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Thread: School me on the process of using a Trust for NFA items?

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    Smile School me on the process of using a Trust for NFA items?

    I've only recently learned of this method to obtain NFA items. It sounds like a much easier and quicker way than doing the cleo sign off and background check. The Quicken Wills way sound like a great way for a do it yourself person to do go about it. Read alittle bit about the process online, but I'm sure it's different in every state. Please take me through the Alaskan process, from step 1 too being able to shoot with NFA. I'm interested in a can and sbr down the road. Thanks!

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    There is a lawyer named David Goldman in Florida who is an expert on firearms trusts and he co-counsels with other lawyers all over the US. You could Google his site to learn much more.

    You may think that your are doing the right thing by going DIY with a form in a software program, but usually these forms are wrong. I recently saw an analysis of will software in Consumer Reports. Most of them were not only wrong but achieved contrary results from those desired. How would you tell the difference?

    Trying to get it done for free, you maybe should consult a Fed. I wouldn't pass along free advice on such a matter and I don't know who would.

    Some lawyers say they make more money by cleaning up after DIYers, but in this case you are probably talking about a felony.

    Norm
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    Quote Originally Posted by paulinAK View Post
    I've only recently learned of this method to obtain NFA items. It sounds like a much easier and quicker way than doing the cleo sign off and background check. The Quicken Wills way sound like a great way for a do it yourself person to do go about it. Read alittle bit about the process online, but I'm sure it's different in every state. Please take me through the Alaskan process, from step 1 too being able to shoot with NFA. I'm interested in a can and sbr down the road. Thanks!

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    Paul,

    Not bad advice from Norm.

    I am NOT a lawyer thank God and I don't play one on the web, but many of my customers have gone the trust route with Legal Zoom.com. Also, most NFA/Title II dealers should be able to walk you thru the process....better than you will get on the web.

    The key to ATF acceptance of the trust is for it to meet all of the legal requirements in the state in which the NFA transaction will take place. For that reason, it may well be better for you to seek out a knowledgeable attorney in AK to make sure the trust is meets the legal requirement. It is my understanding from ATF that any legal trust can be used for NFA items. You can call the ATF NFA Branch in Martinsburg, WV (304-616-4500) and get the straight skinny from them.

    Also, I am handling the sale of guns in an estate of a former customer who had NFA items in a trust and his wife is an administrator of the trust so she can act for the trust in place of her dead husband. Makes life for those left behind much easier and ATF won't take your NFA stuff.

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    I will be doing a thread about a layer in town who will be working with us in NFA trusts. I will be submitting mine to ATF shortly

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    There are obviously different opinions, but I think Anjin is right, you need a lawyer. It may sound "like a much easier and quicker way", but if it was so easy don't you think everyone would be using trusts? Trusts (of all kinds) are great tools, but it's way too easy to make a mistake. Learning how to set one up yourself is a full time job. Even after you set them up, you still need to maintain them properly. I've owned various assets through trusts for years, and it's still a lot of work and expense to maintain them. In comparison, a signature and a background check are the easy way to go!

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    Quote Originally Posted by Wildalaska View Post
    I will be doing a thread about a layer in town who will be working with us in NFA trusts. I will be submitting mine to ATF shortly
    I am looking forward to it, especially if the $200 you mentioned earlier is still pretty close. Personaly i dont have a lot of fear regarding Quicken trusts and the like for NFA items. The sheer volume of Quicken NFA trusts should be an obvious indicator that they are satisfactory for the requirements of BATF. whether or not the wording is sufficient and correct to allow seamless transfer of assets upon ones demise... now that's something all together different.

    That said, failing a timely posting from Ken and his Trust lawyer, i plan to go the Quicken route with some specific NFA language added.
    “You’ve gotten soft. You’re like one of those police dogs who’s released in to the wild and gets eaten by a deer or something.” Bill McNeal of News Radio

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    Folks, I would add that the report on wills that I cited (which showed that DIY packages -- including LegalZoom -- in all but the very simplest situations got serious issues wrong) was in a thread about LegalZoom.com and the dangers of using it. The report was in Consumer Reports and they got Gerry Beyer, a nationally renowned trusts and wills expert law professor, to review the forms.

