Self done NFA trust

[Skans]

In any case whenever this comes up and a lawyer (or someone that has shelled out hundreds of dollars to one) always frowns upon the inexpensive solutions, claiming how someone had legal action pending against them or it turned out “badly” like GoingQuite stated in post #8. When you ask for specifics or examples you hear crickets…

You missed the point. I agree that a form trust might be good enough to get BATFE to approve your form 4. What I'm saying is that buy using Trusts, Corps, or LLC's in general, all it takes is a "special ruling" that says you need some other Form XYX - with a CLEO sign-off - if you intend to actually use the machinegun / silencer, etc. other than simply holding it for investment purposes. Simple as that. Or, state law or local law can simply say "can't use" by beneficiaries of Trusts, LLC's or Corps.

My only points are this:

1) if you can get a CLEO sign-off, then don't fart around with trusts, corps or LLC's; and

2) if you have to fart around with trusts, etc. be very careful what you buy and how much you spend. Personally, while I might spend up to $5,000 in NFA stuff if I had to stick it in a trust, that would be about my "pain threashold" if some new dumb law takes away everyone's rights to use our toys.

And just one more thing - the more folks use corps, llc's and trusts to get around having to have CLEO's sign-off on their Form 4's, the more likely it will be that you will see some of these new dumb laws that I spoke of.

[jmorris]

As long as we are being hypothetical “they” could just do away will all civilian ownership of all NFA and come get them from everyone. If “what if’s” keep you up at night then investing in firearms in general is not a good idea.

Just because you can’t get CLEO sign-off doesn’t mean you are a bad guy. You might not be friends from childhood or donated any money to their campaign, who knows.

The other benefit with the trust/corp. direction is that you don’t have to go back every time to jump thorough the signoff, finger print, photo hoops every time you want a new toy, just print a new copy.

[PhilR]

Question - If you do a living trust and buy one NFA item, on any subsequent purchase do you need to amend or re-do the trust? I'm guessing you will have the items listed in your trust. I've just started looking into the trust thing.

[Skans]

As long as we are being hypothetical “they” could just do away will all civilian ownership of all NFA and come get them from everyone.

Not really. There's a huge difference between BATFE saying "turn 'em all in" after you paid the tax stamp and BATFE approved the transfer and BATFE passing a "special ruling" saying that benificiaries of corps, llc's and/or trusts have no right to use the NFA itens until they get a CLEO sign-off. BIG difference.

When every Tom, Dick and Harry are using trusts to buy silencers - let's see how long that's permitted to last. Until then, I just might use one myself to get a couple silencers - I'm not against them at all, just want folks to have their eyes wide open on this.

[Bartholomew Roberts]

If all you are concerned about if getting an NFA item into your hands and could care less what happens to that item after you die, then using Quicken or a form trust still leaves at least these issues to be concerned about:

1. Quicken never updates its language. If one of its forms is later proved invalid in a court battle, you won't even know it happened, let alone know what language needs to be changed in the trust.

2. The Quicken form trust includes an incapacity provision. This allows the person named here to take control of all of your NFA stuff in the event you become incapacitated. You are going to want to pay special attention to how difficult or easy it is for you to be declared incapacitated under form trust terms.

3. Quicken often gives generic advice that negates some of the benefits of a trust. For example, Quicken will tell you to register a trust at the county courthouse. In Texas, this isn't necessary and makes your NFA items (and trust) a matter of public record - which negates one of the advantages trusts have over LLCs.

Quicken can be an appropriate way to set up an NFA trust assuming that you don't plan to place very many valuable items in the trust (suppressors or maybe SBRs), can keep the number of people involved with the trust to an absolute minimum, trust the people around you not to screw each other and you over, and have very basic legal needs.

If you are actually concerned about who gets what after you die, then a form trust is far from ideal but will probably work assuming your relatives are all honest and have good relations with each other that they value more than your stuff.

If you are thinking about putting any type of machinegun in a Quicken trust, that is just a bad idea. Even a cheapo Cobray costs $5,000. Spending $600 is cheap insurance to make sure you don't lose an investment that is only going to increase in value as long as the 922(o) is around.

