View Full Version : Buying Class 3 firearms "in trust"

December 8, 2012, 11:02 PM
Can some one explain why some one would go the route of a "trust" to buy Class 3 firearms (e.g. Suppressors, full-auto guns) and what this means? As opposed to buying as an "individual"?

December 8, 2012, 11:15 PM
Probably the best reason for going the trust route is that if you live with someone (a spouse, for example), you can add them as a trustee and they can have access to the item too. Otherwise, it will need to be stored in such a manner as to prevent anyone other than you from accessing it.

You can also set the trust up so that your heirs become trustees when you pass on--preventing any legal hassles or expense on their part if you wish to leave them the items.

December 8, 2012, 11:43 PM
It's also faster since there's no need to go to the Chief LEO for a signature, and in some areas where the CLEO is not willing to sign Form 4's it's the only way to actually get your transfer approved.

December 9, 2012, 01:25 AM
Ok thanks guys. I was thinking of the "if I were to pass on suddenly" as one of the reasons to buy "in trust".. that my firearms (Class 3 or not) could be passed onto a family member. Though, what if they don't have permits? What then? How does one legally transfer our firearms to the "right people" properly?

Another way I heard Class 3 firearms could be bought is if you were a corporation? Why would a "corp" need Class 3 firearms? Bodyguard companies? Would the secret service not be called if some one needed protection with full-auto weapons?

The third way is if you are buying as an "individual"...self-explainitory.

I'm asking out of curiosity. I live in California...need I say more..heh!!

December 9, 2012, 01:38 AM
Why would a "corp" need Class 3 firearms?It's not really a matter of why, simply that the law allows that method of ownership/possession. That is, I don't believe you have to come up with a reason in order to set up a corporation to own/possess Class 3 firearms, you just need to satisfy the legal requirements set forth in the law.I live in California...As is true in any state, you must satisfy both state and federal laws. The fact that something is legal at the federal level does not have any bearing on whether it's legal at the state level, and vice versa.

If your state's laws set forth additional requirements for owning NFA items, over and above those stated in federal law, then you will have to abide by your state's requirements in addition to the federal requirements.

December 9, 2012, 03:43 AM
If it's about "satisfying the requirements as a corp..."...why goes this route vs applying as an "individual" or "a trust"? Some one said it's faster to apply "in trust"...

As for my "...I live in California..." comment all i meant was being that I live in CA it would be pointless for me to look into Class 3 firearms in a state where you're limited to 10+1 rounds in pistols..where CCW is next to impossible...forget OC...etc.

Was just a question I wondered about. That and what does a firearms owner do to legally transfer the ownership of our firearms on the event that none of our family/friends have permits or are even anti-firearm. Could we setup an estate auction where our firearms are only sold to permit holders? What if there are none?

December 9, 2012, 08:16 PM
My NFA trust specifies who will receive the weapons "it owns" in the event something happens to me. It was done by a lawyer who does them quite often, I'd imagine it's pretty common to have a clause like that included. As long as the person named can legally own firearms there should be no issues.

December 9, 2012, 10:12 PM
tmarone. Did you mean if that person already had the permits or as long as that person didn't have a criminal record? This is what I'm wondering...haven't spoken to my lawyer about this (should I pass suddenly...do I have to name some one in the family with firearms permits). Class 3? Non-issue for Californians. :)

Don H
December 9, 2012, 10:44 PM
What firearms permits are you referring to?

December 10, 2012, 08:40 AM
Just curious, who are typically the beneficiaries under an NFA trust, and what triggering events would cause the Trustees to distribute the Class III stuff to those beneficiaries? Or, are they set up that on death of the the creator of the trust, the NFA items must be sold?

December 10, 2012, 12:27 PM
Having recently gone through the process the details provided to me are still fresh in my mind. Disclaimer - this is not legal advice only my recollection of how the process was explained to me.

A trust has to be tied to some event in which the trust will dissolve. In my case, while myself and my wife are co-trustees the trust is tied to my lifespan. IF my wife passes before I do, nothing happens and I can continue to own the items held in trust. If I pass before she does then she will need to establish another trust to move the guns into. My understanding it at my passing the guns would need to be turned over to a licensed dealer to be held until her trust is established and the proper forms filed to transfer the guns from my (now dissolved) trust to hers. There would of course be a legal fee to setup the trust and the dealer would most likely charge a transfer fee to assist with paperwork but it is my understanding that the tax stamps would not have to be repaid for each item.

Along those same lines if she passes before me at the time of my passing the items would go to the next person specified in my trust. In my case, I have it written so that my eldest child (currently childless) would be next in line and that if no children are present items would go to a specified friend. The sames steps above would apply.

To sum it up the largest benefits of a trust are (in SC - can vary by state)
1) ability to bypass CLEO signoff
2) ability to share ownership with spouse / other parties
3) ability to pass NFA items to designated recipients at time of death without needing to re-pay the tax.

