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Trust or not?????

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CitizenClark:

--- Quote from: whatsit on January 11, 2014, 07:31:19 PM ---A good trust will include instructions about what to do with your NFA items.

--- End quote ---

In fact, describing who gets the trust property is sort of necessary to having a valid trust at all.

A trust is a relationship as to property in which the legal ownership of a property is divided from the beneficial ownership of that property. The trustee acts like an owner as far as the rest of the world is concerned, but his legal ownership of the property as trustee is subject to the beneficial interest held by the beneficiaries. Defining that beneficial interest is a necessary part of creating a trust—it is really the purpose of the trust.

Generally speaking, non-charitable trusts are designed to dissolve at some point, and this means ultimately distributing the trust property to beneficiaries and consolidating the legal and beneficial ownership of the trust property. For most gun trusts, the creator of the trust (the "grantor" or "settlor") is also a trustee, and is a life beneficiary (someone who enjoys the use of the trust property for his lifetime), but the remaindermen (beneficiaries who receive whatever remains when the trust wraps up) actually get the property free and clear of trust. People usually choose their descendants for this role, but sometimes they choose a close friend, a nephew, etc.


--- Quote ---However, I believe even without a trust, an item can be transferred with a form 5 (someone check that for me) upon your death. I know some guys just fill out a form 5 (again, I think that's what it's called) and keep it in their safe with their items, so their surviving relatives can fill it out with very little effort.

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Correct, the involuntary transfer of an NFA firearm from your estate would go on a Form 5 and would not be subject to a transfer tax. Different NFA Branch examiners differ on how to treat a distribution from a trust: some will allow this to go tax-free on a Form 5, and others say this sort of transfer can only be done on a Form 4, tax-paid.

This is one aspect for which using a trust is less advantageous than applying to make or transfer the firearm as an individual.

Mntnman:
If I personally own NFA items and want to start a trust, will there be a transfer fee to put them in the trust?

FarmerRick:

--- Quote from: Mntnman on May 16, 2014, 06:28:03 PM ---If I personally own NFA items and want to start a trust, will there be a transfer fee to put them in the trust?

--- End quote ---

$200 each(along with the nearly year-long wait)just like any other transfer of a NFA item.

Mntnman:

--- Quote from: FarmerRick on May 16, 2014, 06:43:18 PM ---$200 each(along with the nearly year-long wait)just like any other transfer of a NFA item.

--- End quote ---

Thanks, bummer.

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