Originally Posted by demigod

Nonsense. No different than anyone who drafts it themselves. If it were practicing law, then Legalzoom.com would not exsist.

That is absolutely practicing law in Texas. I can't speak for other states; but I'm pretty sure it is practicing law without a license in the majority of them. The reason Legalzoom.com and legal forms exist is because while it is illegal for OTHER people to practice law without a license, it is quite legal for you to play at being your own lawyer - just like you can be your own plumber, barber, bartender, doctor, etc. without having to go out and get any of those respective licenses.

This is also why software like Quicken, LegalZoom, and legal form books all come with the prominent "Consult a lawyer in your state" warning on them - to avoid problems with being charged with unlicensed practice.

Frankly, I don't have any big problem with unlicensed people practicing law. It is a lot cheaper to do it right the first time than it is to go back and correct the mistakes after people are fighting over them. There is a lot more money to be made in the latter for lawyer - and self-help legal forms are a never-ending bounty of that kind of work.

[jmorris]

Question - If you do a living trust and buy one NFA item, on any subsequent purchase do you need to amend or re-do the trust? I'm guessing you will have the items listed in your trust. I've just started looking into the trust thing.

Yes, you add every approved item to the “Schedule A”, that’s all you have to update.

1. Quicken never updates its language. If one of its forms is later proved invalid in a court battle, you won't even know it happened, let alone know what language needs to be changed in the trust.

If I had my trust set up by a lawyer in 1970 or last year for that matter, could the same thing be true?

If you are thinking about putting any type of machinegun in a Quicken trust, that is just a bad idea. Even a cheapo Cobray costs $5,000. Spending $600 is cheap insurance to make sure you don't lose an investment that is only going to increase in value as long as the 922(o) is around.

Untrue, you can get them under $3k go check out subguns.com. $600 also happens to be the price of 3 additional tax stamps.

[Bartholomew Roberts]

If I had my trust set up by a lawyer in 1970 or last year for that matter, could the same thing be true?

Depends on your lawyer; but it could be true. However, there are some important differences between Quicken and a lawyer.

1. The lawyer wants to continue a good customer relationship from you because he wants your future business; while Quicken may also want your future business, it probably isn't economical for them to give you that level of attention.

2. If I draft an NFA trust (hypothetical only, I don't do NFA trusts because I already have plenty of work), you can bet I am high on the list of people who hear about it if that trust is declared invalid. I've got an immediate interest (in the form of avoiding malpractice and ethics complaints) in correcting any additional problems before they make it to court. If somebody uses a Quicken form and it is invalid in a certain state, Quicken has a lesser interest in fixing that because they aren't responsible for the error since they were not the ones practicing law - and that is assuming Quicken ever finds out that it was their form that was invalidated in Case X in Podunk County District Court.

Untrue, you can get them under $3k go check out subguns.com. $600 also happens to be the price of 3 additional tax stamps.

OK, you buy it for $3k. What is that price going to be 10 years down the road if 922(o) isn't repealed? Enough for your formerly loving relatives to fight over? Enough to be spoils in a divorce? Enough for your incapacity trustee to kick you out of your own trust? I wouldn't ever put a machinegun in a form trust because the possibility that you'll have something valuable enough for lawyers to fight over starts to get very real - and at that point, a form trust done without any legal advice will provide plenty of opportunities to start that fight.

[raisitup]

Originally Posted by Bartholomew Roberts

Spending $600 is cheap insurance to make sure you don't lose an investment that is only going to increase in value as long as the 922(o) is around.

I think this is the winning argument. While $400-$600 isn't "nothing" it's reasonable insurance on what could be tens of thousands of dollars of goods.

Raisitup

[jmorris]

2. If I draft an NFA trust (hypothetical only, I don't do NFA trusts because I already have plenty of work), you can bet I am high on the list of people who hear about it if that trust is declared invalid. I've got an immediate interest (in the form of avoiding malpractice and ethics complaints) in correcting any additional problems before they make it to court.

Are you saying that if law changes that has an effect on trusts that you have formed in the past, you contact each and everyone you have done work for to correct the new (created) error?

