RangerWalker71
Well-Known Member
Found this and wanted to throw it out for those who have questions or need help.
Here is the link to the official Article
Setting Up an NFA Gun Trust - The Firearm Blog
First off. Disclaimer. I'm not a lawyer. But I did consult one when setting up my Trust and I paid for it from my own funds.
I had been planning to set up a Trust for over a year. Finally the stars aligned and it was time to do it. I opened up a browser and googled for "setting up a Gun Trust".
The reason I am covering this topic today is to clear up a number of misconceptions I had come across while doing searches on the interwebz (I am assuming I am not the only person on the planet that was confused). It seems like everyone on the internet has an opinion on the subject of setting up a Gun Trust. There are discussions on forums that detail the ease of setup, as well as horror stories of things gone wrong. Some people consult with lawyers. Some get a "quicky" where they have purchased the documentation from an online document provider for under $100. It really runs the gamut. A few of the sites give pseudo-legal advice and are authored by attorneys. And even those still suggest consulting a lawyer local to you.
My Misconceptions
Out-of-state family could join the Trust and be able to buy NFA items as a Trustee. (partial misconception)
Non-restricted items bought through the Trust would not require the same Brady check. (nope)
Once I had a Trust, I could move to another state without issues–it would follow me and protect my items in the new location. (partial misconception)
Once I get a suppressor, I could go for a weekend hog hunt in Texas (I live in New Mexico) and take it with me. (partial misconception)
Some Terminology
Class III: A special occupational tax levied against a dealer for the ability to sell firearms. This is commonly misapplied to NFA Restricted items which are actually "Title II".
Form 4: Application for Tax Paid Transfer and Registration of Firearm. This is the form you will need to send in with your fee for a NFA item. Unless you are doing a Form 1 item like SBR or permanent modification/manufacturing.
Title II: refers to certain firearms, explosive munitions, and other devices which are federally regulated in the United States by the National Firearms Act (NFA).
NFA: The National Firearms Act which imposes a statutory excise tax on the manufacture and transfer of certain firearms and mandates the registration of those firearms.
Trust: the organized entity that owns the designated property.
Trustee: a designated individual that can make decisions on behalf of the Trust, as well as access and use the restricted trust assets/weapons.
What a Gun Trust IS
A Gun Trust is, at its roots, an estate planning tool. It is specialized in that it allows for some flexibility when acquiring and transferring National Firearms Act regulated items. This generally refers to Title II items such as suppressors, short-barreled rifles and short-barreled shotguns.
Some of the benefits are:
* More than one person can be a Trustee and can thus possess and use the items held by the Trust without having to request individual permission from your local Chief Law Enforcement Officer (CLEO) or the BATFE.
* Since the items are held in the Trust, if the current Trustee in possession of the item dies, there is no transfer procedure. This, of course, assumes that you have set up the Trust to stay running after your death, and that you have assigned rights to other Trustees.
* Your heirs can avoid probate (of the items in the Trust) since the items are held by the Trust.
* Bypassing an executor of your estate (who may not know the rules related to firearms and how to dispose of NFA items), instead allowing a more qualified Trustee to manage the collection.
* And, of course, the most important benefit: generally faster processing by the BATFE.
What a Gun Trust IS NOT
First off, an NFA Gun Trust is not a way to "get one over" on the BATFE. An NFA Gun Trust will not allow you to violate or bypass state (nor federal) laws and restrictions.
The Trustee purchasing the item on behalf of the Trust must still comply with the Brady Act.
If you want to cross state lines (i.e. "interstate transfer") with an NFA item ("any destructive device, machine gun, short-barreled rifle, or short-barreled shotgun"; there is no mention on the form regarding suppressors), which includes going to a competition, moving, hunting in another state, etc., you must notify the BATFE months in advance of the crossing via a Form 5320.20. [EDITED]
You cannot take an NFA item to a state that does not allow it. (e.g. you cannot take a short-barreled rifle to Washington, New York or California, as they are illegal to possess in those states). [EDITED: As of Apr 2nd, 2014, SB5956 allows for SBRs in Washington State]
If you plan to move (and take NFA items with you), you must file a Form 20 with the BATFE and let them know what the new registered address of the NFA items is going to be. You must do this many months in advance.
