Get in touch with Joe Hickson, hicksonj. I believe he charged me $750?
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MA NFA Trust Notice - Big Issues
- Thread starter hicksonj
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Apparently. Mine was for a Striker and it came back for a minor correction to be made. Literally 3 days after the certified return reciept came in the mail after the resubmission, the approved Form 4 arrived. About 3 1/2 months start to finish.
richc
NES Member
I am thinking about getting my green card. When you buy an NFA firearm through a trust is there anything different about the transaction, other than the firearm is owned by the trust?
I'm wondering about the pros and cons?
Thanks,
Rich
I'm wondering about the pros and cons?
Thanks,
Rich
Green card would only be needed if you want a machine gun. The transaction usually goes quicker since the trust doesn't need CLEO signoff, fingerprints or a background check like an individual would. The logic (not sure of the accuracy but it's what i've seen/been told) is that the FBI doesn't have to look at it since it's now a trust and this makes it a quicker process.
One pro is that if something happens to you the trust can keep the NFA items without $200/item transfer provided the individual can legally possess the items in the trust. This might mean that they need a green card and/or LTC.
One pro is that if something happens to you the trust can keep the NFA items without $200/item transfer provided the individual can legally possess the items in the trust. This might mean that they need a green card and/or LTC.
Pros, no CLEO signature, prints, background check, the trust owns the firearms not you, you write the trust into your will and spell out what will happen to the firearms in case something bad happens to you, animinity: "Do you own any MG's?, you: " No.".
Exactly.
Say you get sick or need to "go under the knife" and not all goes well. The trust owns the firearms and if your incapacitated then your trust owns them and in the trust and your will (You do have one, yes?) you have spelled out what can happen to them.
A trust may also, depending on how it is constructed, allow legal access to that item by more than one person. The one big suck-ness of individual NFA registrations is nobody can possess that item
without you being present, generally speaking.
For example if an MG is owned by a corporation, any of the officers of the corp can legally possess it, IIRC. (Obviously in MA all the officers would have to have green cards, but that's state level crap. )
A trust may be able to effectuate similar privileges if it is constructed correctly.
The bonus to this, is you could let someone borrow an NFA item if you and the borrower are both parties of the same legal entity. Obviously you will want to check with a lawyer to see how to
best pull this off.
-Mike
without you being present, generally speaking.
For example if an MG is owned by a corporation, any of the officers of the corp can legally possess it, IIRC. (Obviously in MA all the officers would have to have green cards, but that's state level crap. )
A trust may be able to effectuate similar privileges if it is constructed correctly.
The bonus to this, is you could let someone borrow an NFA item if you and the borrower are both parties of the same legal entity. Obviously you will want to check with a lawyer to see how to
best pull this off.
-Mike
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stacarter
NES Member
This is a question I had actually. I just bought an SBR KRISS Super V and am starting the paperwork to get it transferred to me via a Trust. I know I can add other people to the trust, my question is whether that trust can have different "property" in different states, possessed by different trustees. For example, I want to have myself, my wife, my brother and my brother-in-law as trustees in the trust. In MA, I can have Machine guns and SBR's, but no suppressors. In OR (where I am from and where my brother lives), he can have anything he wants (a suppressed, SBR MG as long as we get all the stamps). Can we build one trust to handle all of those different possiblities? I know that if we transferred something from MA to OR, we'd have to get ATF approval and we couldn't transfer something not legal in the ending state (no suppressors in MA for example). Or are Trusts state only entities that the feds treat on a state by state basis.
I know a lot of you are thinking "what is he thinking trusting that many people with his property" but our family is tight, the day I worry about this going badly is the day I decide I don't want to be on this earth any more. Not everyone has that kind of a relationship, but we do and we can do this without any danger for myself or my family.
Any opinions are appreciated and your time taken to read this is appreciated in advance as well.
Cheers
STAC
Yes. Contact Joe Hickson, hicksonj on NES,
Hickson Law Group, P.C.
