I am new to owning NFA items. Soon I’ll be SBRing one of my rifles, and eventually purchasing a suppressor (Silencerco). I was planning on using SilencerCo’s easy trust to set up a gun trust, but I’m not sure whether I really need to do it now and before acquiring NFA items, or if its not a big deal to get the items first, and do the gun trust thing later.
My questions are:
-How does having a gun trust change the process for filing out a Form 1 (SBR) or Form 4 (suppressor)?
-Is there a downside to just setting up the trust at a later date? Can already possessed NFA items be transferred to a trust fairly easily?
Remember, I am just now getting into NFA gear, I’ve been waiting too long. Any recommendations or tips?
Thanks!
If you get them now as an individual, it’ll cost you $200/each to transfer them to a trust.
Once the trust is set up (and it’s an easy process with SS as I understand it), it’s actually easier to fill forms out as you can skip parts of it. Just make sure you use your trust name and not your name.
ETA: read it again and see you’re using Silencerco’s trust, not Silencer Shop…probably just as easy, I just haven’t seen many reviews
Aha, I see. Seems to make more sense to do the trust first then.
Do I have to set up another bank account as the “trust’s account” to pay for the stamps, or is that just a recommendation?
As mentioned, if you get the items as an individual, and then transfer them to a trust, you will be spending an extra $200 per item.
The primary difference between a trust and individual is that you do not need the fingerprint cards, pictures, or cleo signature on a trust file. You also dont need the citizenship form.
However, trustees picking up an item done on a trust do have to submit to a standard nics check at pickup, like purchasing a firearm.
Btw, that wasnt actually a requirement until someone wrote a letter about it.
Cost is the same, excepting the original fees of setting up the trust.
There has been endless debate over setting up your own trust versus paying an attorney. After weeks of research, i could find that general “willmaker” or “quicken” type trusts are general, and may be invalid in some states. I also could only find reference to one instance where a trust was found invalid after being done, and atf informed the owners that they had a certain amount of time to get a valid trust, or be subject to confiscation. However, there are many home trusts that seem fine. So, that is up to you as an individual.
I purchased one from an attorney. A few hundred dollars is way cheaper than one day of legal defense in fed court, and was cheap peace of mind. Atf does look at trusts now, so if there is a problem, it should just be denied, before there is a real problem.
No bank account required. I usually send a money order, but people send personal checks. Also, if doing an f1 by efile, you have to use a credit card anyway.
If youre married, and your spouse likes guns, its nice.
My wife is also a trustee, which means i can call her at home, and she can legally bring me something thats registered on the trust. Not to mention, her having the safe combo isnt an issue.
The kids being trustees is kind of not an issue, as with a trust, if they are beneficiaries, the trust goes to them while it still owns the items, no transfer fees. However, it dies at the end of the beneficiaries lives.
Estate transfers to beneficiaries listed in the will are also fee free, so thats a wash.
It sounds complicated but once established, it is much less of a hassle when purchasing any NFA item that you want from then on. Find a local attorney that specializes …my LGS recommended one.
While this is true, the lawyer who set up my trust strongly recommends a separate account to preclude the appearance of an improper purchase/transfer. The point being that down the road, the ATF might decide it does care where the money came from. YMMV
No surprise your lawyer said that. Some “gun trust” lawyers spout all kinds of stuff that’s unnecessary.
For all of my F4 purchases, the dealer actually paid for the stamp, and I paid him. I did set up an account when I got started because I didn’t know any better. I wrote two checks. After that, I’ve used personal CC/check for the next two dozen plus stamps.
Where the money comes from doesn’t show ownership. The fact you put the trust name as the maker/transferee is what gives ownership as far as the ATF is concerned. Adding them to the trust via Assignment Sheets, Schedules, etc (depending on your trust) handles the trust side of it.
As Grantor/Settler/Trustee, you have the right to buy property on behalf of the trust. The trust itself doesn’t have a job or any income to buy NFA items. You’ll either put personal money into the trust, then have the trust buy it…or spend the money directly on behalf of the trust. Same end result. That’s the whole purpose of a trust, to hold property on behalf of somebody.
Thanks, I wondered about that. My lawyer is very conservative from what I can tell. I’ve already taken care of the Assignment and scheduling, so my trust stuff is all set. I was waiting to submit my Form 1 until I had an account for the trust. Now, thanks to your Form 1 tutorial I’m actually ready to go.
The lawyer who did mine is a gun guy, and actually talked with atf about what they would prefer to see in a trust. He never said you needed an account. I just used a money order for the f4s, and a cc for the f1 i efiled.
