NFA ownership - Trust vs. LLC vs. Individual

[jbonnette]

I have a trust here in MS, but I dont think there are any material differences between the two states other than the length of time the trust can exist. You forgot to mention one pro of the trust. If written correctly any of the trusties of the trust can possess the items owned in the trust. I have a trust in place and my brother (who can legally posses a gun) is a trustee. The language in the trust states grantors and trustees have the rite to use any items controled under the NFA. This allows my brother to have the cans while I am not around. This has also been done with employees in an LLC but I have never dont that. The down side to owning it personally is that it has to always be in your site when in use.

I trust my brother with my stuff so its no big deal. I would not recommend doing this with a casual acquaintance.

Thanks, I added that to the top.

 

[Nolacopusmc]

If you have a Louisiana trust, it can't exist past 20 years of the childrens death, i.e. your grandchildren will have to deal with the transfer. Louisiana trusts are pretty simple.

Florida, Utah, North Dakota all have more... interesting trust structures, but there comes a point where it becomes more complex than need be for what we are trying to accomplish.

For a variety of reasons, I'm inclined to go the corporate route.

?????

If the intent were to pepetually keep them in the family, when I die and my beneficiary gets them, could they then create a separate trust with a couple more generations and then transfer then to that trust? And keep transferring from trust to trust?

 

[jbonnette]

?????

If the intent were to pepetually keep them in the family, when I die and my beneficiary gets them, could they then create a separate trust with a couple more generations and then transfer then to that trust? And keep transferring from trust to trust?

At the current time, it looks like the ATF does not allow you to use a Form 5 (tax free) to transfer NFA items from a trust to a beneficiary . Basically this means that when your trust ends (50 years after you die OR 20 years after your beneficiary dies), the beneficiary would have to transfer them to another trust or to himself... and it would cost 200$ per item. This is my main problem with a trust. In LA, it does not last long enough IMO.

 

[jbonnette]

Update on the trust term: The term is 20 years from the death of the settlor or the death of the beneficiary, whichever occurs last. The fifty year term only comes into play where none of the settlors or beneficiaries are natural persons.

 

[jbonnette]

Edit

 

[Nolacopusmc]

WTF?????

Dude, you have explain those charts. I seriously am just not that smart. LOL

 

[Nolacopusmc]

Damn......I hate it when he does that. If he is correct about the selling of the llc, then that would be the way to go.

But I have to believe someone would have caught how easy it would be to make some llc's just to nave some suppressors at a profit.

Pangris, could you provide some supporting documetion about the whole selling of the llc's?

 

[jbonnette]

Paul, your descriptions are much more convincing than my bullet points

Brannon, I realized that my charts were over-the-top so I updated one and replaced it in the previous post. Hopefully it makes more sense

 

[jbonnette]

Joel - your chart is good but I'm not sure if you could name the child and grand child as beneficiary, and then use 20 years after the grand childs death - that gets into "generation skipping" trusts, which I always left to the lawyers, and I'm not sure of the ins and outs or whether it would apply/matter.

Alternatively, put $200 into a bank account for the LLC for every item owned by it, stick it in CD's, and there is always a piggy bank for in there for any necessary transfers/fees.

I'll check on that. My understanding was that you could modify the trust as long as the settler was alive. So if a grandson was born, you could modify the trust to make them the beneficiary. I'll remove the chart until I can verify that.

 

[Nolacopusmc]

While this would probably not be an issue with an LLC created soley for the purpose of possessing ClassIII, would someone like me who has a legitimate business and put suppressors under that LLC, then open those assets up to future litigation and thus lost as well?

 

[jbonnette]

While this would probably not be an issue with an LLC created soley for the purpose of possessing ClassIII, would someone like me who has a legitimate business and put suppressors under that LLC, then open those assets up to future litigation and thus lost as well?

Yes. If someone goes after the LLC, all assets would be vulnerable. If I go the LLC route, I will be setting up a separate LLC.

 

[bayoutrigger]

LLC

1) A LLC is an artificial person. An artificial person LLC does not die unless the documents creating it provide for it's death or are amended to kill it. It can live forever.

2) An LLC can only act through real flesh and blood humans. Those humans have to be named in the LLC documents.

3) LLC documents have to be filed with the Louisiana Secretary of State and in the Conveyance records of the Parish where the LLC is listed as being domiciled. Every change to the LLC such as who is authorized to act for it must also be filed with the SOS and in the Parish records.

4) Each year a form must be returned to the SOS along with $75 for the privilege of having a LLC in Louisiana.

TRUST

1) A trust could conceivably last forever if drawn up correctly.

2) The trust ends according to when the trust document says it ends. If the trust is a revocable trust and does not provide for an end date it simply becomes an irrevocable trust at the death of the trust maker. It does not end unless it says at the death of the trust maker the trust assets are to then be given to the residual beneficiary. The trust assets are then treated by the BATF as though they were inherited by the beneficiary.

3) There is no requirement to record a trust with the SOS or in the parish records. Any changes to the trust likewise do not need to be recorded.

4) No fees have to be paid to the SOS for a trust.

5) As you want to add persons who can possess the NFA item owned by the trust simply execute an amendment to the trust naming that person as a trustee for the trust and also naming that person as a living beneficiary of the trust.

6) By amending the trust as circumstances change the trust can live forever.

 

[bayoutrigger]

PS: Want perfection?

Create an LLC to own the Class 3 weapon. If someone uses the weapon and kills or wounds somebody, although you own the LLC you do not own the weapon so the LLC gets sued and it's assets are at risk, not yours.

But what happens if you get sued? Well, if you put each NFA item into a separate LLC and then put all of your LLC's along with your other assets into an irrevocable asset protection trust, the party suing you can get nothing from you. All of your assets are protected in the asset protection trust. Also, as an added benefit, at age 65 you will qualify for Medicaid long term care nursing home benefits. So after your wife puts you in the nursing home, Medicaid will pay the $48,000 a year nursing home cost and your wife can use the $48,000 for cruises and fun while you are stuck in the NH.

 

[spanky]

I remember it being $75 also.

 

[bayoutrigger]

The SOS web site is showing annual fee as $25. However, last week I got annual renewal for a LLP and it was $75 so it looks like annual fees have gone up to $75 but the SOS web site still has not updated their fee schedule. The original filing fee is shown as $75 but this probably has gone up as well. We keep an updated fee schedule at the office and I'll check Monday.

 

[Bearco]

I remember it being $75 also.

The SOS web site is showing annual fee as $25. However, last week I got annual renewal for a LLP and it was $75 so it looks like annual fees have gone up to $75 but the SOS web site still has not updated their fee schedule. The original filing fee is shown as $75 but this probably has gone up as well. We keep an updated fee schedule at the office and I'll check Monday.

I just paid the annual fee for one of my LLCs yesterday and it was $25.

 

[Vsotok10]

Which of these 3 options would be best for an individual who wants to acquire an NFA item today but plans on moving to another NFA friendly state within five years?

 

[Hammar]

I just paid the annual fee for one of my LLCs yesterday and it was $25.

I believe the initial filing fee is $75 and renewal is $25.

 

[DuckYou]

FYI, It will be difficult if not impossible to insure an LLC that does not due anything other than hold class 3 weapons. You might get your neighborhood captive agent to write this, but when it comes time to paying a claim the insurer is going to be looking at why the company exists and what the applications say.

There may be some companies specifically providing coverages for class 3 llc's as I have not researched it.

 

[USMC0352]

I believe the initial filing fee is $75 and renewal is $25.

This is correct I just renewed mine for the 3rd time always $25