Trust Question

[Keeperfaith]

Newbie question, I just obtained my trust. I went to the bank to open an account for the Trust. They kinda freaked out and didn't understand what an NFA Trust is, they kept saying this is new and/or they've never heard of such a thing...They didn't allow me to open an account becuase they one: didn't know what it's all about and two: my brother (a trustee) was not present (I totally understood).

What is the bank account for? My understanding is that it is just placing property under the name of the Trust to make it valid... Am I mistaken?

How/what do I explain to the bank employees this point (if I'm correct) so that they understand. They thought the account was solely for the purpose of buying guns. None of them had any idea what an NFA item is.

Do I need to use the bank account funds to pay for the tax stamp?

Thanks guys,
Steve

 

[Ditch-Tiger]

Each state and trust is different.
That being said, nothing says the trustee cannot pay on behalf of the trust.

 

[Keeperfaith]

I agree, there appears to be language stating that... I'm still looking into it.
Thanks

 

[pjeski]

if you got your trust from and attorney, they should be able to answer. If not, you will probably get more accurate answers from a gun owners forum specific to your state.

I have never funded my trust. Some people talk about finding it with a dollar to start it. makes no sense to me.

 

[zoom6zoom]

All they need to know is that it's a Trust. For their purposes, very similar to an LLC. Telling them it's an NFA or gun trust just gives them brain freeze.

 

[Keeperfaith]

The Trust I obtained was an on line form. I was totally under the impression that I submit my info, pay and then days later an attorney drafts the Trust and PDF file sends my Trust. Nope, I filled it out, paid and BANG, print it out...

SO, you live and you learn. But there reasoning behind putting $10.00 into the account is so the trust has property under it/in it therefore making it legitamite rather than just a peice of paper with no property under it.

Steve

 

[pjeski]

Again, that may be a state thing. My trust did not have to have any property to be valid. The first NFA item was the first property in the trust.

 

[Ditch-Tiger]

Just to be safe, I transferred $1.00 into it, laminated the dollar and filed it with the trust.

 

[medalguy]

What state are you in? That will help get a useful answer. My trust was first originated in Texas, and I never funded it. I Form 4 transferred a machine gun into it about a month after setting it up.

By the way, laminating a dollar bill might be construed as defacing currency, as noted on the BEP site:

Defacement of currency is a violation of Title 18, Section 333 of the United States Code. Under this provision, currency defacement is generally defined as follows: Whoever mutilates, cuts, disfigures, perforates, unites or cements together, or does any other thing to any bank bill, draft, note, or other evidence of debt issued by any national banking association, Federal Reserve Bank, or Federal Reserve System, with intent to render such item(s) unfit to be reissued, shall be fined under this title or imprisoned not more than six months, or both.

 

[Aaron Baker]

I have never funded my trust.

Actually, you did. Just not with money.

"Funding" a trust means putting property into it. So the first NFA item that is placed into the trust "funds" the trust.

The concern seems to arise because some people believe that before your first tax stamp is approved, the trust isn't funded (and therefore not yet a valid trust). I don't agree. If, for instance, your first tax stamp was for a Form 1 AR15 SBR, then as soon as you transfer ownership of the lower receiver to the trust (usually by placing it on a list of property, such as a Schedule A), the trust is now funded because it owns a lower receiver.

What if, on the other hand, your first purchase is a Form 4 item, such as a suppressor bought from a dealer? Then the concern is that until the transfer is approved, can you really list the suppressor in the trust as property that it owns?

My answer? Yes. Assuming one thing: that you have already paid for the suppressor. If a dealer owns a suppressor, and you pay him for that specific suppressor, then you (or in this case, your trust) has an ownership interest in the suppressor, even if the ATF has not approved the physical transfer of the suppressor to you (on behalf of your trust). So if you've paid for your suppressor, list it on your trust, and your trust is now funded.

I do not recommend that any of my clients bother to create a bank account for precisely the reasons the OP encountered: banks are scared by the idea of "gun" trusts creating bank accounts. And it's not necessary.

If you really buy into the "funding the trust" hype, then paperclip a dollar to the trust and list it on the trust's schedule of property as "US Currency, One Dollar" and if you're really excited about it, write down the serial number of the dollar. No need to laminate it. That's just too silly.