If a Trustee lives out of the state they can still be involved in the trust but can only access and use the restricted items in the state where the trust is registered, or in those states included on the filed Form 20.
Why Do It?
I originally had wanted to setup a Gun Trust so that I could safely, and legally, transfer my firearms (and NFA items) to my family upon my exit. I also wanted to be able to more easily purchase suppressors (I have some damaged hearing from time spent on helicopters and being way to close to things that made loud "booms"). And, let's face it, buying NFA items via a Trust is currently months faster as a Trust than as an individual because CLEO is cut out of the process and can no longer unilaterally refuse to process your background check applications.
One thing to note is that it does create some logistical problems (as noted in the previous section). If you move (and plan to take your Title II items), you are compelled to notify the BATFE through a Form 20. So if you are going to be moving into a rental, you may have a problem securing an address multiple months in advance. If you don't want to (or cannot, for a number of reasons) move the items to the new state, you can leave them in a safe deposit box or at the residence of a trusted person (in a locked and secured vessel to which only you have access). Another alternative you can investigate is that most Class 3 dealers can store it legally and safely for you…for a small lock box rental fee.
Why Should I Use a Lawyer Instead of an Online Service?
Lawyers provide a number of added value and benefits to the drafting and implementation of a Gun Trust. While there are some aspects that are very "form letter"-like, there are going to be sections that are customized to your specific situation. You want to consult with an attorney that has experience in customizing a Trust (and all of the related documentation) to the specific needs of their clients.
Because a Gun Trust has some additional intricacies and requirements, above and beyond a regular estate Trust, you want to have the backup and support of someone that can work with you and help untangle the mess. In the context of the BATFE and gun transactions, a lawyer can provide extensive support, ongoing counsel, and usually a guarantee of their work. If there is ever an issue with the BATFE and a Gun Trust, the parties who used the fill in the blank forms from the internet are on their own, while those who hired attorneys have the experience and expertise of their lawyer to call upon. Lawyers also carry malpractice insurance to cover their work in the event that there was a mistake by the drafter that resulted in litigation.
What To Look For In a Lawyer
In the context of gun or NFA Trusts, there are very few attorneys around the country who specialize in this niche area of the law. I used a local lawyer in Albuquerque (Keith Findlay, of Findlay & Dziak, LLC) who is well versed in the process and has successfully set up a number of NFA Trusts.
The first thing you should look for is a lawyer that is absolutely familiar with the laws in the state in which you intend to set up the Trust and store your NFA Items. If a lawyer tells you that the laws of the state are not that important and that you can just use a generic Trust setup, well, good luck with that. If a lawyer tries to convince you that you have to have a Gun Trust just to own Title II items then they are just as wrong.
Since a Gun Trust is, well, basically a Trust (with some specialization), you should seek an attorney with extensive estate planning and experience drafting Trusts. This would include the attorney having a good working knowledge of their state's Trust code(s).
Additionally, it would also be helpful to look for a lawyer that also has experience in Criminal Defense and is well versed in Administrative Law (to deal with additional bureaucracy that is the BATFE) and also versed in gun rights/laws.
So how can you find an attorney that fits that bill? I found a site Lawyer, Attorney, Law Firms, Attorneys, Legal Information. Lawyers.com that allows you to search on areas of practice in your state. You can also contact your local Bar Association to get a referral.
What Should I Expect To Get By Hiring A Lawyer
So I have no shame in admitting that I spent around $500, which is not a whole lot for a good lawyer in my opinion. Given what I was about to embark upon, I felt that the fee was well worth the shield against the potential problems and pitfalls that I could encounter with the BATFE and local law enforcement.