51 Taylor Street
3rd Floor
Springfield, Massachusetts 01103
413.732.7708Phone:
413.375.9888FAX:
E-mail: [email protected]
stacarter
NES Member
Gotcha, great advice and I appreciate the reference guys. I'll update when I figure out what is possible. I think from other reading that Trusts are state by state so it wouldn't seem logical that trustees could be in other states and transfers between other states would be legal. But we'll see and I'll post back.
Thanks again.
Cheers
STAC
Thanks again.
Cheers
STAC
Ok... We have a tentative resolution here. First off... Sorry to everyone for going AWOL for quite a while with this issue. An attorney that has been instrumental in helping me get my firm off the ground was injured in late 2009, so I have been pinch-hitting for him and finding little time to even sleep.
I contacted the NFA today and discussed the current state of affairs. I don't know if this is a policy shift or the result of an internal/externally produced clarification, but trusts submitted by appropriately licensed individuals can be allowed. The key here is that all parties related to the trust, including the settlor, trustee, and beneficiary (and arguably the 2nd seat beneficiaries), MUST be appropriately licensed (provide copies of all licenses with each application). The 2nd seat beneficiaries should be licensed, since their remainder or contingent remainder (drawn from real property terms) interest could vest at any time, upon the death of the 1st seat beneficiary and make possession immediately illegal and incurable. Remember here, once an NFA item is transferred or otherwise possessed in violation of NFA law, that NFA item can no longer be legally possessed.
Just so everyone knows, the position that I have taken and advocated during this issue is as follows: Trusts create a relationship between a trustee and beneficiary. The trustee (notice here not the trust) maintains legal title to the trust property. Legal title refers to the duties and responsibilities of maintaining and controlling the property (cash, real estate, SBRs, etc.). The beneficiary(s) (notice here not the trust) maintains equitable title to the trust property. Equitable title refers to the benefits and enjoyment of that property. The words "trust property" consolidates this unique relationship, but is somewhat of a misnomer, since the trust holds no actual title to anything. To bolster this position further, when title to property is correctly transferred to or purchased by the trust, it is transferred to or purchased in the name of the trustee, as the trustee of the subject trust.
This illuminates another issue, which I call the "double hop." If Mr. O personally writes a check or charges (on his personal charge card) the purchase to acquire an NFA firearm and takes possession of the NFA item (after approval of all NFA forms), there was most likely two (yes 2: shop to O and O to O as trustee of the O NFA Trust) transfers involved in the transaction, and both were most likely illegal! Don't buy for the other guy (even if he is a trust)! To avoid this, O should have (1) opened a bank account, in the name of O as trustee for the O NFA Trust; (2) Gifted money to O as trustee for the O NFA Trust; and (3) write a check from said account to the seller party/dealer.
This may all make your head hurt, but the benefits of a trust can substantially outweigh the learning curve of the process and the extra steps to follow the law. As always, this detail has been posted to inform the community, but should never be solely relied upon to make decisions or commence a course of action. Involvement is NFA items is a wonderful and exciting venture, but should not be done so lightly, as severe Federal offenses, resulting in incarceration, confiscation, and substantial fines, can result from seemingly innocuous mistakes. Simply said, consult with your counsel!
I contacted the NFA today and discussed the current state of affairs. I don't know if this is a policy shift or the result of an internal/externally produced clarification, but trusts submitted by appropriately licensed individuals can be allowed. The key here is that all parties related to the trust, including the settlor, trustee, and beneficiary (and arguably the 2nd seat beneficiaries), MUST be appropriately licensed (provide copies of all licenses with each application). The 2nd seat beneficiaries should be licensed, since their remainder or contingent remainder (drawn from real property terms) interest could vest at any time, upon the death of the 1st seat beneficiary and make possession immediately illegal and incurable. Remember here, once an NFA item is transferred or otherwise possessed in violation of NFA law, that NFA item can no longer be legally possessed.
Just so everyone knows, the position that I have taken and advocated during this issue is as follows: Trusts create a relationship between a trustee and beneficiary. The trustee (notice here not the trust) maintains legal title to the trust property. Legal title refers to the duties and responsibilities of maintaining and controlling the property (cash, real estate, SBRs, etc.). The beneficiary(s) (notice here not the trust) maintains equitable title to the trust property. Equitable title refers to the benefits and enjoyment of that property. The words "trust property" consolidates this unique relationship, but is somewhat of a misnomer, since the trust holds no actual title to anything. To bolster this position further, when title to property is correctly transferred to or purchased by the trust, it is transferred to or purchased in the name of the trustee, as the trustee of the subject trust.