Also, not to sound like a jerk, but this is why it isn't unreasonable to pay an attorney to draft a trust. (And yes, some of us attorneys do our own work, as opposed to having a secretary or paralegal do it for us.) If you have an attorney, they can answer these questions for you in light of your specific state's laws.

Aaron

 

[pjeski]

Actually, you did. Just not with money.

I do not recommend that any of my clients bother to create a bank account for precisely the reasons the OP encountered: banks are scared by the idea of "gun" trusts creating bank accounts. And it's not necessary.

I used my bank's notary service when I signed my trust. The officer immediately offered to set up an account to fund the trust. She had no idea what an NFA trust was and did not seem to care. Now when I pick up a large-ish check they ask me what kind of gun I'm buying:

Also, not to sound like a jerk, but this is why it isn't unreasonable to pay an attorney to draft a trust. (And yes, some of us attorneys do our own work, as opposed to having a secretary or paralegal do it for us.) If you have an attorney, they can answer these questions for you in light of your specific state's laws.

Aaron

This.

My attorney answers questions like this that come up, so I don't end up asking on a forum. Also, Like Aaron, he frequents a large state gun owners club forum where he and a couple other very good attorneys provide information and opinions related to questions that come up.

 

[bikemutt]

I reviewed my Trust and found no indication that the Trust must have a bank account for any purpose.

All my NFA assets and tax stamps were paid for using either my personal checking account or credit card.

I did go to my bank initially because the Trust needed to be notarized, since my bank offers that service to me for free, that's where I went. The Notary skimmed through it, reviewed my ID, signed and stamped it.

Hope that helps.

 

[opto_isolator]

I've been reading this - one site I've read states: "When you have an NFA Gun Trust, do not pay for Title II firearms with your money. Always purchase Title II firearms with Gun Trust money."

I guess I'll need to discuss this with my credit union?

 

[Aaron Baker]

"When you have an NFA Gun Trust, do not pay for Title II firearms with your money. Always purchase Title II firearms with Gun Trust money."

I guess I'll need to discuss this with my credit union?

Why? Do you normally get legal advice from your credit union?

With the caveat that you should always discuss your gun trust with your state-specific attorney who drafted it, I don't see the concern here. You are the grantor of your trust. You ultimately retain control over the trust, as it is revocable. You can remove property from it (assuming you do the correct ATF paperwork) and you can certainly place property into it. (Duh, that's why you have it.)

There is absolutely no legal distinction between taking your own money and putting it into a bank account owned by the trust and then buying an NFA item with it, and just taking your own money and buying an NFA item with it.

If you're really concerned, because there isn't a legal title (or deed) for firearms, and you're afraid that a court might decide that you've somehow retained an individual legal interest in the trust property, then cover yourself by signing an "assignment of property" that clearly states that you've given all interest in the item to the trust.

But your money is your money, regardless of whether you use it to buy trust property or put it into the trust's bank account. No legal distinction at all. It isn't magically transmuted by putting it in a bank.

Aaron

 

[Ryanxia]

Why? Do you normally get legal advice from your credit union?

With the caveat that you should always discuss your gun trust with your state-specific attorney who drafted it, I don't see the concern here. You are the grantor of your trust. You ultimately retain control over the trust, as it is revocable. You can remove property from it (assuming you do the correct ATF paperwork) and you can certainly place property into it. (Duh, that's why you have it.)

There is absolutely no legal distinction between taking your own money and putting it into a bank account owned by the trust and then buying an NFA item with it, and just taking your own money and buying an NFA item with it.

If you're really concerned, because there isn't a legal title (or deed) for firearms, and you're afraid that a court might decide that you've somehow retained an individual legal interest in the trust property, then cover yourself by signing an "assignment of property" that clearly states that you've given all interest in the item to the trust.

But your money is your money, regardless of whether you use it to buy trust property or put it into the trust's bank account. No legal distinction at all. It isn't magically transmuted by putting it in a bank.

Aaron

Just wanted to say thanks for all the work you do on here, lots of good information I've read up on (mainly in the stickies). When I setup my NFA trust I was told to do an assignment of property on each item so there was no question, and didn't have to setup a separate bank account, glad to hear you agree.

 

[tepin]

No account needed. Get a USPS money order and in the "from" field enter your Trust name.