You should call the lawyer first and verify that they have the proper background to assist you. Most attorneys will not have a problem answering/returning your call and answering some questions (but don't expect hours of free consult). If they are versed in setting up a Gun Trust, they will likely ask you a number of questions to validate that you are not a prohibited person, and they should then set up a face-to-face with you (and any other initial Trustees you plan to list).
You should have a sit down meeting with lawyer where they ask a number of questions to better understand your needs. It is during this time where you can (and should) ask any questions you have. Those questions should be answered to your satisfaction.
You should walk out of the meeting with a set of correct (and fully executed and notarized) documents and clear instructions for "next steps". There may be some minor variations based on the requirements of your state of residence, but it should include, at a minimum:
* The Trust document itself, a Declaration of Trust, and a
* Schedule "A" (or similar form that indicates the assets owned by the Trust.
The above form a "living document" that follows the Trust for the length of it's existence.
The attorney should guarantee their work. In the event of a problem filing the document, they should provide support navigating the issues, and help draft any needed corrections to the document. They should also be able to provide counsel if you end up having to meet with the BATFE.
Lastly, you should get "peace of mind".
How it works
First, you are going to meet with an attorney that is going to set you up with the necessary documents and instructions.
After the attorney, you are going to go to a bank and seed an account with whatever you feel necessary equal to (or beyond) the minimum. Expect to put in at least $10, though some banks may require more. You are going to fill in your Schedule "A" sheet with the bank information, which is the first property of the Trust and that is the basic requirement to stand it up, making it legal.
Next it is time to go buy your NFA Item. First, transfer the money to your Trust bank account. Then go to your favorite dealer, fill out the paperwork, and pay with the money in the Trust account (you want to set up a clear audit trail and provide some additional protection from "piercing the corporate veil"). You will also submit a COPY of all of your documentation to the BATFE (to include the bank account information).
Now you play the waiting game. You should expect your first submission to take a little longer than future transactions. That is because the BATFE is going to have to do a full review of the submitted documentation. And they are a bureaucracy. With normal people that have poorly funded departments and huge workloads and the stigma of their agency. I'm not defending the BATFE nor making excuses. You should just have an understanding of who, and what, you are about to form a relationship with and set your expectations accordingly.
One of two things will happen. You will be green lighted, the BATFE will send back a copy of your documentation with the tax stamp information filled in as the next line items on your Schedule "A". You take that and put it into your binder in a sheet protector along with the rest of your documents (and DO NOT remove the old pages as your Trust is a living document). Congratulations. You now have a Title II item registered to your Trust. Follow the laws and have fun.
The other potential outcome is that you will be rejected. It could be an error in the organization documents. It could be the stars did not align the day it was reviewed. Whatever the reason is, it doesn't matter–you just need to fix it if you want the Trust.
If you went cheap and bought your documents off the internet, you may be hosed. You will probably have to consult a local lawyer to get the problem sorted out, which will likely involve redoing the documents from scratch (I don't think many lawyers would take documents procured from the internet and then back them up). And, yes, you will likely have to start the several month waiting period again.
If, on the other hand, you went the route of a consulting a local attorney, then great, you are a step ahead. You have an ally in your court that should stand behind the documents that were drafted for you. They may even have a relationship with the local BATFE office, and be able to set up a meeting to sort out the issues.
Afterword
It is a good idea to carry a copy of your Organization Documents with your NFA items. Not all law enforcement personnel are versed in NFA issues and may take issue with your possession of an SBR or suppressor. Having your documentation on hand can go a long way to smoothing out any issues (though it may not entirely prevent them). For ease of carrying the docs, I would suggest scanning them in to digital format (any time you have a change to the documents), printing out a small copy (most printers will let you print several pages on a single sheet of paper, or you could have a local copy shop do it), and then having it laminated or in a sheet protector. Think of it like carrying your car insurance and registration when you are driving a car. Put it in your range bag, and update it as you make changes.
