Gifting from Family member - Best route

[Caveman]

Good afternoon. I did a fair amount of searching but I couldn't narrow down an answer or direction for this inquiry. I'm hoping someone here may know or be able to point me in a direction. Honestly not sure if this is even the best sub-forum for this question.

The issue is this. My father wants to pass his firearms collection down to me before he passes so that it's all in my name. We are both licensed in MA. It is a number of firearms(over 4) so doing ftf transactions is out of the question. I'm reluctant to go through a FFL due to older grandfathered items not being on the current version MA "approved" roster. Is there a mechanism in place for this scenario? What is the best way to implement a bulk "gift" transfer without going through a FFL.

I'm really not sure where to start with this. An Estate Lawyer? a Trust? any help or advice would be most appreciated.

Caveman

 

[Len-2A Training]

Simplest and easiest way is for him to write up a Notarized document stating that all the guns/ammo/etc. goes to you upon his passing. Have him store the Notarized copy with his Will. And he can just give you the guns to borrow for now (noted in the document) and when he passes they are yours and you'll just do eFA-10s under REGISTRATION (ignore the "where did it come from section"). Do NOT use the Inheritance option!!

Any licensed person can "hold" someone else's guns for an indefinite time, so ownership does not pass until he passes, but you are merely holding them for him.

So simple even a caveman can do it! <sorry I couldn't let the opportunity pass>

 

[Caveman]

Thanks for the quick reply Len, that's why I love this SN.

We discussed that as a possibility. I think his worry is anything that's in his name at the time of his passing would be valued against his "estate" and taxed accordingly. He doesn't want The Man to get a cut if at all possible. So he was hoping to pass it down to me and get it out of his name well enough in advance and I would "lend" him a couple back to use.

 

[LuvDog]

Would this be a good use of a trust?


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[Caveman]

Would this be a good use of a trust?


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I was unsure on if the items had to go through a FFL to transfer into the trust etc etc. thus hitting the no FFL hurdle.

 

[CrackPot]

INAFP (not a financial planner)

In MA the first $1M is tax free.

Federal the first $5.4M is tax free.

You have to decide if MA tax kicks in and matters. Top marginal rate in MA is 16% for estates but that is at $10.4M of taxable.

Thanks for the quick reply Len, that's why I love this SN.

We discussed that as a possibility. I think his worry is anything that's in his name at the time of his passing would be valued against his "estate" and taxed accordingly. He doesn't want The Man to get a cut if at all possible. So he was hoping to pass it down to me and get it out of his name well enough in advance and I would "lend" him a couple back to use.

 

[Len-2A Training]

Thanks for the quick reply Len, that's why I love this SN.

We discussed that as a possibility. I think his worry is anything that's in his name at the time of his passing would be valued against his "estate" and taxed accordingly. He doesn't want The Man to get a cut if at all possible. So he was hoping to pass it down to me and get it out of his name well enough in advance and I would "lend" him a couple back to use.

That's why the Notarized document and NOT including it in the Will. Only the Will gets probated in court. This was a recommendation made to me by a student in one of my MA Gun Law Seminars, as she had a friend get burnt by including it in the Will . . . the judge insisted on an independent appraisal of all the guns/etc. ($$$) and it kicked the estate over the $1M mark which in MA makes it 16% estate tax from the FIRST DOLLAR (NO EXEMPTION), so minimum $160K tax bill.

- - - Updated - - -

INAFP (not a financial planner)

In MA the first $1M is tax free.

Federal the first $5.4M is tax free.

You have to decide if MA tax kicks in and matters. Top marginal rate in MA is 16% for estates but that is at $10.4M of taxable.

That is NOT what a retired financial planner (also one of my past students) told me, he said 16% from dollar-one! And he's got his house up for sale to bail out of MA for that exact reason (he already owns property in FL).

 

[Caveman]

This is was able to find on the state .gov site. http://www.mass.gov/dor/all-taxes/income/estate-tax/ it mentions the 1mil cut off. So def curious how it would all work out. Maybe it depends on the judge if they are having a bad day whether they want to actually adhere to this.

 

[Glockster30]

There is a $1M exclusion before any estate taxes are paid.

The estate tax is a transfer tax on the value of the decedent's estate before distribution to any beneficiary.
For dates of death occurring on or after January 1, 2003, the Massachusetts estate tax is "decoupled" from the federal estate tax system. For these dates of death, the Massachusetts estate tax is imposed on estates using the Internal Revenue Code in effect on December 31, 2000. For estates of decedents dying after 2002, the applicable exclusion amount was $700,000 in 2003 and increased to $1,000,000 in 2006. Future changes to the federal estate tax law will have no impact on the computation of the Massachusetts estate tax.

http://www.mass.gov/dor/individuals.../estate-tax-information/estate-tax-guide.html

 

[MisterHappy]

Perhaps the donor can do the notarized document, and pass off 4 per year FTF (Makes it easy to think of an Xmas/birthday gift), until he's no longer around - then, the letter of gift (or whatever the technical term would be) will become active. This way, non-compliant stuff could be transferred, w/o FFL involvement, and the estate "shrunk."

Obviously, the OP would have them in his custody, on loan until then.

 

[chopper_man]

How many you talking? He can efa-10 you 4 of them per year. You can then talk with your regular FFL and see if they will do a discounted transfer for you, offer to go in an our before or after he opens as to not interfere with his regular business.