    Personally, I would be very afraid of LegalZoom. Take a close look at its website. Especially its disclaimer of responsibility that says that it is NOT providing legal advice and LegalZoom takes NO responsibility if you use the forms in a way that you lose money (or all your guns -- and the right to own any in the future) or violate the law. I have not read it, but that is what was reported to me.

    Again, they offer general forms and they recommend that you consult a lawyer. Lawyers are not only trained, but they are licensed to meet standards of professional responsibility. Otherwise, anyone could do it. They also carry malpractice insurance to protect their clients.

    Of course, I am a lawyer myself, so I have a stake in the argument, but you likely would not hear of this danger if I did not mention it. I see so many screwups. It is fine to be a rough, tough Alaskan who sucks it up and extracts his own teeth, if you really wish. Most of us, including me, are quite self-reliant and positively love to do things ourselves. However, I draw the line at complex areas I know nothing about, such as, say, prostate surgery.

    You would be facing a serious Federal felony if you get it wrong, especially if you are holding Class III weapons or suppressors. I have not researched this and of course I am not offering legal advice, but think about it:

    Do you really want to give the BATF an excuse to go after you, and they surely will, or an excuse for them to justify the BATF's existence? I wouldn't. I think they are a hopeless bunch of stumblebums and the entire agency should be abolished, but I am not going to take them head-on over a possible slam-dunk violation. I absolutely would not rely on their giving you a pass.

    If you really want such a trust, do it right. The legal fee is well worth your being able to know that you won't hear the loudspeaker in the night telling your family to come out with their arms up.

    As Lowrider says, these trusts are especially helpful in keeping guns in the family if you die, rather than having them confiscated.

    Norm
    American Lawyer In Japan

    Quote Originally Posted by Lowrider View Post
    Paul,

    Not bad advice from Norm.

    I am NOT a lawyer thank God and I don't play one on the web, but many of my customers have gone the trust route with Legal Zoom.com. Also, most NFA/Title II dealers should be able to walk you thru the process....better than you will get on the web.

    The key to ATF acceptance of the trust is for it to meet all of the legal requirements in the state in which the NFA transaction will take place. For that reason, it may well be better for you to seek out a knowledgeable attorney in AK to make sure the trust is meets the legal requirement. It is my understanding from ATF that any legal trust can be used for NFA items. You can call the ATF NFA Branch in Martinsburg, WV (304-616-4500) and get the straight skinny from them.

    Also, I am handling the sale of guns in an estate of a former customer who had NFA items in a trust and his wife is an administrator of the trust so she can act for the trust in place of her dead husband. Makes life for those left behind much easier and ATF won't take your NFA stuff.

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    I cant speak for or against LegalZoom and unlike Anjin I am NOT a lawyer, but I do think that some of you folks are making a mistake by looking at and comparing a trust set up specifically for NFA items with a trust set up for other significant assets such as real estate. Wills are another matter entirely and I wont discuss them here.

    After researching this topic extensively for more than a year, I have made some observations, formed a few personal opinions and came to a couple of conclusions that I will share for you guys…

    Observation: Many if not most people interested in NFA trusts are primarily looking for a way to avoid the CLEO signoff and associated paperwork and fees. A secondary benefit that is often mentioned is that with a NFA trust, there can be multiple trustees that can have access to and posses the items owned by the trust. Then there is the ability to easily transfer your NFA items onto your heirs upon your passing.

    observation: Lawyers rely on clients in order to generate capital. A common lawyer “tactic” is “fear mongering” were said lawyer provides prospective clients with all manner of possible dooms day scenarios with terrifying repercussions and consequences.

    observation: Lawyers that specialize in, and are intimately familiar with NFA trusts, rules, policies and procedures are exceedingly rare, difficult to find and generally expensive to deal with.

    observation: If boiler plate “Quicken” type do it yourself NFA trusts were illegal, or invalid, the BATF would (and do) reject said trusts, and NOT issue the tax stamp until such time that the wording of the trust has been corrected to their satisfaction.