If any of you readers have experiences with setting up a Trust, either good or bad, please leave a comment below. The above represents my experience setting this up and working with a specific attorney (and thanks again to Keith Findlay for reviewing this article for accuracy); your experiences may differ (though I would hope not too much)…
Here is the link to the official Article
Setting Up an NFA Gun Trust - The Firearm Blog
First off. Disclaimer. I'm not a lawyer. But I did consult one when setting up my Trust and I paid for it from my own funds.
I had been planning to set up a Trust for over a year. Finally the stars aligned and it was time to do it. I opened up a browser and googled for "setting up a Gun Trust".
The reason I am covering this topic today is to clear up a number of misconceptions I had come across while doing searches on the interwebz (I am assuming I am not the only person on the planet that was confused). It seems like everyone on the internet has an opinion on the subject of setting up a Gun Trust. There are discussions on forums that detail the ease of setup, as well as horror stories of things gone wrong. Some people consult with lawyers. Some get a "quicky" where they have purchased the documentation from an online document provider for under $100. It really runs the gamut. A few of the sites give pseudo-legal advice and are authored by attorneys. And even those still suggest consulting a lawyer local to you.
My Misconceptions
Out-of-state family could join the Trust and be able to buy NFA items as a Trustee. (partial misconception)
Non-restricted items bought through the Trust would not require the same Brady check. (nope)
Once I had a Trust, I could move to another state without issues–it would follow me and protect my items in the new location. (partial misconception)
Once I get a suppressor, I could go for a weekend hog hunt in Texas (I live in New Mexico) and take it with me. (partial misconception)
Some Terminology
Class III: A special occupational tax levied against a dealer for the ability to sell firearms. This is commonly misapplied to NFA Restricted items which are actually "Title II".
Form 4: Application for Tax Paid Transfer and Registration of Firearm. This is the form you will need to send in with your fee for a NFA item. Unless you are doing a Form 1 item like SBR or permanent modification/manufacturing.
Title II: refers to certain firearms, explosive munitions, and other devices which are federally regulated in the United States by the National Firearms Act (NFA).
NFA: The National Firearms Act which imposes a statutory excise tax on the manufacture and transfer of certain firearms and mandates the registration of those firearms.
Trust: the organized entity that owns the designated property.
Trustee: a designated individual that can make decisions on behalf of the Trust, as well as access and use the restricted trust assets/weapons.
What a Gun Trust IS
A Gun Trust is, at its roots, an estate planning tool. It is specialized in that it allows for some flexibility when acquiring and transferring National Firearms Act regulated items. This generally refers to Title II items such as suppressors, short-barreled rifles and short-barreled shotguns.
Some of the benefits are:
* More than one person can be a Trustee and can thus possess and use the items held by the Trust without having to request individual permission from your local Chief Law Enforcement Officer (CLEO) or the BATFE.
* Since the items are held in the Trust, if the current Trustee in possession of the item dies, there is no transfer procedure. This, of course, assumes that you have set up the Trust to stay running after your death, and that you have assigned rights to other Trustees.
* Your heirs can avoid probate (of the items in the Trust) since the items are held by the Trust.
* Bypassing an executor of your estate (who may not know the rules related to firearms and how to dispose of NFA items), instead allowing a more qualified Trustee to manage the collection.
* And, of course, the most important benefit: generally faster processing by the BATFE.
What a Gun Trust IS NOT
First off, an NFA Gun Trust is not a way to "get one over" on the BATFE. An NFA Gun Trust will not allow you to violate or bypass state (nor federal) laws and restrictions.
The Trustee purchasing the item on behalf of the Trust must still comply with the Brady Act.
If you want to cross state lines (i.e. "interstate transfer") with an NFA item ("any destructive device, machine gun, short-barreled rifle, or short-barreled shotgun"; there is no mention on the form regarding suppressors), which includes going to a competition, moving, hunting in another state, etc., you must notify the BATFE months in advance of the crossing via a Form 5320.20. [EDITED]
You cannot take an NFA item to a state that does not allow it. (e.g. you cannot take a short-barreled rifle to Washington, New York or California, as they are illegal to possess in those states). [EDITED: As of Apr 2nd, 2014, SB5956 allows for SBRs in Washington State]
If you plan to move (and take NFA items with you), you must file a Form 20 with the BATFE and let them know what the new registered address of the NFA items is going to be. You must do this many months in advance.
