Go Back   Maryland Shooters > The Arsenal > NFA/Class 3/Title II

Reply
 
Thread Tools Display Modes
Old January 13th, 2009, 08:12 PM   #41
frozencesium
BBQ Czar
 
frozencesium's Avatar
 
Join Date: Feb 2008
Location: MD
Posts: 1,797
Images: 2
Quote:
Originally Posted by dmgwork View Post
Assuming that you have created a valid trust, it will probably be OK. Its hard to tell without reviewing the document and what your personal circumstances are. Some of the areas that you should look at are:
1) does the successor trustee have the ability to determine if the transfer to the beneficiaries is a good idea - can they dispose of the assets.
yes
Quote:
Originally Posted by dmgwork View Post
2) can you trust be modified to change the grantors or settlors at a later time to avoid a transfer if they are not permitted in the future.
yes
Quote:
Originally Posted by dmgwork View Post
3) were the items purchased correctly - most people using form trust purchase as an individual and then transfer to the trust, but the Form 4 only gives permission for the dealer to transfer to the trust. This creates 2 violations of the NFA.
nothing has been purchased yet as either an individual or by the trust, so all purchases in the future would be by the trust
Quote:
Originally Posted by dmgwork View Post
4) does the trustee have the ability to purchase firearms and use them even though it will create potential liability to the beneficiaries ( can your beneficiary sue the successor trustee for using the items if they are devalued because of the use)
I'll have to check and perhaps update this (I haven't created the trust yet, just started writing it out)
Quote:
Originally Posted by dmgwork View Post
5) can the trustee or successor trustee avoid a transfer of other NFA restricted items if the transfer is not completed correctly or must they accept them as almost all other trusts mandate.
see above
Quote:
Originally Posted by dmgwork View Post
6) can the successor trustee wait to distribute the items if the beneficiary is not ready for them(maturity wise) or if the are located in a state where they are illegal (would the trustee be able to tell if they were illegal in that state) or must they distribute them upon the ending of the trust or when the beneficiary reaches a certain age.
yes, there are custodians set up for those under 21 until they reach 21 and any transfer must be to someone who is both over 21 and legally able to possess both firearms and NFA firearms in their current place of residence. If one of the beneficiaries is not able to posses NFA weapons, then the property is to be divided equally (as determined by appraised monetary value) between those who can.
Quote:
Originally Posted by dmgwork View Post
Quicken trusts end 120 hours after the death of the grantor and become irrevocable upon the death of the first beneficiary. This can cause major problems and does not allow the trustee time to transfer them. This results in the successor trustee being in possession of a NFA item that they do not have the permission to be in possession of. Only the trustee had permission and upon the ending of the trust there is no "trustee"
Again, I'll look at the document and verify and/or change this
Quote:
Originally Posted by dmgwork View Post
There are many other issues that a normal trust does not deal with that are unique to firearms and NFA ownership, possession, and transfer. If you would like me to review your trust, I would be happy to do so.
I'm sure you would, but right now I'm a bit wary of lawyers in general and certainly of ones offering services that they charge an arm and a leg for....no offense meant. PM me with your rates to review/modify and we'll see. I'm also considering going the corporation route, while more expensive, seems to be a bit more on solid legal ground.


__________________
"You see officer...there was this tragic boating accident..."

"The more artificial taboos and restrictions there are in the world, the more the people are impoverished...The more that laws and regulations are given prominence, the more thieves and robbers there will be." -Lao Tzu
frozencesium is offline   Reply With Quote
Old January 13th, 2009, 10:25 PM   #42
dmgwork
Junior Member
 
Join Date: Jan 2009
Posts: 9
in regards to #6, the problem is really not what you address, but what if the beneficiaries are living in a state where they can possess, and legally able to own, and over the age of 21 (even 40, 60, or 80) but the type of person who should never have a firearm, A quicken trust will not allow the Successor trustee(s) (who is/are unknown at this time because you do not know who will survive you) to make the decision that it would not be a good idea to give the items to them.
dmgwork is offline   Reply With Quote
Old January 17th, 2009, 10:24 AM   #43
Maryland_Shooter
Banned
 
Join Date: Feb 2008
Location: Glen Arm
Posts: 888
Quote:
Originally Posted by dmgwork View Post
In many states there are significant problems with the trusts quicken creates. An approved Form 4 does not mean your trust is valid. If the trust is not valid, you do not have permission to be in possession of the Title II firearm. In addition there are many problems that Quicken and other trust cannot begin to address in regards to the ownership, transfer, and possession of NFA restricted firearms. Many people consider protecting their family and friends in connection with the decision to purchase NFA firearms. A Quicken or standard form trust only deals with the ability to acquire them, and even this is typically a violation of the your duties as a trustee. That being said, if you are the creator and the only trustee, you are the only one who can complain about that while you are alive.

