Multiple Person Texas NFA Trust (revocable shared living?)

[ds0110]

Ive been interested in forming a trust to get nfa items. Ive read on the ar15/silencertalk forums, and googled as much as I could about this, but most of the info ive found has been regarding one person using/owning the nfa items. In my situation, i'm trying to set it up so that the trust includes 2 people (non married) owning the nfa items. Im aware of the chance of falling out, and them being able to sell the items, this is not an issue to me.

So far, what it seems that im after is a Revocable shared living trust. This is for Texas. My partner and I are the grantors/trustees. His spouse is the beneficiary, and a mutual friend of the grantors is the successor trustee. The property in this trust at this time is just the nfa item.

Here is a basic copy of the trust. I replaced our names with initials. I dont know the details of the suppressor yet so i just put "suppressor make model serial" (until that info is known?)

http://www.fileden.com/files/2006/11.../testtrust.rtf

Due to this being more than a typical one person, one nfa item setup, I first doubted being able to do this without a lawyer, however, after more research it seems this should be possible. Am i going in the right general direction by choosing a shared living revocable trust? Ive heard its not possible to set this up correctly with quicken, is that true? I also heard that its not possible to have 2 people as grantors/owners of an nfa item per:

"See 26 U.S.C. section 5841, as
implemented by 27 C.F.R. section 179.101. For purposes of these
statutory provisions, the term "person" is defined as "[a]
partnership, company, association, trust, estate, or corporation,
as well as a natural person. See 27 C.F.R. section 179.11. This
definition does not include married couple or, for that matter, any
other dual or multi-party entities with the exception of formally
established partnerships, companies, associations, and
corporations. Indeed, there exists no statutory or regulatory
authority that can be construed to permit the transfer or
registration of an NFA firearm, on a joint basis, to two or more
natural persons, including two natural persons constituting a
married couple. Accordingly, such transfers and registrations
cannot be approved."




Additionally, i found that per texas law:

"Sec. 112.001. METHODS OF CREATING TRUST. A trust may be created by:

(1) a property owner's declaration that the owner holds the property as trustee for another person;

(2) a property owner's inter vivos transfer of the property to another person as trustee for the transferor or a third person;

(3) a property owner's testamentary transfer to another person as trustee for a third person;

(4) an appointment under a power of appointment to another person as trustee for the donee of the power or for a third person; or

(5) a promise to another person whose rights under the promise are to be held in trust for a third person."


So im guessing I fall under either 1 or 2 on that list?


Thanks to all who took the time to read this. I have a bad habit of making things more complicated than they are, I think this may be the case here.

[Joat]

Contact Sean Cody Here He is a TX attorney well versed in NFA trusts.

Joat

[RAnb]

I'm not a lawyer, but a trust is a legal entity, not a person or people except as defined in section 179.11. The trust owns the weapon, not the persons in the trust.

I created a shared revocable living trust with my brother a few months ago and he submitted an ATF form 1 using that trust. When the ATF approves or disapproves it, I will post the details on this forum. It might take another 2-3 months though.

On Silencertalk (I think) a guy had posted a copy of his approved ATF form 1 that had the owner listed as a shared revocable living trust with him and his wife as grantors.

Ranb

[David Hineline]

http://www.guntrustlawyer.com/2009/0...for-class.html

[ds0110]

thank you RAnb, now im aware this kind of 2 person, non married trust is possible. Please do update with details. Did you list yourself and brother as grantor/trustee, and if so, what did you do about the beneficiary? (who cant be the same person as grantor - i assume you could put anyone though)

[Bartholomew Roberts]

I hope that whoever MT D is, it is someone that you trust a great deal and that they are NOT a trustee or the successor trustee as well.

If your question is "Can I create a trust that the ATF will approve using Quicken Willmaker and no lawyer?" then the answer is "Yes"; but you should understand it is a really bad idea - especially when you start getting buddies involved. Buddies, wives of buddies and future beneficiaries of buddies? You must really trust all these people in order to rely on a basic computer generated form trust.

[ds0110]

NC, MD - grantors/original trustees; beneficiaries of each other
CD - successor trustee
MT D - decides if items can be given to CD if both NC and MD are incapacitiated


If it were possible to make it so its only my partner and I, then that would definitely be the optimal scenario. With just us two as trustees and grantors. (so that we both have access to the items)

Willmaker makes it seem like the grantors/original trustees must have someone to give the items to,a successor trustee, it wouldnt let me complete the form without that so im assuming that is needed?

Then it wanted someone that is able to judge if me or my partner are incapacitated so that the property could rightfully be transferred to the benefactor. So thats 2 extra people it wanted.

For MT D to get involved, both I and my partner must be unavailable, and even then he only has power to give it to CD. For CD to get involved, 3 peoples actions have to all line up? Do I have something misunderstood there? Willmaker made it seem pretty basic, but then everyone says it is...

[RAnb]

The grantors/trustees are my brother and I. The beneficiary is his son. I also designated alternate trustees and a person to determine when the alternate makes decisions. It was easy to make using Quicken will maker. I will post when it is approved/disapproved.

Ranb

[Bartholomew Roberts]

If it were possible to make it so its only my partner and I, then that would definitely be the optimal scenario. With just us two as trustees and grantors. (so that we both have access to the items)

There are three roles necessary to a trust: grantor or settlor (the person who gives the trust property or money), trustee (the person charged with watching over the property or money and taking care of it), beneficiary (the person who receives income or property from the trust at some later date).