If a Trustee lives out of the state they can still be involved in the trust but can only access and use the restricted items in the state where the trust is registered, or in those states included on the filed Form 20.
Why Do It?
I originally had wanted to setup a Gun Trust so that I could safely, and legally, transfer my firearms (and NFA items) to my family upon my exit. I also wanted to be able to more easily purchase suppressors (I have some damaged hearing from time spent on helicopters and being way to close to things that made loud "booms"). And, let's face it, buying NFA items via a Trust is currently months faster as a Trust than as an individual because CLEO is cut out of the process and can no longer unilaterally refuse to process your background check applications.
One thing to note is that it does create some logistical problems (as noted in the previous section). If you move (and plan to take your Title II items), you are compelled to notify the BATFE through a Form 20. So if you are going to be moving into a rental, you may have a problem securing an address multiple months in advance. If you don't want to (or cannot, for a number of reasons) move the items to the new state, you can leave them in a safe deposit box or at the residence of a trusted person (in a locked and secured vessel to which only you have access). Another alternative you can investigate is that most Class 3 dealers can store it legally and safely for you…for a small lock box rental fee.
Why Should I Use a Lawyer Instead of an Online Service?
Lawyers provide a number of added value and benefits to the drafting and implementation of a Gun Trust. While there are some aspects that are very "form letter"-like, there are going to be sections that are customized to your specific situation. You want to consult with an attorney that has experience in customizing a Trust (and all of the related documentation) to the specific needs of their clients.
Because a Gun Trust has some additional intricacies and requirements, above and beyond a regular estate Trust, you want to have the backup and support of someone that can work with you and help untangle the mess. In the context of the BATFE and gun transactions, a lawyer can provide extensive support, ongoing counsel, and usually a guarantee of their work. If there is ever an issue with the BATFE and a Gun Trust, the parties who used the fill in the blank forms from the internet are on their own, while those who hired attorneys have the experience and expertise of their lawyer to call upon. Lawyers also carry malpractice insurance to cover their work in the event that there was a mistake by the drafter that resulted in litigation.
What To Look For In a Lawyer
In the context of gun or NFA Trusts, there are very few attorneys around the country who specialize in this niche area of the law. I used a local lawyer in Albuquerque (Keith Findlay, of Findlay & Dziak, LLC) who is well versed in the process and has successfully set up a number of NFA Trusts.
The first thing you should look for is a lawyer that is absolutely familiar with the laws in the state in which you intend to set up the Trust and store your NFA Items. If a lawyer tells you that the laws of the state are not that important and that you can just use a generic Trust setup, well, good luck with that. If a lawyer tries to convince you that you have to have a Gun Trust just to own Title II items then they are just as wrong.
Since a Gun Trust is, well, basically a Trust (with some specialization), you should seek an attorney with extensive estate planning and experience drafting Trusts. This would include the attorney having a good working knowledge of their state's Trust code(s).
Additionally, it would also be helpful to look for a lawyer that also has experience in Criminal Defense and is well versed in Administrative Law (to deal with additional bureaucracy that is the BATFE) and also versed in gun rights/laws.
So how can you find an attorney that fits that bill? I found a site Lawyer, Attorney, Law Firms, Attorneys, Legal Information. Lawyers.com that allows you to search on areas of practice in your state. You can also contact your local Bar Association to get a referral.
What Should I Expect To Get By Hiring A Lawyer
So I have no shame in admitting that I spent around $500, which is not a whole lot for a good lawyer in my opinion. Given what I was about to embark upon, I felt that the fee was well worth the shield against the potential problems and pitfalls that I could encounter with the BATFE and local law enforcement.
You should call the lawyer first and verify that they have the proper background to assist you. Most attorneys will not have a problem answering/returning your call and answering some questions (but don't expect hours of free consult). If they are versed in setting up a Gun Trust, they will likely ask you a number of questions to validate that you are not a prohibited person, and they should then set up a face-to-face with you (and any other initial Trustees you plan to list).