Yes, once set up, the trust is easier. No pictures, no having to get fingerprint cards or arranging to get the signature. You can show up at your lgs with your paperwork, do the f4, and walk out to begin the wait. Otherwise, youre taking the forms to come back later, and then they get sent off.
The llc thing works, but at least here requires yearly upkeep, so is more constantly involved. If you already have one, great. I suppose it could work for those who want to share with others outside immediate family. As i understand it, a group of friends wanted to set up a trust, and they all lived in different locations, so that didnt fly.
Atf wants two things. They want the money, and they want a pretty good idea of where to find it, should they have a need.
I set up an LLC about 15 years ago which just holds NFA items. I did not know about Trusts back then and “may” have gone that route but setting up an LLC in PA is pretty painless. Once it is set up it does not cost anything yearly to keep current. You can name officers (family members) so people other then just you have access to your items if you wish. I cant remember but I think it cost me $85 to set the LLC up. You do have to file a tax return every year but it takes all of about 5 minutes to print out the return on line and put all zeros in the columns since the LLC does not sell anything or do any commercial business. Regardless if you go Trust, LLC, or Corp route, not having to get CLEO sign off, fingerprints, and photo’s makes it well worth it (IMHO). Many people say it takes the same amount of time to get your Forms approved but I truly believe they are faster if not sent as an individual. My last Form1 took a long time at 5 months mailbox to mailbox. Before that my longest approval time was 64 days and the shortest was 21 days and that was for a total of 13 Form1’s and Form4’s.
Thanks got the info guys. I’ll be going the trust route I think, and go from there. CLEO sign off is painless here, but there are so many other benefits that it’s still worth it.
I’m very new to NFA as well…but following the advice of the guys at my LGS, this is how I went about it.
First I decided that I would start with a .22 suppressor.
I picked out the one I wanted and made the purchase…which sets the item back for me in suppressor jail. Before I left, they handed me a trust form to fill out which I returned the following week with payment. After I dropped off the form with money order, I also paid the LGS for the tax stamp.
At this point, I’m waiting for my trust to come back from the attorney. When I get the phone call, I’ll contact my other trustee…and we’ll go up there to sign the document and get it notarized. At that point, the LGS can fill out the form 4 and send off a copy of my new trust as well as the payment for the tax stamp…that I have already paid for.
So…the wait begins.
The cool thing is, they will allow me to go up and shoot with my suppressor…I just have to give it back to them before I leave.
I suggest that you get a lawyer who is familiar with NFA trusts draft the document. Those who are planning to go the cheap route should read these comments from the ATF’s lawyer at this year’s NRA Firearms Law Seminar:
ATF likes lawyer drafted trusts, most trust problems are from gun store trusts, free trusts, or trust form that individuals try to create themselves.
ATF has seen many trusts which name the same individual as the beneficiary. It would appear that all of those people are just copying the trust from someone else. They believe that one day this random person could inherit thousands of NFA firearms. :suicide2:
The blog’s author goes on to describe how the EasyTrust being floated by SilencerCo sets up several violations of the NFA. Granted, he has a financial interest in attracting business, but I’ve not heard of any problems with his trusts.
There are so many rubs with a trust. I’m not sure there’s anyone at the ATF qualified to review one and legally opine as to its sufficiency. There’s only one thing worse than a lawyer and that’s a lawyer employed by a governmental agency.
DISCLAIMER: I’m not a lawyer but I am client of David Goldman of GunTrustLawyer.com. I spoke with David at length about this very issue when I set up my trust in 2010. He notes that this was such a hot button issue that he includes the rationale for a trust account in the instructions package that comes with every trust. His argument for a trust account goes something like this:
It is pointless to argue the various legal theories against an account because the ATF has gone on record to say that using individual funds to buy property belonging to a trust is a technical violation of the NFA. He goes on to say that the ATF’s position is that they do see private funds being used as an indication of an individual taking ownership, and an individual must first complete their own Form1/4, get CLEO sign-off, and purchase a separate stamp prior to donating the NFA item to the trust (which is another stamp and paperwork). He notes that the ATF admitted that such technical violations are not at present the focus of their investigations, nor with they likely ever get any attention. However, the ATF at any time could change their mind and start enforcing this interpretation of the law. He feels that while individuals caught doing this may very well prevail in the end, they could face huge legal fees in their defense and forfeiture of their NFA weapons, fines, and prison if the government gets a friendly jury. Considering that most trust checking accounts are fee, can be set up online, and close this loophole, he feels obligated to recommend them.
That is his take on it and his judgment seems sound. I also question the wisdom of sending a personal check to the ATF from a non-trust account. You are essentially giving them the written evidence to charge you should they decide to get a bug up their ass.