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Posted: 12/26/2009 7:07:48 AM EDT
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I'm in the process of building a SBR with suppressor. Both of which will be register to me as an individual. Is it possible to later set up a trust and have these two items transfered into the trust. If so, how involved of a process is it.
I'm trying to decide if I need to put on the brakes and get a trust set up before I build this gun. However, that's an expense I wasn't planning on at this moment. If there was no trust at all; what would happen to my gun when I die? |
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Quoted:
Would need to do another F4 to transfer into the trust, including the appropriate taxes. If you own NFA as an individual and pass away, the items can be transferred tax-free to a designated heir on a F5. So what would I gain by having a trust? I was under the impression the trust was there to keep the weapons on the family. |
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Would need to do another F4 to transfer into the trust, including the appropriate taxes. If you own NFA as an individual and pass away, the items can be transferred tax-free to a designated heir on a F5. So what would I gain by having a trust? I was under the impression the trust was there to keep the weapons on the family. I'm new to this myself but I believe the advantage of the trust is that the guns are owned by it,so when you die the trust still owns them and your heirs,if listed as part of your trust,still maintain control/ownership of them. If you own a number of NFA items as an individual,when your heir sends in the F5 they they will have to do it for each device then wait and hopefully get approved,if not it gets turned in and destroyed?? This would'nt happen in a trust as the trust always owns them,it does'nt die. My question,to expand on yours,is this: If I die and my heir(s) send in a form5 for a tax exempt transfer,what happens to the weapons while the F5 is being processed? Can they legally posses them until they get the F5 approval,or do they belong to my estate and stay in limbo someplace,likethe local pd,state pd,some lawyers office etc etc?? |
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Quoted:
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Would need to do another F4 to transfer into the trust, including the appropriate taxes. If you own NFA as an individual and pass away, the items can be transferred tax-free to a designated heir on a F5. So what would I gain by having a trust? I was under the impression the trust was there to keep the weapons on the family. You have to transfer to the trust to begin with. If you already have the NFA items as an individual, it isn't typically worth it, unless you really want to allow their use by multiple individuals. The primary advantages to a trust are: - They can be written to allow usage of assets (NFA items) by multiple persons. - They avoid the need for CLEO signoff (et al). - They are easier and cheaper than creating a corporate entity (e.g., LLC). Quoted:
I'm new to this myself but I believe the advantage of the trust is that the guns are owned by it,so when you die the trust still owns them and your heirs,if listed as part of your trust,still maintain control/ownership of them. If you own a number of NFA items as an individual,when your heir sends in the F5 they they will have to do it for each device then wait and hopefully get approved,if not it gets turned in and destroyed?? This would'nt happen in a trust as the trust always owns them,it does'nt die. Trusts are not really perpetual like corporate entities. Trusts are started by a specific person (grantor) and are tied to that person during their natural life. After the grantor passes away (or based on other criteria) the trust property passes along in an established path, eventually falling into the hands of a designated beneficiary. AFAIK, the final transfer will incur a F4, as the property of the trust is transferred to the beneficiary. Quoted:
My question,to expand on yours,is this: If I die and my heir(s) send in a form5 for a tax exempt transfer,what happens to the weapons while the F5 is being processed? Can they legally posses them until they get the F5 approval,or do they belong to my estate and stay in limbo someplace,likethe local pd,state pd,some lawyers office etc etc?? I believe the executor of your will maintains possession; IIRC, they are the ones listed as the transferor on the F5. ETA - If you are truly interested in this info, consult an attorney. I am not a lawyer, and I am certainly not your lawyer. |
| Thanks for the info. Myself,I've only recently sent in my first form1 for a SBR. I may get a silencer for it,not sure yet. If I decide in the future to get into NFA stuff any further I may go the trust route but for now I'm just getting my feet wet. Going the indivdual route seemed to be the best for me at this time. |
Thanks for the info guys. I plan on talking to a lawyer after the holidays. I love the sound of having these items secured for my family after I'm gone, but I guess it will depend on how involved and costly of a process it is. Between Christmas and this AR build there isn't alot of extra money laying around.
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Thanks for the info guys. I plan on talking to a lawyer after the holidays. I love the sound of having these items secured for my family after I'm gone, but I guess it will depend on how involved and costly of a process it is. Between Christmas and this AR build there isn't alot of extra money laying around. Just a heads-up: If you file a Form 1 for an SBR ($200 tax) and Form 4 for a suppressor ($200 tax) now, and then you later set up a trust, you will have to pay two more $200 taxes to transfer the two items from you to the trust. That will make a total of $800 ($400 now, $400 later) in federal taxes. So if you are going to build an SBR and get a suppressor, decide first on whether you're gonna do it as an individual or a trust. It is WAY cheaper. 
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Trusts are not really perpetual like corporate entities. Trusts are started by a specific person (grantor) and are tied to that person during their natural life. After the grantor passes away (or based on other criteria) the trust property passes along in an established path, eventually falling into the hands of a designated beneficiary. AFAIK, the final transfer will incur a F4, as the property of the trust is transferred to the beneficiary.