[Bartholomew Roberts]

Are you saying that if law changes that has an effect on trusts that you have formed in the past, you contact each and everyone you have done work for to correct the new (created) error?

I think you are confusing two separate issues. One is if there is a court issue and a trust is found invalid. In this case, the law hasn't changed. The trust was never valid to begin with. At best, maybe the trust was in a grey area of the law that the ruling clarified. In that case, I would indeed contact every single client I'd done that work for and update the trusts because if I know that a trust I have drafted was declared invalid by a court and was never legal and I know I have a lot of other clients with that same trust, I would be risking my business as well as creating good grounds for a malpractice/ethics claim.

Quicken on the other hand doesn't have that problem.They make it very clear they aren't offering you legal advice and advise you to get an attorney. If one of their trusts is declared invalid, they don't have any risk - and in any case there is a better than average chance that it isn't the form that is the problem; but the way the person who filled it out tried to use it (because not being legal experts, they didn't know any better).

The second issue you mention above (the legislature invalidating trusts that were completely legal by changing the law) rarely happens because people get upset when the laws regarding property ownership are invalidated on a widespread basis. However, if it did happen, I'd probably send a letter out to all of my clients (even those I had not done trusts for) highlighting the change and encouraging them to update their trusts - because that generates more work for me (again hypothetical).

[jmorris]

At best, maybe the trust was in a grey area of the law that the ruling clarified. In that case, I would indeed contact every single client I'd done that work for and update the trusts

This would make the extra costs a lot easier to swallow. How do you know when the above occurs and how often does it happen.

[Bartholomew Roberts]

Assuming you mean "How often is a grey area of trust law clarified by a court decision?", the answer is probably somewhat often. Again, I don't do trust law so I couldn't speak intelligently to that. I do a lot of property related law and I subscribe to the state bar reporter for that. Even with property being a fairly settled area of law, there are still 3-8 cases highlighted every quarter because they shed new light on the court's interpretation of certain law or precedent.

However, the times where those changes were actually relevant to something I drafted or used in a legal matter is more rare. I can only think of one example in the last two years.

[Oldfalguy]

I also believe do it yourself NFA trust are fine if it works out for you-
Several trust have been kicked back by NFA branch because standard run of the mill trust have a tendency to allow the maker/grantee (you) also a beneficiary- That is a no-no with ATF Legal. They must also be Revocable or else you wouldn't be able to amend them as you purchase other NFA.
The grantee (you) can be a trustee.Thats it.
I also think these NFA trust can also be used to hold other property like standard trust can do making them more useful.
I have several Irrevocable trust I have set up over the years but they are for estate planning and protection in that I am the beneficiary and upon my tearful demise another beneficiary steps in to it. Funds continue to flow to her without a time period waiting for a Court to probate a portion for her to live on while heirs attempt to cause a problem. My wife would be the sole beneficiary of the NFA trust also until such time as a younger future heir can be appointed.
I would only do one if there was something I wanted and didn't want to bother with a CLEO- HE will sign it just takes them forever- He has done 7 for me. Using it to allow other trustees to use or possess the NFA items is not my intent.

[A/C Guy]

http://www.guntrustlawyer.com/form4.html

He has pfd's of completed forms for clarification and your convenience.

I used his forms in July and got my approved stamp last week.

[Skans]

Using it to allow other trustees to use or possess the NFA items is not my intent.

That's kind of unavoidable when you die, don't you think? What happens if you die and your wife is the Trustee and a Beneficiary - does that invalidate the trust per BATFE?

[Poodleshooter]

She wouldn't be the trustee,beneficiary AND grantor/settlor. Being all three is typically a problem for a trust in most states.
Being two of those, isn't always a problem.

The inheritance issues and how the NFA items pass to my wife and kids are why I went the lawyer route. I was fortunate to be able to find an attorney who is an NFA owner,and does these trusts routinely for a relatively low fee.

[threecharley]

easiest way is to find a local ffl who does his trusts like i did. he sent me a packet with the trust and all insrtuctions and the envelope preadressed. for 40 dollars.