You should have a sit down meeting with lawyer where they ask a number of questions to better understand your needs. It is during this time where you can (and should) ask any questions you have. Those questions should be answered to your satisfaction.
You should walk out of the meeting with a set of correct (and fully executed and notarized) documents and clear instructions for "next steps". There may be some minor variations based on the requirements of your state of residence, but it should include, at a minimum:
* The Trust document itself, a Declaration of Trust, and a
* Schedule "A" (or similar form that indicates the assets owned by the Trust.
The above form a "living document" that follows the Trust for the length of it's existence.
The attorney should guarantee their work. In the event of a problem filing the document, they should provide support navigating the issues, and help draft any needed corrections to the document. They should also be able to provide counsel if you end up having to meet with the BATFE.
Lastly, you should get "peace of mind".
How it works
First, you are going to meet with an attorney that is going to set you up with the necessary documents and instructions.
After the attorney, you are going to go to a bank and seed an account with whatever you feel necessary equal to (or beyond) the minimum. Expect to put in at least $10, though some banks may require more. You are going to fill in your Schedule "A" sheet with the bank information, which is the first property of the Trust and that is the basic requirement to stand it up, making it legal.
Next it is time to go buy your NFA Item. First, transfer the money to your Trust bank account. Then go to your favorite dealer, fill out the paperwork, and pay with the money in the Trust account (you want to set up a clear audit trail and provide some additional protection from "piercing the corporate veil"). You will also submit a COPY of all of your documentation to the BATFE (to include the bank account information).
Now you play the waiting game. You should expect your first submission to take a little longer than future transactions. That is because the BATFE is going to have to do a full review of the submitted documentation. And they are a bureaucracy. With normal people that have poorly funded departments and huge workloads and the stigma of their agency. I'm not defending the BATFE nor making excuses. You should just have an understanding of who, and what, you are about to form a relationship with and set your expectations accordingly.
One of two things will happen. You will be green lighted, the BATFE will send back a copy of your documentation with the tax stamp information filled in as the next line items on your Schedule "A". You take that and put it into your binder in a sheet protector along with the rest of your documents (and DO NOT remove the old pages as your Trust is a living document). Congratulations. You now have a Title II item registered to your Trust. Follow the laws and have fun.
The other potential outcome is that you will be rejected. It could be an error in the organization documents. It could be the stars did not align the day it was reviewed. Whatever the reason is, it doesn't matter–you just need to fix it if you want the Trust.
If you went cheap and bought your documents off the internet, you may be hosed. You will probably have to consult a local lawyer to get the problem sorted out, which will likely involve redoing the documents from scratch (I don't think many lawyers would take documents procured from the internet and then back them up). And, yes, you will likely have to start the several month waiting period again.
If, on the other hand, you went the route of a consulting a local attorney, then great, you are a step ahead. You have an ally in your court that should stand behind the documents that were drafted for you. They may even have a relationship with the local BATFE office, and be able to set up a meeting to sort out the issues.
Afterword
It is a good idea to carry a copy of your Organization Documents with your NFA items. Not all law enforcement personnel are versed in NFA issues and may take issue with your possession of an SBR or suppressor. Having your documentation on hand can go a long way to smoothing out any issues (though it may not entirely prevent them). For ease of carrying the docs, I would suggest scanning them in to digital format (any time you have a change to the documents), printing out a small copy (most printers will let you print several pages on a single sheet of paper, or you could have a local copy shop do it), and then having it laminated or in a sheet protector. Think of it like carrying your car insurance and registration when you are driving a car. Put it in your range bag, and update it as you make changes.
If any of you readers have experiences with setting up a Trust, either good or bad, please leave a comment below. The above represents my experience setting this up and working with a specific attorney (and thanks again to Keith Findlay for reviewing this article for accuracy); your experiences may differ (though I would hope not too much)…
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