So What Exactly Is Changing For NFA Trusts In July

[henschman]

After July, you will have to submit photos/fingerprints/LEO notification for yourself and every other Trustee on your trust with every application. Applications sent in before July will still be under the current rules, which don't require any of this. So I encourage everyone to submit the applications on any NFA items you may be thinking about getting before July.

After July, you will want a trust that is set up to allow for easy addition and removal of trustees, so you can remove all your trustees before sending off an application... that way you are the only one who has to submit all the required info... and then easily add your trustees back later.

My trusts are designed to make all this as easy as possible. They also come with everything you need to add non-NFA items to the trust on a separate schedule that is not reported to the ATF, in case you want them in the trust too for estate planning purposes. I also include documents for setting up a bank account in the trust's name, in case you get serious about buying/selling NFA items and want to keep those funds separate.

A lot of trusts out there are generic forms copied from estate planning trusts, and aren't the best suited for NFA items. One thing I've seen in every other NFA trust template I've looked at is that your co-Trustees are allowed to buy, sell, and dispose of trust assets. Most guys with a few cans and SBRs want their buddies to be able to use them, but not sell them! Mine are set up so that your co-trustees only have the right to possess and use the items. They are also specifically written with NFA items in mind, and have language preventing you from running into legal trouble as far as allowing prohibited persons from possessing the items, etc.

 

[NikatKimber]

You may have mentioned before, but what is the process to change an existing trust to one such as you provide? Do you provide that service?

Thanks!

 

[henschman]

Yes, I also do trust amendments. Basically I just write an amendment to your trust to set it up just like my trusts. I charge the same price as writing a new trust - $200. The only thing about an amendment to an NFA trust is that you can't change the name of the trust... basically once an item is in the NFA registry with a particular trust as the owner, it can't be changed. If you have a trust with a real long name, it can be a PITA to have it engraved on an SBR/SBS/Form 1 can. In that situation, it is best to just have a second trust written with a short name and put those items in it.

 

[3inSlugger]

Do trusts even really have an advantage after July then?

 

[OKCHunter]

Do trusts even really have an advantage after July then?

Someone a lot more knowledgeable than me will probable respond but from my point of view:

1. LEO approval is not required just LEO notification;
2. Can add or remove Trustees who can have access to Class III items (wife can open the safe to get to other items if she is a Trustee);
3. After 7/1 - Can remove Trustees to minimize the amount of finger printing and photographs for new Class III items and then add the Trustees back later;
4. Class III items can more easily be passed to beneficiaries.

Just my thoughts on the benefits.

 

[NikatKimber]

LEO approval is going away for individual transfers with this new rule, so that will no longer be an advantage to trusts. IMO, the primary benefit is the ability to share access to the item.

I'm married, so that is important.

 

[OKCHunter]

LEO approval is going away for individual transfers with this new rule...

Didn't know that. Small step in the right direction?

 

[R3DLINE]

 

[3inSlugger]

Based upon that video, its looks like trusts just got really really inconvenient compared to the improved individual ownership. The only issue of which is possession in case of death...

 

[henschman]

Trusts will have less advantages after July 1, but will still have some advantages compared to individual ownership.

As an individual, you are not legally allowed to let others use your NFA items. That is considered an unlawful transfer. With a trust, you can legally let others use the items by making them co-Trustees, and if you have a good trust like the ones I write, you can avoid your co-trustees having to jump through the 41P hoops by removing them as trustees, applying for the item with only you as a responsible party, and then adding them back.

Trusts also have advantages when it comes to estate planning. If you own an item as an individual, when you die your heirs have to apply for transfers through the ATF, and the property has to go through a probate action in State District Court, which can be expensive and time consuming. If you have a trust, there is no change of ownership since the trust still owns the property after you die, and no transfer is necessary. Your trustees go on being able to use the items. Also items in a trust don't go through probate, since there is legally no change of ownership.

My trusts also include a confidential property schedule that is separate from the schedule listing your NFA items. You can place other property such as non-NFA firearms on the confidential schedule for estate planning purposes. You do not send this schedule in with NFA applications, like you do with the schedule of NFA items, so you don't end up effectively "registering" your other guns with the ATF. Not everybody will want to do this, but it is an option, and I provide all the forms to do this and more with my NFA trusts.