A Trust for NFA purchases should teach an unknown successor trustee how to transfer and deal with the items properly. In addition, it should allow for a trustee to use the items without worrying about creating liability for the beneficiaries. Further it should deal with the possibility that your beneficiary is not the type of person who should have access to the firearms. if you want to read about some of the issues or problems you might checkout a website on Gun Trusts.

In addition, I would be happy to address any legal questions on the NFA and what you can and cannot do.

David Goldman, Estate Planning Lawyer and Author of http://www.guntrustlawyer.com/

Your article says "advise" when it should say "advice" Dave.

I recently receive a copy of Quicken Willmaker 2009. I have previously written about many articles about the unintended results that occur with Do It yourself and Free Estate Planning Documents created by individuals without the advise of council and the problems with online document preparation services like LegalZoom and RocketLawyer.
Maryland_Shooter is offline   Reply With Quote
Old January 17th, 2009, 12:32 PM   #44
dmgwork
Junior Member
 
Join Date: Jan 2009
Posts: 9
Typo

Thanks Maryland_Shooter- its corrected below. I will also check the wet

I recently receive a copy of Quicken Willmaker 2009. I have previously written about many articles about the unintended results that occur with Do It yourself and Free Estate Planning Documents created by individuals without the advise of council and the problems with online document preparation services like LegalZoom and RocketLawyer.
dmgwork is offline   Reply With Quote
Old April 5th, 2009, 01:32 AM   #45
precision40
Junior Member
 
Join Date: Apr 2009
Posts: 3
I just got a copy of Quicken Willmaker 2009 today and was playing around with it. I'm just curious when it comes to determining what items are to be placed in trust, specifically, firearms. When it comes to firearms, do you just say "All Firearms belonging to Mr. Joe Public?" along with everything else that you want in trust?

What else needs to be tweaked in WM2009 to make it all spiffy? Anything NOT to state in the trust?
precision40 is offline   Reply With Quote
Old April 5th, 2009, 10:10 AM   #46
dmgwork
Junior Member
 
Join Date: Jan 2009
Posts: 9
Quicken

Your question really depends on whether you are just trying to acquire a Title II firearm or are thinking of how to protect yourself, your family and your friends from Violations of the NFA.

As to your question about what items to transfer, you have to look at what you want to happen to the other items and if it is legal to do an assignment of firearms in your state. Each firearm should be specifically identified so that a proper inventory can be done when needed.

Most people do not want the ATF to have a record of all of their firearms so the Attachment A schedule used with Quicken is not really appropriate because everything is listed on it. You might consider using an assignment page where you only list the assets you are purchasing on that particular Form 4 or Form 1. This would comply with the check list requirement for the assignment / attachment a that the ATF has as well as provide privacy for you and your firearms.

I have addressed many issues dealing with the use of Quicken 2009 to create trusts in an article
Using Quicken to prepare a trust: The good, the bad, and ugly!

This would be a good place to start when thinking of changes or problems with using Quicken 2009

Hope this helps,
David Goldman, http://www.GunTrustLawyer.com/
dmgwork is offline   Reply With Quote
Old April 5th, 2009, 03:18 PM   #47
precision40
Junior Member
 
Join Date: Apr 2009
Posts: 3
Hey David,

Thanks for the reply. I have read (and am not sure of it's legalities) that alot of people use a "master" schedule A listing ALL their properties placed in trust and only submit a Schedule A listing the item being registered to the NFA, not the entire list.

On the Master Schedule A, they add the disclamer "Any and all Title 2, Class 3 Firearms enclosed in the attached schedule A's" So when they submit a schedule A to the NFA, the NFA only sees the item being registered, not the entire list. Once it comes back approved, the person then adds it to the Trust, see what I'm saying? If he has 10 NFA items approved through a Trust, then he has the Master Schedule A plus 10 additional Schedule A's attached to the trust. Legal or No?

I am in non way using a Trust to circumvent any NFA regulations. Quite frankly, my CLEO is a great guy and has always happily signed off on any Form 1 or 4 I've brought him. I'm thinking of creating a trust for my property AS WELL AS a way of simplifying Class 3 purchases.

The WM2009 seems like a decent program, but I'd like to make it totally legit so nobody (including myself) gets into hot water. Thanks again and take care.
precision40 is offline   Reply With Quote
Old April 5th, 2009, 04:24 PM   #48
dmgwork
Junior Member
 
Join Date: Jan 2009
Posts: 9
Quicken 2009 and transferring assets

I think a better solution might be to list the title II firearms you are purchasing, and then transfer the rest after you submit the paperwork to the ATF. That way you are not misleading or being inaccurate on the tax forms.