    observation: Lawyers use templates too! (gasp.. say it isn’t so!) What makes you think for one second that the template a lawyer is going to use to draft your NFA trust is in any way significantly different from a Quicken trust that you do yourself adding some important, but easily obtained NFA specific language? It is my opinion that they do NOT differ significantly at all. Other than the one drafted by your lawyer is costing you between 6 and 10 times as much money…

    observation: The BATF issues THOUSANDS of tax stamps to Trusts every month. Tens of Thousands every year. Now tell me, just how many “bad” NFA trust have resulted in prosecution? Anybody?.... well, have a look on BATF’s web site, do some Google searches, and other than a single case mention on David Goldman’s web site (that was later thrown out) I cant find any! Try poking around on some of the more prominent NFA type forums http://www.silencertalk.com/forum/ http://www.subguns.com/ http://www.firearmstalk.com/forums/ and many others and see just how many topics relate to NFA trusts, and how many of those topics mention credible instances of individuals being prosecuted for having an invalid or “bad” NFA trust…. One would think that if there was a significant number of “bad” trusts resulting in prosecutions, that the web would be chock FULL of such examples.

    Opinion: The BATF is NOT going to issue a tax stamp to an invalid trust. They WILL kick the trust back and ask you to correct it.

    observation: Lots of folks, when it comes to discussing NFA trusts and Lawyers like to use the “doctor” analogy. It is my opinion that this analogy isn’t at all accurate… a simple NFA trust is not an overly complex document. Certainly not akin to performing surgery or some other complex medical procedure, and to insinuate that it is, is simply ridiculous and should be insulting to anyone that has even the most rudimentary experience at filling out documents. If you can comfortably and confidently fill out routine documents such as tax forms, school enrolment forms for your children, job applications, PFD application and the like, then what makes you think for one second that you are so inept and ignorant that completing a do it yourself NFA trust is completely beyond your ability?! If you take the time to really research this topic and read the myriad of information out there, and determine what is credible and what is not, then it is a simple matter of following the instructions, inserting some specific NFA language and submitting the required forms with the required payment.

    So what is this “NFA specific language” that you would need to put in your Quicken trust? Well I am not going to spoon feed all of it to you as you can and should do your own research and become intimately familiar with the process and requirements on your own anyway, but I will say that there are a couple of things that will create serious problems with a NFA trust, and you should carefully word you trust documents to avoid these.

    There is one problem that typically as a fiduciary obligation of trustees is that they may not do anything that would depreciate the value of the trust assets, unless that liability is specifically limited. So if the trust owns a machinegun or suppressor for example, there would need to be some wording that their use by a trustee does not constitute or result in depreciation of the item in question.

    issues that arise when you die or if you become ineligible to possess NFA items aren't usually addressed by standard trusts. If you die and the property is automatically given to your heirs, and they aren't eligible to own NFA items, what happens then? There's contingencies to think about.

    The ATF isn't going to care about certain aspects of your trust. If your trust automatically gives your NFA items to any surviving heirs, the BATF isn't going to spin out every possible scenario to figure out if that might cause problems. They're fine with leaving NFA items to heirs. But once you actually die, and your 5-year-old son or convicted felon brother is suddenly the legal owner of a machinegun, the BATF will care. That's why you have to be careful with trusts. They're like wills--it doesn't matter what they say when you're alive, and good lord knows how screwed up they can be once you're dead and can no longer fix them.


    It is my opinion that do it yourself NFA trusts like the Quicken trust are not for everyone, but to say that they are inadequate or unsatisfactory in any way for use with NFA items when properly worded, is incorrect and those proposing such are simply ignorant or practicing fear mongering for their own financial benefit. If you have more time, knowledge and patients than you have money, then a do it yourself NFA trust might be a great way for you to go. If you have a lot of spare cash on hand and prefer to pay a lawyer to draft a trust for you, then by all means please proceed! And good for you!

    Personally I am lazy enough that I am willing to pay a couple hundred bucks for a lawyer to do all of the work for me. Now a lawyer that charges $600 to $1,000 for an NFA trust…. Yeah…. NO! I aint THAT lazy, when I am confident that I can do the EXACT same document for less than $100 and I will gladly use the money I saved to buy another suppressor.

    As always, the above diatribe is simply my opinion and should never be construed as advice, instructions or legal advice. Do your own due diligence, read the rules, laws and regulations and make your own informed decision based upon good information and the facts.
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    If you haven't done any estate planning, i.e. a will and trust, it just might be time to go about doing that, and then you'll have the trust you can use for your NFA items.

    My wife and I have been putting it off for years, but finally got around to going through the process. Yes, it cost more than doing something on line, and even though she has a degree in law, we figured it was worth the $ to have it done right. Either you pay the legal fees up front, or your heirs pay them on the back end in probate, which will cost many times more than setting up a living trust now.