This illuminates another issue, which I call the "double hop." If Mr. O personally writes a check or charges (on his personal charge card) the purchase to acquire an NFA firearm and takes possession of the NFA item (after approval of all NFA forms), there was most likely two (yes 2: shop to O and O to O as trustee of the O NFA Trust) transfers involved in the transaction, and both were most likely illegal! Don't buy for the other guy (even if he is a trust)! To avoid this, O should have (1) opened a bank account, in the name of O as trustee for the O NFA Trust; (2) Gifted money to O as trustee for the O NFA Trust; and (3) write a check from said account to the seller party/dealer.
This may all make your head hurt, but the benefits of a trust can substantially outweigh the learning curve of the process and the extra steps to follow the law. As always, this detail has been posted to inform the community, but should never be solely relied upon to make decisions or commence a course of action. Involvement is NFA items is a wonderful and exciting venture, but should not be done so lightly, as severe Federal offenses, resulting in incarceration, confiscation, and substantial fines, can result from seemingly innocuous mistakes. Simply said, consult with your counsel!
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Hicksonj, thanks for updating us on this.
So what was the origin of the problem? Was it some thug at the MA state level that started all this crap, trying to convince BATFE that such transfers were "illegal?"
-Mike
So what was the origin of the problem? Was it some thug at the MA state level that started all this crap, trying to convince BATFE that such transfers were "illegal?"
-Mike
I don't know and would not want to blame anyone on either side of the fence. I do know that everyone I contacted both in MA and at NFA involved in this was great to work with, didn't just blow me off on the phone, and listened to my understanding of the topic. I hope these lines of communication are opened even more going forward.
How can the beneficiaries have any title to the trust property before the trustee has died?
Also, when I called CHSB about this issue a year ago, their position was - only the trustees of the tust needed to be licensed, because they were legaly the only ones to have access to the trust property, and when the beneficiery took ownership (at death of trustee) they would be granted a specific amount of time to get licensed to take possession.
Please correct me if I'm wrong and thanks for the info.
The trustee is bound to maintain and control the trust property. The beneficiary of the trust benefits from the trust property, as soon as the trust is created and funded with property/money (unless the trust blocks access for a period of time... Like a child reaching majority). They can be the same or different people. A great metaphor of this relationship is a bank. Your checking account is a lot like a trust, and the bank a lot like a trustee. The bank holds the money for your benefit, so you are the beneficiary of that relationship. Like a bank, the trustee of a NFA Trust (if the beneficiary and trustee are different people) should not be using the Trust firearms, unless this use constitutes maintenance or is approved by the beneficiary.
He is why this is important: You create an NFA Trust, where (1) you are the beneficiary, (2)you are the trustee, (3) your two sons are the 2nd seat beneficiaries (when you pass away, they becomes the beneficiary), and (4) you make me a backup trustee to guarantee that they don't fight over who gets the NFA items when you pass away. Everything is great, you enjoy the NFA firearms and maintain them. You know that when you pass, I am responsible as a backup trustee to maintain the trust property and fairly allow equal access to the trust property to each of your sons. You can also elect for me to sell the trust property and gift the proceeds to charity. You can also elect for me to sell the trust property and give your grandchildren the proceeds. There are infinite permutations with beneficiaries, but the bottom line is trustees serve the wishes of the settlor (person who created the trust) that are recorded in the trust and cannot benefit from the trust (unless some compensation is listed in the trust).
As for the CHSB position you described, it seems like there was a miscommunication, cause that is just blatantly wrong.
