This posting is courtesy of my colleague David Goldman in Jacksonville, Florida, who has created a special trust for owning weapons regulated by the National Firearms Act (NFA).
Our Copyrighted NFA Trust is significantly different than any other Revocable Trust on the market. A NFA trust is created for the purpose of purchasing, owning, using, and transferring Title II weapons by you and your family.
One of the differences in a professionally created NFA Trust is in how the firearms are treated in the event of your eventual incapacity or death. Most trusts name a "Successor Trustee". The problem is that although we name this person, we do not know if they will survive us, or be willing to help out. What we do know is that a close family member or friend will usually volunteer to manage our Estate and/or assets in Trust. The biggest problem and risk to our family is that this person will not know how to properly deal with Title II firearms and unknowingly create criminal liability for themselves or another member of our family. The last thing we want to do when we die or become incapacitated is to create criminal liability for our family and friends. (The penalties for each violation are 10 years in Jail and a $250,000 penalty).
A NFA TRUST IS DIFFERENT THAN A REVOCABLE TRUST
A Gun Trust is different than a typical Revocable Trust. While it is possible to hold other assets in a NFA Gun Trust, we recommend that only firearms be placed in the trust. There is no reason to subject your other assets to the liability associated with the improper use, possession, or transfer of these items. No other trust begins to deal with the many unique issues of Title II firearms ownership, possession, transfer, and use. The NFA Gun Trust has been reviewed and modified by more than 75 Estate planning and/or Firearms law lawyers who are licensed in more than 40 states. Whether your goal is to purchase a single silencer or hundreds of Title II firearms, our NFA Gun Trust can be easily modified to address your specific issues.
There are many problems in using a traditional trust when dealing with firearms. Its not enough for a beneficiary to reach a certain age prior to distributing an asset like you would do with a couch, picture on the wall, or bank account. You must ascertain the geographic location of the beneficiary, determine whether the items are legal in that state, determine if the beneficiary is legally eligible to receive, own, or possess the items, and most importantly determine if the beneficiary is mature and responsible enough to be in possession of the firearms. We all know that one of the most important things with gun ownership is training. We would never hand a gun to someone without providing them instructions on how to use it, but that is exactly what we do when we use a traditional trust. In addition, we put our family members and friends at risk when they carry out the instructions in the trust because most trusts instruct the successor trustee to break them law, when holding, purchasing, or selling assets by not pointing out how these simple actions will violate the NFA and create criminal and civil liabilities for our family members. Above is only one of the many areas that illustrate why a traditional trust is not suitable for firearms, much less Title II firearms.
In addition to the many protections created for your family, a NFA firearms trust can help you acquire class 3 weapons without the need for fingerprints or CLEO sign off. Many CLEO’s are refusing to look at Form 4′s and/or Form 1′s.
Below you will find some of the reasons why a NFA trust can be the best way to own firearms restricted by the NFA as well as the typical steps involved in the process and the costs associated with the entire process.
Some of the main benefits of an NFA Trust include:
1) The ability to tell your representatives how to properly transfer these assets upon your death;
2) The ability to transfer assets to children even below the age of 18 at a later time while giving the trustee the ability to look at the child’s mental state, physical location, and age in addition to whether the child is legally able to own, possess, or use the firearms;
3) The ability for the Trustee to refuse assets transfered by will or other means if NFA and state requirements are not complied with;
4) Requirement to comply with NFA and State laws for transfer of NFA related assets;
5) The ability to make uneven distributions to heirs to conserve value of assets;
6) The ability to purchase Title II weapons, without creating a violation of the duties of the trustee;
7) The ability to use the weapons in the trust without creating liability to the beneficiaries;
8) The instructions and formalities on how to: manufacture items under a Form 1, how to purchase items correctly under a Form 4, how to properly document and transport Title II firearms with a Form 20.
9) Protection for yourself and your family from Constructive Possession - a violation of the NFA.
10) The ability to add others to your trust at a later time and create additional authorized users of the firearms.
Each NFA Trust comes with a Memorandum (users manual) which discusses many of the commonly asked questions regarding the NFA and ATF regulations.
Because each violation of the National Firearms Act can subject you and your family to 10 years in jail and fines of $250,000 per violation it is very important to understand how to properly purchase, use, possess, and transfer the firearms that are restricted by the NFA. In addition to creating a custom trust for your needs, we teach you how to make the purchase correctly, who can and cannot use the weapons, and how to avoid the common technical violations of the NFA that most individuals, businesses, and trusts make.
The steps involved in creating a trust involve the following:
1) Discuss your goals, and what you need to do to protect yourself, family, and friends from violations of the NFA.
2) Draft the trust based upon the above information.
3) Review the trust with a local attorney and make modifications as necessary.
4) You are taught how to use the trust, what it does.
5) We tell you how to purchase the items correctly to avoid violations of the NFA.
6) We teach you how to avoid the common procedural and technical violations of the NFA
7) You sign the trust and send us a copy for review.
8) You make the purchase and can make additional purchases in the future without additional costs associated with the trust.
Tags: NFA Gun Trusts, Trusts
Tags: NFA Gun Trusts, Trusts
- Advance Directives
- Asset Protection
- Business Succession
- Charitable Gift Planning
- Elder Care
- Estate Planning
- Estate Tax
- Financial Planning
- Fraud & Financial Abuse
- Gift Tax
- Health Care
- Income Tax
- Life Insurance
- Living Trusts
- NC Income Tax
- North Carolina Department of Revenue
- Nursing Homes
- Pending Legislation
- Powers of Attorney
- Qualified Plans
- Real Property
- Social Security
- Special Needs Planning
- Tax Fraud
NFA (Gun) Trusts Provide Many Advantages
Posted on: November 5th, 2009