    Maybe now I can ask Santa for a can in my stocking
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    Paul H, make sure you have them draft a second NFA specific trust. Don’t try to wrap your NFA items up with all of your other estate planning needs, that is were you could potentially run astray of the law.
    “You’ve gotten soft. You’re like one of those police dogs who’s released in to the wild and gets eaten by a deer or something.” Bill McNeal of News Radio

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    Paul H, you make three really excellent points, and one that is wrong.
    and then you'll have the trust you can use for your NFA items.
    As Alangaq said, please don't try to put your NFA items into your estate planning trust(s)! You really need a separate trust for these, designed for the purpose.

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    I would strongly advise NEVER to call a Fed for anything, they'll steer you in the wrong direction.

    Go to www.guntrustlawyer.com and read up. Contact the firm for their brochure that tells you everything you need to know. They can hook you up with an attorney here in AK who can properly put together an airtight, batf proof trust.
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    Excellent diatribe Alangaq, enjoyed reading it, agree with most of it, except for a few important points.

    Quote Originally Posted by Alangaq View Post
    observation: If boiler plate “Quicken” type do it yourself NFA trusts were illegal, or invalid, the BATF would (and do) reject said trusts, and NOT issue the tax stamp until such time that the wording of the trust has been corrected to their satisfaction.

    Opinion: The BATF is NOT going to issue a tax stamp to an invalid trust. They WILL kick the trust back and ask you to correct it.
    Most BATF staff are not trust experts, they have a checklist to follow, just like other bureaucrats. You said "The BATF issues THOUSANDS of tax stamps to Trusts every month. Tens of Thousands every year." so they can't possibly determine whether all those trusts are valid. Yet it still has to be good enough to stand up to inspection if they decide to examine it more closely later.

    If you can comfortably and confidently fill out routine documents such as tax forms, school enrolment forms for your children, job applications, PFD application and the like, then what makes you think for one second that you are so inept and ignorant that completing a do it yourself NFA trust is completely beyond your ability?! If you take the time to really research this topic and read the myriad of information out there, and determine what is credible and what is not, then it is a simple matter
    You're trying to equate things that aren't equal. First, the potential consequences for mistakes on most other forms are not felonies. Second, NFA trusts are simpler than other trusts but many good people have difficulty dealing with legal language. Third, if you re-read #1, the OP has no background on this topic, so you're rather casually talking about an awful lot of research. Fourth, you said earlier:
    ... they are satisfactory for the requirements of BATF. whether or not the wording is sufficient and correct to allow seamless transfer of assets upon ones demise... now that's something all together different.
    However, it isn't only the BATF requirements that matter, since transferability is one of the major benefits of using a trust.

    It is my opinion that do it yourself NFA trusts like the Quicken trust are not for everyone, but to say that they are inadequate or unsatisfactory in any way for use with NFA items when properly worded, is incorrect and those proposing such are simply ignorant or practicing fear mongering for their own financial benefit.
    I looked back at the earlier posts again, and no one actually said that. What was said is that DIY boilerplate isn't already "properly worded" on its own. Don't see anyone here receiving any financial benefit either.

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    you can use your estate planiing trust just fine for NFA items

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    Thanks for everyones input on this issue. After perusing guntrustlawyer, I understand the benefit of having a dedicated NFA trust.

    Certainly one can purchase an NFA on an estate planning trust, but if you want to make sure that there aren't any hickups or putting people into a bad position i.e. you pass away and someone that can be put in the position of illegally posessing an NFA, than a dedicated NFA is the way to go.
    Those that are successful in Alaska are those who are flexible, and allow the reality of life in Alaska to shape their dreams, vs. trying to force their dreams on the reality of Alaska.

    If you have a tenuous grasp of reality, Alaska is not for you.

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    Quote Originally Posted by Paul H View Post
    Thanks for everyones input on this issue. After perusing guntrustlawyer, I understand the benefit of having a dedicated NFA trust.

    Certainly one can purchase an NFA on an estate planning trust, but if you want to make sure that there aren't any hickups or putting people into a bad position i.e. you pass away and someone that can be put in the position of illegally posessing an NFA, than a dedicated NFA is the way to go.
    I meant to say you can use your Estate planning trust for NFA items if you use the correct language

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