The grantor, trustee, and beneficiary cannot all be the same person.

Willmaker makes it seem like the grantors/original trustees must have someone to give the items to,a successor trustee, it wouldnt let me complete the form without that so im assuming that is needed?

A successor trustee is a trustee who acts if the original trustee is unwilling or unable to assume the role. It is often a good idea; but it isn't necessary to name one and may not be desirable in a case where you already have co-trustees. Willmaker wouldn't let you do it without one because it is a form trust. You put in the information and it fills in the blanks on a pre-printed form. If you had not named a successor trustee, then the whole section regarding incapacity and other issues wouldn't make any sense and Willmaker isn't smart enough to do it any other way.

Then it wanted someone that is able to judge if me or my partner are incapacitated so that the property could rightfully be transferred to the benefactor. So thats 2 extra people it wanted.

Did you read that incapacity provision? Reading those terms, it can be argued that MT D can basically remove either you or your partner or both of you from the trust on his own judgment. That is a lot of power to grant someone. Again, you are limited because it is a form trust.

For MT D to get involved, both I and my partner must be unavailable, and even then he only has power to give it to CD. For CD to get involved, 3 peoples actions have to all line up? Do I have something misunderstood there?

No, MT D can get involved any time he judges one or both of you are incapcitated by stating it in writing. According to the terms of a trust, it doesn't matter what a court or a doctor has said. This means if you disagree with MT D's assessment, then at a minimum, you are going to need to take it to jury trial/settlement and that is likely to be expensive.

If you or your partner are incapacitated, then the other one becomes sole trustee until you are judged capable of handling your affairs by MT D. If both become incapacitated it goes to CD.

A couple of other things to consider:

1. You said your buddy was married. In Texas, any property acquired during marriage is presumed to be community property. Your Trust even includes some vague and poorly worded language about property retaining its nature as separate or community and it also implies that some of you and your buddies property is community property?

NFA stuff isn't cheap. What happens in the event of a divorce? How much of that property can your buddy's wife claim as community property of their marriage? With the way it is worded, I bet I can make a decent argument that some of your property belongs to the wife as well - or at least I would sure make that argument as her lawyer.

2. You guys named each other as beneficiaries. What happens if neither one of you are around? Who gets it then? For that matter, how can your buddy grant community property to the trust to begin with without his wife's signature (because she has a half interest in that property)? I didn't see any provision for her to sign.

Willmaker made it seem pretty basic, but then everyone says it is...

You can have the most horrific, screwed up, barely legal trust document in the world and it will work just fine if nobody sues anybody or tries to clarify any of the poorly described legal rights created by the trust document. so in that sense, it is pretty basic.

For example, I just painted my house - or started to anyway. I mean it is pretty basic right? You can't get much more basic than slapping paint on a wall. Yet, you should see the difference between the rooms I painted and the ones painted by a bunch of guys who don't even have high school degrees. Knowing how to apply the basics is a valuable skill regardless of how basic what you are doing is and just because you have read about something, doesn't mean you have the experience to apply it well.

This is what you pay a lawyer for. And while I am a lawyer in Texas, I am not YOUR lawyer and I cannot give you adequate legal advice on this issue over the Internet. I did no research or investigation into the questions I had about your form trust and unfortunately, I am plenty busy with work right now and couldn't take you on as a client; but please do call some other lawyer and talk to them. If you are around Houston, Sean Cody has been doing this for a couple of years now and has helped out other guys I have talked with.

[ds0110]

very detailed reply with good points to look out for, Bartholomew. Thank you.

Id still be very interested to see RAnb's trust, if it is accepted...and its nice to know successor trustees arent needed. Im trying to do this with as few people involved as possible.

If no one but myself and the other grantor know about this trust (i dont think im obligated to tell anyone else anything), there seems to be a little less to worry about as far as suing, stealing, selling etc. My main concern is with the batfe, and everything being to their liking. With no successor trustee involved, its down to my buddy, me, and one other person. His girlfriend of years (living together, i think that makes them commonlaw married? i digress) isnt the best person to name as beneficiary I see

Neither of us have children, but im sure we can come up with a beneficiary trustworthy enough (to lock the items away, or sell them at worst; and not shoot anyone with them or give them away to an unlicensed person) if both my partner and i become incapacitated.

Thanks again to all that replied, as this thread has increased my knowledge about this subject a great deal. And please do update, RAnb, if your request is accepted.

Unfortunately, Im in the dallas area instead of houston, otherwise I might consider sean cody if I cant find a definitive answer to this.

[Bartholomew Roberts]

ds0110, you need more than just living together to be married under the common law in Texas. There is a specific legal test for it. However, that is one issue you want to be clear for yourself since whether or not your buddy is married is going to affect what is necessary for him to give property to the trust.

[RAnb]

I will post a copy of my trust (without personal data) if the form 1 is approved. I have to say that it would not be a good idea to directly copy it unless you live in WA as other state laws might differ. It is also a good idea to get the assistance of a lawyer.

AFAIK, the only people who really need to know about the trust are the grantors and trustees. The alternates and beneficiaries are not required to be informed. When I drew up my trust, I asked those people I designated if it was okay with them. I just told them what the trust required of them in the event of my premature death and they agreed. The only other person besides the granter/trustees who should know about the trust is the executer of your estate. He or she will want to know of its existence so the beneficiaries can be informed of the property they are receiving when you pass on.

Ranb