Lastly, with all of this consult your local and state laws. For example I was able to pick up a rather good deal on a SMG recently in NC because the dealer told me the sheriff in that area was not signing off on Form 4's and that NC law does not allow the use of a trust for SMG ownership making it hard to sell. Other states have no issue with trust ownership of smg's.

December 10, 2012, 01:30 PM
Thanks jclayto. That was what I was wondering...what happens when we pass and we happen to have no gun permit holding family or friends. As you mentioned, in your state, the firearms would be held by said gun shop till the named next in line trustee gets a licence. Assuming they are willing or have a faint interest in guns. However, if they are all anti-gun...I suppose provisions could be put in place (of course with the help of a lawyer) to maybe auction off the firearms to permit holders only. Etc.

cya around the forum..

December 10, 2012, 06:03 PM
Uh, no, a DEALER cannot hold the guns in order fro a trust to be settled. That would be an illegal transfer. Actually the guns (assume NFA) could be held by the estate executor who most likely would be your wife anyway until a Form 5 could be executed without tansfer tax.

A trust is not at all required in order to assure transfer to a family member upon your death. Any legal heir can receive the guns upon approval of a Form 5 which is usually done pretty quickly, and all that's required is that your heir be named in your will.

Your state/local law may have other requirements. These are federal.

December 10, 2012, 06:31 PM
Sorry for the delayed response guys...

Skans- According to my lawyer the beneficiaries can be whoever I designate. The only reason I'd give them up would be in the case of my death or if I was no longer able to own firearms (felony conviction or something). For my trust it was a little tricky because my parents live in CA and can't take my stuff- and they aren't "gun people." Since they would not be able to take them, and would not really appreciate their value, my trust states that they are given to an old military friend of mine. That friend is an avid shooter, and would be a great home for my stuff. Similar to a will for guns if you will.

BDD8- There aren't really any 'permits' involved. To own title II weapons (suppressors/silencers, machine guns, short barreled guns, etc) there are two ways to go. One, is the trust route, that as explained above is popular for the ability to bypass the CLEO. In my county the CLEO won't sign a form 4 for even his own deputies, so it's not worth it to bother. I got a trust, and that's what "owns" my weapons- just so happens I own/control the trust. As far as what you're asking for CA law I'm a little confused. Are you trying to find out if you can own any of those things there? Going off memory, I'm pretty sure that for non-law enforcement purposes title II stuff is illegal in CA. Like the guys above have said, you can own them federally but have to be able to satisfy state law too. I lived in WA for a while, and you can own suppressors there but SBR's aren't legal in the state so you cant get them there even though they are federally legal. If you want to figure out what you are allowed to own in your state there are several websites that provide great info. Check out www.aaccanu.com - it's a site run by Advanced Armament that is an excellent source for people new to dealing with the NFA.

Medalguy- You make an excellent point about the form 5. Makes me wonder if something were to happen to me, that the trust would just act as a living will and direct my NFA goods to be transferred to the individual named. The way my lawyer explained it to me is that in the event of my death- that named individual would already be on the trust and be immediately able to possess the items contained within.

December 10, 2012, 09:34 PM
Medalguy - thanks for the input. I need to check back with my lawyer just to make sure that I understand where the items can legally reside after my passing until a F5 transfer can be completed.

December 12, 2012, 12:16 AM
tmorone-- That depends on how your trust is set up. If the trust terminates at your death, then no, the guns could not be posessed by anyone else until they were transferred by BATFE to the named heir.

This is one good reason to have a lawyer very familiar with NFA trusts set up the document. It's not something we can do easily with Willmaker or other cheap software. It's worth a couple of hundred bucks to know it's been done right.

And no, I am NOT a lawyer, but I did have a lawyer draft MY trust.

December 12, 2012, 08:55 AM
I suppose the easier thing to do is just have the Trustee (or successor) sell them on your death and distribute the proceeds to the beneficiaries. Why go through the hassle of trying to transfer them to individual heirs unless you know your son, daughter, etc. really, really, really wants it? Well, I'm basically referring to machine guns.

Silencers? What if the Trust has several well used, outdated (old tech) silencers when you die? This could be like getting rid of a rusty old car muffler coated in toxic waste that nobody wants! What then?

December 12, 2012, 08:39 PM
Silencers? What if the Trust has several well used, outdated (old tech) silencers when you die? This could be like getting rid of a rusty old car muffler coated in toxic waste that nobody wants! What then?

The hier or executor of the trust can just destroy them. Destruction of NFA items is perfectly legal.

December 15, 2012, 01:38 AM
I did not know about this route, seems like a better idea than convincing the local police officer in charge that he should sign a form to let me have a silencer and go through fingerprinting and a thorough background check before I can even consider applying for a stamp.

December 15, 2012, 02:35 AM
Good luck getting that signature. It isnt easy in a lot of places.

December 17, 2012, 11:53 AM
That is EXACTLY why so many are buying NFA items through trusts these days. No CLEO signoff required.