He is why this is important: You create an NFA Trust, where (1) you are the beneficiary, (2)you are the trustee, (3) your two sons are the 2nd seat beneficiaries (when you pass away, they becomes the beneficiary), and (4) you make me a backup trustee to guarantee that they don't fight over who gets the NFA items when you pass away. Everything is great, you enjoy the NFA firearms and maintain them. You know that when you pass, I am responsible as a backup trustee to maintain the trust property and fairly allow equal access to the trust property to each of your sons. You can also elect for me to sell the trust property and gift the proceeds to charity. You can also elect for me to sell the trust property and give your grandchildren the proceeds. There are infinite permutations with beneficiaries, but the bottom line is trustees serve the wishes of the settlor (person who created the trust) that are recorded in the trust and cannot benefit from the trust (unless some compensation is listed in the trust).
As for the CHSB position you described, it seems like there was a miscommunication, cause that is just blatantly wrong.
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This is just the way you interpret it, correct? The ATF does not consider me as trustee paying for and picking up an NFA weapon and transfering to the trust as "buy for the other guy," or an illegal transfer, or an additiona transfer (requiring a separate tax), correct? Is there any documentation of the "double hop," either by ATF letter or in the NFA manual? I ask because this seems to run counter to what people have been doing with trusts all along.
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I am not aware of any case law or binding rulings to this issue, but most attorneys that handle NFA Trusts suggest a Trust bank account as a best practice. You can't undo what has been done in the past. There are competing theories on this issue. First, you can look at the 3rd party purchase as a constructive gift of funds to the trust. Second, you can look at the 3rd party purchase as an actual gift of the NFA item to the trust. This second interpretation would require 2 sets of NFA forms (XYZ Dealer --> You and then You --> You as trustee of NFA Trust) to be legal. Err on the side of caution.
I think what he is talking about is basically just laying down a bed of TP on the rim of the legal toilet, so to speak. EG- if you have a trust, and do everything right, if your trust ever comes under legal scrutiny for whatever reason, it would be very difficult to declare the trust's ownership of that firearm to be invalid in any way. IMO it's probably statistically unlikely that it would ever get "tested", especially if all you do is keep the NFA device and you have a stamp/approved paperwork for it, and have no intention of selling it to anyone else.
At a minimum, you don't want to be making legal procedural mistakes with your trust that could be easily seen externally by people that have greater legal intellect than the typical numbskull examiners at the NFA branch.![[laugh]](/xen/styles/default/xenforo/smilies.vb/012.gif "Laugh [laugh]")
-Mike
At a minimum, you don't want to be making legal procedural mistakes with your trust that could be easily seen externally by people that have greater legal intellect than the typical numbskull examiners at the NFA branch.
-Mike
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I prefer to interpret it this way. Lawyers will outlive the cockroaches...
Actually, Joe's been good about laying out the "logic" and "thought process" behind this whole thing and it's been fascinating to see that unfold in this thread.
Why would they need to be the same person? Normally the trustee is in control of the trust and the property in the trust so the beneficiary is only in control if the trustee is incapacitated or otherwise unable to make decisions for the trust.
dcmdon
NES Member
I believe the Settlor is in charge as long as he is still alive or maintains control fo the (revocable) trust.
While we're all playing amateur attorneys here, this is a perfect example of why its worthwhile to have your trust drawn up by an atty.
While we're all playing amateur attorneys here, this is a perfect example of why its worthwhile to have your trust drawn up by an atty.
Wow way to dig up an old dead thread. Since you didn't quote a specific post it's hard to determine who you are speaking to with your amateur attorney comment but I can assure you that hicksonj is not an amateur.
dcmdon
NES Member
holy crap. I didn't realize it was so old. hmm.
My amateur atty comment was directed at the first page of posts. I didn't dig through 6 pgs. Glad to see a real atty commented.
My point still stands. If you want to do a trust for anything more than an SBR'd AR or two, get a real trust done by a real attorney.
My amateur atty comment was directed at the first page of posts. I didn't dig through 6 pgs. Glad to see a real atty commented.
My point still stands. If you want to do a trust for anything more than an SBR'd AR or two, get a real trust done by a real attorney.
dcmdon
NES Member
Well you could do a corp instead of a trust. But its existence is not private and there are annual carrying costs.
You're just a little late to the party. This was all fixed several years ago. Back to normal after Joe untangled the extension cord mess between the states and the feds. It's a closed issue. For those that don't get it, read Post #42. If you still don't get it, read it again until you do.
-Mike
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