I am posting a question for a friend, because I have no idea what to tell him other than “See an attorney”. Now curiousity has gotten ahold of me and I’m wondering…
He got married and acquired several NFA items on a trust that named both he and his spouse as Grantors/Trustees.
They have since divorced. The judgment has been signed and marriage has been dissolved. They aren’t on great terms, but no one went after alimony or assets or did anything to harm the other one. He just realized, nearly six months after the final judgment, that his ex-wife is named as a a grantor/trustee of his NFA firearms trust.
Would he just see an attorney to remove her from the trust? Does she need to consent? Transferring it to another trust would require a complete NFA Form 4 transfer, correct?
as an attorney, i can say that the two deciding factors are (1) the language of the trust, and (2) state laws on both trusts and dissolution of marriage.
In other words, trusts are a beast of contract and statute. If the trust document allow for non-consensual removal of a trustee (if it’s a revocable trust) then the answer is “maybe.”
That’s why the best advice in such instances is to seek advice of a trust attorney in the state where the trust was created or currently lives. If you have a trust and a marriage and want to know in your own case, it’s always best to modify the trust with a lawyer’s help before there is an issue between the grantor, trustee, or beneficiary. Once a problem arises, things get more complicated and possibly contentious.
I don’t think it would necessarily be “non-consenual”. She expressed her desire to be taken off the trust (her mother is the beneficiary…talk about a ticking time bomb) during the divorce but that was the end of it. I briefly read through his trust when we were talking and saw that it did allow the removal of trustees by the grantor without the trustee’s consent, but his wife is the co-grantor along with a trustee. Would eliminating her as a trustee remove her from legally being able to access the firearms? In other words, do grantors have any right to trust property or only trustees?
Anyway, you’re absolutely right. This probably wasn’t a question that can be answered online as trust laws and language vary from trust to trust and state to state. Plus, I’ll inevitably get the “Oh, so it’s your…friend?” response.
Edit: Here is florida law regarding the subject. I don’t speak legalese…
736.1105 Dissolution of marriage; effect on revocable trust.—Unless the trust instrument or the judgment for dissolution of marriage or divorce expressly provides otherwise, if a revocable trust is executed by a husband or wife as settlor prior to annulment of the marriage or entry of a judgment for dissolution of marriage or divorce of the settlor from the settlor’s spouse, any provision of the trust that affects the settlor’s spouse will become void upon annulment of the marriage or entry of the judgment of dissolution of marriage or divorce and any such trust shall be administered and construed as if the settlor’s spouse had died on the date of the annulment or on entry of the judgment for dissolution of marriage or divorce.
But that appears to affect if only he were on the trust, not both of them.
Did your friend hire an attorney to create the trust, or was it one of those Quicken Will Maker type trusts?
If he hired an attorney, I would suggest his best course would be to contact the attorney who created the trust to begin with.
To each their own, and I understand why some people go the Quicken route, but this is why I suggest using an attorney. I can call or email my trust attorney anytime with questions and she will have an answer for me within 24 hours.
This is not legal advice: (I’m not being a smart-ass with this next sentence) trustees can be revoked if revocable, and grantor rights can be sold if transferable. Like you said, it would strongly depend on the language of the trust, and, it sounds like, Florida law, which I don’t practice.
Always best to get an attorney in the jurisdiction where the trust lives or was created, and arrange the desired result through a contract to modify the trust, or a transfer/sale of rights.
I do criminal defense… It’s more straightforward… Usually. Ok, not straight forward, but more interesting
Luckily, my ex-wife was amicable, and signed an Amendment to my NFA Trust, and it was notorized, basically saying she forfeited all rights, and privilages under my NFA Trust.
Made copy of Amendment, sent it to the BATFE along with my updated Assignment sheets. No issues.
I recommend that your friend talks to his lawyer; he might be able to get her to sign an amendment sheet, revoking her rights as a trustee, and co-grantor of the trust.
The part in bold, when specifically relating to an NFA trust sparks a different theoretical question for me. I know the practical answer is a resounding “no”, but if NFA firearms are technically owned by a trust, and the verbiage is correct to allow the sale or transfer of the trust itself, wouldn’t the NFA firearms still be owned by the trust? Only ownership/possession of the trust itself ever changed hands, not the firearms, as they are still legally owned and maintained by the same legal entity… There by, wouldn’t this dilemma actually make sense as to why the ATF wants to kick the “trust loophole” in the nuts? Don’t get me wrong, my stuff is on a lawyered trust, I’m just posing the thought here because it raises particularly interesting legal debate in my mind, especially with regards to NFA branch. My theoretical process here is along the lines of the fact that a trust beneficiary can take legal, untaxed possession and control of a trust and it’s supported property in the event of untimely incapacitation or death. Why, logically, would relinquishment of control over the trust by voluntary means be any different, especially if the verbiage was built in.
That being said, (I know the practical answer is yes) theoretically, it seems to me that in that aspect, since NFA firearm ownership itself isn’t being transferred, a Form-4 and tax paid wouldn’t be necessary for this type of transfer of ownership, would it? Trust “ownership” isn’t regulated by the ATF (currently anyway), so why wouldn’t this be feasible.
Sorry if this is somewhat derailing, but I felt it was related enough to the current conversation to spark intelligent thought.
Edit: adding a thought here to the original conversation, I know at least here in TX, if there is a co-grantor that would like to be removed from the trust, and she is willing to do so, it isn’t any different than adding a trustee. A separate document, signed by both parties and notorized, would amend the trust to remove her legally from her rights and responsibilities as a trust co-grantor. Something along the lines of saying that she willingly relinquished her legal dominion over the trust.
I spoke with the ATF. I need to send them a written request for their attorneys to review this matter and issue an opinion. I will keep you posted. Sorry for the delay. (You would think by now, they would have had to address this issue.)
Apparently he needs to split the trust in two, have his ex execute the new trust on her own, and then she be removed from the current trust. (No property will be transferred to her new trust)
The other option is to make a new trust and then transfer the items at $200/pop.