 

[Glockster30]

Perhaps the donor can do the notarized document, and pass off 4 per year FTF (Makes it easy to think of an Xmas/birthday gift), until he's no longer around - then, the letter of gift (or whatever the technical term would be) will become active. This way, non-compliant stuff could be transferred, w/o FFL involvement, and the estate "shrunk."

Obviously, the OP would have them in his custody, on loan until then.

I was thinking along a similar line as this too. Caveman's father can start his 4 yearly eFA-10 transfers now to his son, in addition to doing what Len suggested. As noted, there is no MA estate tax for Caveman if his father's estate is worth less than $1M dollars.

 

[TayNinh_66]

Agree with others that if anything IS on the list then transfer 4 per year or if his health is declining go thru FFL.
Are there any siblings who are going to bitch if you get the firearm collection?
If estate is over a mil then transfer house to you via deed and he can keep lifetime estate.
Transfer all assets to your name only such as bank accounts, cars, again assumes he is elderly and no siblings.
At a minimum make sure everything is joint.
If siblings, then create a trust.
Goal is to keep everything out of probate.

If you speak with atty make sure it is experienced estate atty and not a generalist.

 

[TayNinh_66]

That's why the Notarized document and NOT including it in the Will. Only the Will gets probated in court. This was a recommendation made to me by a student in one of my MA Gun Law Seminars, as she had a friend get burnt by including it in the Will . . . the judge insisted on an independent appraisal of all the guns/etc. ($$$) and it kicked the estate over the $1M mark which in MA makes it 16% estate tax from the FIRST DOLLAR (NO EXEMPTION), so minimum $160K tax bill.

Just finished complicated will and trust docs. Specifically asked atty if separate notarized letter was required to give firearms to my son. "On no, just put it on a separate schedule and we'll reference the schedule in the will. That way you'll be able to change it anytime you want without changing the will."

Will was a freebie so I shouldn't complain.

 

[teaser452]

That's why the Notarized document and NOT including it in the Will. Only the Will gets probated in court. This was a recommendation made to me by a student in one of my MA Gun Law Seminars, as she had a friend get burnt by including it in the Will . . . the judge insisted on an independent appraisal of all the guns/etc. ($$$) and it kicked the estate over the $1M mark which in MA makes it 16% estate tax from the FIRST DOLLAR (NO EXEMPTION), so minimum $160K tax bill.

- - - Updated - - -



That is NOT what a retired financial planner (also one of my past students) told me, he said 16% from dollar-one! And he's got his house up for sale to bail out of MA for that exact reason (he already owns property in FL).

Ianal.

 

[teaser452]

Ianal.

And always dangerous disputing Lens. BUT, yes, only the will gets probated, meaning the will directs to whom the assets of estate will go. 50% to x and 40% to y and 10% to my no good daughter, for example.

Anything not in the will is distributed according to a formula in estate law that the judge has to follow. This I think is similar to dying without a will, the term being intestate.

(And what the lawyer told you may not have been wrong. For example, if the will said "I want my goldfish collection, my belly button lint collection and my firearm collection divided equally between my three sons" then yeah, the judge is going to order an apparaisal on all of it. If the will just said "my number one son gets all my guns because his siblings can't shoot for shit" no apparaisal would be needed or order (unless the estate was close to or over the 1 million mark)

Just because you don't list your gun collection in your will does not mean it isn't included in the estate value. The executor or executrix is responsible for accurately tallying the value of all possessions. There are huge liability issues for the executor/executrix if this is not done properly or accurately. Examples of this could be not disclosing the firearms. Not disclosing the pile of gold coins in the safe or not disclosing the pile of cash under the mattress. (Remember, the deceased may have told other people about his secret stashes)

Liability from relatives of the deceased who are entitled to a share of it (whoa to the executor who doesn't disclose something that was known to one of the entitled). But also liability from the tax man, both the IRS if over the limit or more often from the MA taxman. I know several people who have attempted to defraud the state out of the estate tax and defraud relatives that were entitled. It did not go well for them.

Botton line is, just because you don't list it in your will, doesn't mean it won't count towards the estate tax. Just start the 4 times a year gift process. Maybe use an ffl for the more common firearms in the collection?

ETA: OP, is your mom still alive and married to your dad? If he dies, without specifying you get the firearms, she gets them.

If she has passed or passes before him, do you have any brothers and sisters? And would they be upset that you got the whole
collection and that they didn't receive equal value from the estate?

The reason I ask is because I have seen even the nicest most close knit families come apart at the seams when money comes up. And a sizable collection of firearms can mean big money.

This is as much a legal
issue as it may be a interpersonal issue with you and your siblings, if any.

Just a lot of things to think about here.

Double post typing on a tiny iPhone.

 

[Len-2A Training]

teaser452 brings up valid points, best to distribute at 4 or more/year now to avoid family problems later.

 

[noxin]

If you have any firearms that can be transferred through an FFL, I would get those done now. Most FFLs will cut you a deal on up to five firearms at once. Remember, most of the restrictions are on Pistols, so it shouldn't be too bad.

The remainder, I would do FTF 4/year like everyone else mentioned.

 

[Caveman]

Awesome, Thanks for everybody's replies.

I'll start the 4 per year on the particular items and talk to a few FFL's for deals on transferring the rest it's 50-60 items so hopefully I can work something out and comp the FFL for all the paperwork and time. I really appreciate all the help figuring this out.

Luckily my mother is out of the picture in regards to his assets. They divorced over 30 years ago. My sister will get her cut with all the non firearm items cash and other assets she can keep or sell if she so chooses. I'm just getting the firearm related items.

It really is amazing how people turn on each other when the bill or the payout comes through. I've seen it myself.

Caveman