Creating A Trust To Own NFA Firearms

[Doc Holliday]

If your trust is held to be invalid for any reason, there could be major consequences for you. An invalid trust involving items regulated by the NFA could among other serious consequences, result in you being ordered to pay large fines, serve jail time. or both. If an attorney draws up your trust and it is found to be invalid, you at least have the opportunity to bring an action in malpractice against the attorney as long as you bring the action within 3 years of the date the lawyer prepared the trust. If you use general and sometimes inaccurate or inappropriate information concerning trusts and/or examples of trust documents found on the Internet you have no one to blame but yourself. Either way, it is you that will suffer any consequences of an invalid trust.

I think that this would be most everyone's concern...

I plagiarized the posted trust & had my personal attorney review it. His response was that it was a valid LA trust & that for the intended purpose it would be fine. I'm waiting for my second suppressor to arrive at my dealer & when it does, I'm registering it to my trust. I wish I had done it with my other 4 NFA pieces, instead of to myself as an individual.

Just an update to my post...

The transfer that I spoke about here went through without a hitch.

 

[grits]

If one is 18 and sets up a Trust, can he purchase NFA items from out of state?

No, it states you have to be 21 to purchase firearms.

 

[javery]

Another question. One if you set up a trust, have NFA weapons registered to it, then move to another state? Is the trust still valid and are the weapons still legal?

 

[noob]

Another question. One if you set up a trust, have NFA weapons registered to it, then move to another state? Is the trust still valid and are the weapons still legal?

i think you have to get your Trust amended and then notarized and then fill out a 5320.20 for a change of Permanent Residence for your NFA item as long as the state you're moving to allows NFA items. the 5320.20 is the same form you fill out for traveling with an NFA item.

i think it's much easier to move w/ a Trust.

 

[Nolacopusmc]

Once you create a trust, if you want to add trustees to it, is that something that has to go through a lawyer again and be filed?

 

[noob]

Once you create a trust, if you want to add trustees to it, is that something that has to go through a lawyer again and be filed?

i don't think so. i believe there's a sheet that should go w/ your trust for adding a trustee. you just need it notarized and you're set.

 

[James Cannon]

So a Trust is not required to be on file with anyone in the State, such as the Secretary of State, as is the case of an LLC?

As a Trustee, how would I purchase a firearm on behalf of the Trust? I see no way that I could buy a firearm from a dealer and put the Trust information on a 4473 form. That in mind, I assume that I would have to purchase the firearm as a an individual, myself, and then transfer this firearm I purchased to the Trust. This is correct?

My first delving into NFA Class III firearms is likely to be modifying a rifle to become a registered SBR and I want to set up a Trust involving myself with my son being a beneficiary upon reaching a mature age.

I'm just curious how a Trust becomes "official" so that it is legally binding. To simply have a written 'contract' notarized by someone seems a bit flimsy to me, or maybe that is the beauty/simplicity of the process.

 

[Mouthpiece]

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[bayoutrigger]

Actually a trust is not an artificial person such as LLC's & Corps. Artificial persons have to appoint real people to act for them. On the other hand, a trust is nothing more than an agreement between the Settlor and the trustee. LSA-R.S. 9:1731 defines a trust as "§ 1731. Trust defined A trust, as the term is used in this Code, is the relationship resulting from the transfer of title to property to a person to be administered by him as a fiduciary for the benefit of another."

See also, § 1781. Trustee defined "A trustee is a person to whom title to the trust property is transferred to be administered by him as a fiduciary.

As you can see from the above quoted sections of the La Trust Code, title is actually transferred to and vested in the Trustee to be administered by the Trustee as a fiduciary for the benefit of another. The official revision comments provide:
"COMMENTS--1964
2005 Main Volume

(a) This section makes no change in the law. The title to the trust property is in the trustee. Thus, the trustee has power to sell trust property, and he is under a duty to defend his title unless the trust instrument provides otherwise. Further, a creditor of a beneficiary cannot during the term of the trust seize the trust property itself. As to the seizure of the interest of the beneficiary, see Secs. 2004, 2005. The persons for whom the trust assets are administered for are called the beneficiaries."

For all practical purposes the trustee is nothing more than a middleman who takes title from the Settlor and agrees to administer the property transfered to him in trust in accordance with the provisions of the trust document and for the benefit of the trust beneficiaries.

Individuals who act as their own trustee are simply re-titling assets in their name to hold the assets in a fiduciary capacity subject to the terms of the trust and for the benefit of a third party. The practical effect is that nothing changes since an individual who creats a "self settled" grantor trust is acting as their own trustee and thus continues to own and administer the property placed in trust. That is why the IRS calls Grantor trusts where the Settlor acts as his own trustee to be "disregarded entities" for tax purposes and the Settlor/Trustee is not required to get a TIN for the trust but rather uses his own SS number and files a 1040 just as though the trust does not exist.

 

[cajunranger]

Does the name of the trust must include NFA Trust? Or can I go with something simple like (name) Holdings Trust.

 

[Barney88PDC]

Yes it can be what you want such as "Your last name Revocable Trust"

 

[Nolacopusmc]

Guys, I highly advise Mouthpiece as a resource if you would like to have a trust drawn up.

 

[cajunranger]

Roger, I'm using this template and then dropping it off for my lawyer to look it over. Maybe that way it will wont cost too much it laywer fees.

 

[bushym4a1]

so in regards to the sample forms at the beginning, the only document where you list what item/s you are creating the trust for is the Transfer to Trust form? no where in the actual trust do you list the items, right?
Also, what exactly is the schedule A, B, and C ?

 

[noob]

so in regards to the sample forms at the beginning, the only document where you list what item/s you are creating the trust for is the Transfer to Trust form? no where in the actual trust do you list the items, right?
Also, what exactly is the schedule A, B, and C ?

Schedule A = Schedule of Assets

this is where you post items that are added to the Trust.

 

[bushym4a1]

anyone know what the deal is with Schedule B and C?

 

[James Cannon]

So I can't find anything saying that you have to NAME your trust the "Something Something Trust" but it seems that -every- example and -every- person I know who's formed one, has named it the "Bob Smith Family Trust"

Do you -have- to include the word "Trust" in the name of your trust? I trawled through the law.justia.com site and read every relevant looking trust code section and found nothing to imply this.

Since this has to be engraved on any-and-every NFA registered Class III firearm, I'd rather have something simple and/or plain and SHORT to engrave, but want to make sure I watch my Ps and Qs.

I just dunno why people make the names longer than necessary. /shrug

 

[bushym4a1]

I feel like I read somewhere that a trust has to be printed front and back. Any word on that?

 

[chad]

Guys, I highly advise Mouthpiece as a resource if you would like to have a trust drawn up.

+1. While I don't plan on doing this for a while yet, Mouthpiece gave me some great advice a few months ago, and when I decide to make the plunge I will certainly be contacting him about a trust.

 

[yamatitan]

I feel like I read somewhere that a trust has to be printed front and back. Any word on that?

not true