The problem is the next time you want to purchase some title II firearms, with quicken you should be sending them the complete Schedule A which would include all of the Title I and Title II firearms. I guess you have 2 trusts 1 for NFA items and 1 for non NFA items. I think its wrong and misleading to intentionally give the ATF / IRS a false statement of the assets and mislead them as to what documents are being submitted.

The problem is that you are suppose to submit a complete copy of the trust and the amendments and attachments for approval. This is one of the reasons why you are no longer able to submit a certificate of trust and must submit the full trust for review.

Remember that ATF does not have lawyers reviewing your trust for validity, only comparing it against a checklist. Just because the ATF approves your form 1/4 transfer does not mean that the transfer will be legal. It is your responsibility to make sure your trust is valid.

This is why our trust is fundamentally different, we have an assignment page for the transfer and do not have a total list of the assets as part of the trust documentation. Our NFA trust allows for compliance with the ATF without misleading them and protecting the privacy of our clients.

David Goldman
http://www.guntrustlawyer.com

Two additional issues to consider?

First - How do you propose to deal with the issue that your trust will terminate 120 hours after you die? Do you realized that while the ATF makes exceptions on possession and transfer within a reasonable time of death for a personal representative of an estate, there is no such exception for a business entity or trust. With a quicken trust, it is impossible to legally transfer the assets within 5 days of death so under the NFA they are illegal weapons and once illegal can not be made legal again. If 120 hours is not enough, how long should it be? This depends on the legalities of each state and there is no generic answer for this. Unfortunately Quicken deals with trusts in a generic nature and gives the same provision for everyone.

Second issue: Most people using Quicken or legal zoom or even generic trusts purchase the items as individuals and transfer them into the trust. Have you considered that this course of action, although used by many, is in fact 2 violations of the NFA? You are only receiving permission to transfer the item from the dealer to the trust, not from the dealer to you, nor from you to the trust. There is a simple solution - have the trust purchase the items.
dmgwork is offline   Reply With Quote
Old April 5th, 2009, 09:14 PM   #49
precision40
Junior Member
 
Join Date: Apr 2009
Posts: 3
Quote:
Originally Posted by dmgwork View Post
First - How do you propose to deal with the issue that your trust will terminate 120 hours after you die? Do you realized that while the ATF makes exceptions on possession and transfer within a reasonable time of death for a personal representative of an estate, there is no such exception for a business entity or trust. With a quicken trust, it is impossible to legally transfer the assets within 5 days of death so under the NFA they are illegal weapons and once illegal can not be made legal again. If 120 hours is not enough, how long should it be? I will attempt to contact my state AG and see what they have to say about transfering Class 3's upon the Grantors death. I would "assume" you could change the wording from 120 hours to say....365 days? to allow for NFA paperwork to be submitted and approved.

Second issue: Most people using Quicken or legal zoom or even generic trusts purchase the items as individuals and transfer them into the trust. Have you considered that this course of action, although used by many, is in fact 2 violations of the NFA? You are only receiving permission to transfer the item from the dealer to the trust, not from the dealer to you, nor from you to the trust. There is a simple solution - have the trust purchase the items. On another $200 Tax Stamp?
The complexities.....
precision40 is offline   Reply With Quote
Old April 5th, 2009, 09:15 PM   #50
Kharn
Senior Member
 
Join Date: Mar 2008
Location: Hazzard County
Posts: 1,841
Quote:
Originally Posted by precision40 View Post
When it comes to firearms, do you just say "All Firearms belonging to Mr. Joe Public?" along with everything else that you want in trust?
Not a valid statement as you and your trust are two seperate entities. A trust is not just a big safety net you can just toss stuff into with such blanket statements.
Kharn is offline   Reply With Quote
Old April 6th, 2009, 01:04 AM   #51
dmgwork
Junior Member
 
Join Date: Jan 2009
Posts: 9
If the trust purchases the items there is no additional tax stamp needed. You should fill out the form 4 http://www.guntrustlawyer.com/form4.html in the name of the trust.

As far as using 365 days, while it is a solution and would be valid in most states it creates additional issues. Once the Grantor dies, the trust becomes irrevocable and as such needs to be recorded with the state, and tax returns are necessary for each year. typically a term of 365 days while it will allow for time to transfer items will create the need to file 2 tax returns.

While these are only 2 of the more than 50 issues that are problematic with Quicken and it would be possible to fix all of them, my point is that a Quicken trust may be fine for a bank account or couch but not for firearms.

David Goldman
dmgwork is offline   Reply With Quote
Reply

  Home Page > Forum List > The Arsenal > NFA/Class 3/Title II


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -5. The time now is 03:28 AM.


Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
2013, Maryland Shooters, LLC