This is not totally accurate. It depends on your state laws and how the trust is worded. In some states it is legal to establish multi-generational trusts. There are lots of options with a trust, but I highly recommend consulting with a lawyer before making it to intricate to ensure it is legal. |
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This is not totally accurate. It depends on your state laws and how the trust is worded. In some states it is legal to establish multi-generational trusts. There are lots of options with a trust, but I highly recommend consulting with a lawyer before making it to intricate to ensure it is legal. I've never heard of a trust where there is more than one grantor over its lifetime... and while trusts can be handed down though a multi-generational lineage of successor trustees, they _do_ have specific beneficiaries, unlike an arbitrary corporate entity. In this, they are not really perpetual. |
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So let me ask this in another way. I'll preface this by saying I'm not asking for legal advice, I plan to talk to a lawyer, I just want input from people who know more about this than me.
If I registered all NFA items as an individual and had a will leaving them to a person that would have no legal problem passing the background checks; all they would have to do is file paperwork to keep possesion of the NFA items? |
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So let me ask this in another way. I'll preface this by saying I'm not asking for legal advice, I plan to talk to a lawyer, I just want input from people who know more about this than me. If I registered all NFA items as an individual and had a will leaving them to a person that would have no legal problem passing the background checks; all they would have to do is file paperwork to keep possesion of the NFA items? Well, I'm not a lawyer, just someone who has dealt with this over and over during the past coupla decades ... so I will also reccomend you speak with a local attorney familiar with estate law in your jurisdiction. That said: A will generally names heirs, and an executor who is in charge of distributing assets to those heirs. An executor may also be an heir, AFAIK. When an individual who owns NFA dies and he has a will, the executor may legally take possession of the NFA assets until they are distributed to the heirs via Form 5's being approved by BATFE. If the executor is also the heir of the NFA assets, they may legally retain possession until BATFE approves the Form 5's transferring said items to them. |
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I'm in the process of building a SBR with suppressor. Both of which will be register to me as an individual. Is it possible to later set up a trust and have these two items transfered into the trust. If so, how involved of a process is it. I'm trying to decide if I need to put on the brakes and get a trust set up before I build this gun. However, that's an expense I wasn't planning on at this moment. If there was no trust at all; what would happen to my gun when I die? I hope you are THINKING of building a SBR. You cannot build one until you receive your approved form 1. Search this site and you will find the answers to questions you didnt know you had. Good Luck! |
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Quoted:
Quoted:
So let me ask this in another way. I'll preface this by saying I'm not asking for legal advice, I plan to talk to a lawyer, I just want input from people who know more about this than me. If I registered all NFA items as an individual and had a will leaving them to a person that would have no legal problem passing the background checks; all they would have to do is file paperwork to keep possesion of the NFA items? Well, I'm not a lawyer, just someone who has dealt with this over and over during the past coupla decades ... so I will also reccomend you speak with a local attorney familiar with estate law in your jurisdiction. That said: A will generally names heirs, and an executor who is in charge of distributing assets to those heirs. An executor may also be an heir, AFAIK. When an individual who owns NFA dies and he has a will, the executor may legally take possession of the NFA assets until they are distributed to the heirs via Form 5's being approved by BATFE. If the executor is also the heir of the NFA assets, they may legally retain possession until BATFE approves the Form 5's transferring said items to them. I like the sound of that. I will have to remember to cover that when I talk to a lawyer. If that is how it works that may be the best route for me. |
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you should also download and read the portion of this relating to estates: http://www.atf.gov/publications/download/p/atf-p-5320-8/atf-p-5320-8-chapter-9.pdf
Here's part of it: 9.5.3 Distribution of estate firearms. A decedent’s registered NFA firearms may be conveyed tax- exempt to lawful heirs. These distributions are not treated as voluntary “transfers” under the NFA. Rather, they are considered to be involuntary “transfers by operation of law.” Under this concept, ATF will honor State court decisions relative to the ownership and right to possess NFA firearms. So, when State courts authorize the distribution of estate firearms to decedents’ lawful heirs, ATF will approve the distribution and registration to the heirs if the transactions are otherwise lawful. A lawful heir is anyone named in the decedent’s will or, in the absence of a will, anyone entitled to inherit under the laws of the State in which the decedent last resided. 9.5.3.1 Distributions to heirs. Although these distributions are not treated as “transfers” for purposes of the NFA, Form 5 must be filed by an executor or administrator to register a firearm to a lawful heir and the form must be approved by ATF prior to distribution to the heir. The form should be filed as soon as possible. However, ATF will allow a reasonable time to arrange for the transfer. This generally should be done before probate is closed. When a firearm is being transferred to an individual heir, his or her fingerprints on FBI Forms FD-258 must accompany the transfer application. The application will be denied if the heir’s receipt or possession of the firearm would violate Federal, State, or local law. The law enforcement certification on the form need not be completed. The form should also be accompanied by documentation showing the executor’s or administrator’s authority to distribute the firearm as well as the heir’s entitlement to the firearm. Distributions to heirs should not be made until Forms 5 are approved. Executors and administrators are not required to have estate firearms registered to them prior to distribution to lawful heirs. |
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