[Skans]

Actually, the question about "what is a trust and what is it for" is a good one. You really need to start at the beginning if you intend on using one of these to obtain NFA items.

A trust is based on a special kind of written document. It can be used for a variety of reasons, but traditionally it is used to to devise or transfer your important "stuff" (stocks, bonds, bank accounts, financial assets, land, home, guns, jewelry, antiques, and other valuables) to your wife, kids, friends, etc on your death.

Very basically, you transfer title to your stuff to the XYZ trust that you set up. You name a trustee to look after this stuff and set out a bunch of rules, requirements, and contingencies that the trustee must follow in handling or giving away your stuff. In any trust, there are typically three sets of people: the Settlor, the Trustee (co-trustees and alternate trustees), and the beneficiaries. The Settlor is you - the person who establishes the trust. The Trustee can also be you during your lifetime, but it can also be someone else that you wish to designate should you become incapacitated. On your death, the trust you set up will designate a "trusted" individual to take over as trustee - this could be a co-trustee or successor trustee. The trustee is the person in charge of caring for the stuff placed in trust, selling the stuff if necessary to pay obligations of the trust, and then distributing the stuff to other people when you die or when some other event is stated. The beneficiaries are those folks who get the benefit of the stuff placed in trust. During your lifetime, it is usually (not always) you. On your death, it is usually your wife, kids, friends, and charities.

So, how does your stuff get into a trust? Well, with bank and securities accounts, you typically have to re-name or re-open those accounts in the name of your trust. Vehicles can be transferred into trust by re-titling it in the name of the trust (although not usually advisable). Personal property, like non-NFA guns are typically transferred by Bill of Sale - just a document showing that you have transferred specified guns, etc. into your trust.

Trusts are often used to avoid probate - i.e. avoid having your relatives having to go to court after you die to deal with all of the stuff you own and is titled to you. That is primarily what they were intended for. With a trust, there typically is no need to involve the court in your private affairs - it will all be handled by your trustee in accordance with the directives you give him in your trust. There are many types of trusts and many other reasons why trusts are used other than to avoid probate - too involved to discuss here.

People use trusts to acquire NFA items because: 1) you don't need to get the CLEO to sign off on your Form 4; and 2) unlike a corporation or LLC, there is no initial or annual fee that needs to be paid to your state for setting up and maintaining a corp or LLC. These types of trusts look a lot like the type of trust used to avoid probate - they basically work the same way. Machine guns, silencers, etc. typically have to be acquired in the name of the trust. This is basically an ordinary trust, but may have some specific provisions for NFA purposes. I suppose you could transfer NFA items you own into a trust, but then you'd have to do the transfer paperwork, use a Class III Dealer for the transfer and pay the stamp tax again.

Hope this wasn't too confusing.