you'd also never see an Alaska state trooper, local cop or even a VPSO (village public safety officer). Those guys knew that unregistered full autos were illegal, but they just didn't see a realistic risk of being caught.

    Me? Even in the furthest reaches of rural Alaska, I'd be too nervous to be in possession of an unregistered machine gun.

    Likewise, my wife is on my trust because while I don't think either of us will ever encounter the ATF (in our non-professional capacities, anyway), I still would rather have her on a trust than take the risk.

    For people who are as risk adverse as I am, it provides peace of mind, because I know I'm complying with the letter of law, so it takes the 0.5% risk of being caught down to 0%. Since there are other benefits to a trust, that cost for that risk reduction is justifiable.

    As I've always said, though, I don't think trusts are right or necessary for everyone. But I still see this aspect as a benefit.

    Aaron
     
    Last edited: Dec 12, 2015
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