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Taking the Trust route to the NFA...

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  • Taking the Trust route to the NFA...

    This is in response to FormerNOPD's request for more information on the Trust route to the NFA. Enjoy!

    Have you ever looked at pictures online of sound suppressors, machineguns, short-barreled rifles/shotguns, grenade launchers, or other weapons and wondered..."how'd they GET those great toys!?"

    Most know that they aren't outright illegal, but the barrier to entry into what is commonly referred to as the "Class 3 World," is prohibitive. But knowledge is power, and so I want to give each of you the power to break into the fun-filled world of the NFA!

    First off, let's briefly discuss what you can and can't hope to buy through the NFA process.

    Registration categories in the NFA:

    1- SBR: Short-Barreled Rifles (barrels <16", overall length <26")
    2- SBS: Short-Barreled Shotguns (barrels <18", overall length <28")
    3- Machineguns
    4- Sound suppressors
    5- DD: Destructive Devices (grenade launchers, grenades, etc...)
    6- AOW: All Other Weapons (anything not a handgun, rifle or shotgun)

    While you can purchase current production SBRs, SBSs, AOWs, DDs, and suppressors, the 1986 GCA banned all further registration of machineguns. This locked the books on machineguns, and only allows the further transfer of machineguns, but not the manufacture. This has had the economic result of pushing the price of machineguns to ridiculous prices, out of reach for the vast majority of folks (M16s go for >$12k.)

    So, if this sounds like something that you would be interested in, read on.

    Individual Method

    You can have an NFA firearm (all categories are considered firearms, even suppressors) by simply filling out the Form 4 (application to transfer), and send it in with a $200 check, a set of passport photos, and a set of fingerprints. The processing usually takes anywhere from one month, to 6 months, depending.

    However, a lot of people do not have access to this route, because one of the steps of filling out the Form 4 is to get your Chief Law Enforcement Officer of your jurisdiction to sign off that he knows of no reason why you should not be approved for the transfer. When I was on the job, MY OWN CHIEF would not sign my paperwork. Humph!

    Well, enter the TRUST.

    Trust Process

    If you have a trust, the trust can be approved to own an NFA firearm. You would simply be the trustee, authorized to possess the items. The trust route is slightly different than the Individual route. For starters, no need for the fingerprints, as a paper entity does not have any. Ditto with the passport photos. When you send in your paperwork, you will need to include a copy (COPY, not original) of the Declaration of Trust. With very little background checking to do (none?), the paperwork is usually approved quicker than individual transfers.

    Now, how do you GET a trust? I'm glad you asked...

    First off, a trust is an entity, not a corporation. There is no ongoing paperwork that must be filed to maintain a trust. There is no filing fee for a trust. There are no obligations whatsoever once the trust is formed. It exists, and that's enough. It has legal implications over the assets of the trust, as ownership is no longer in YOUR name, but in the trust.

    Now that we know a little about what a trust is, here's what you'll need to do if you want to form one. While an attorney can draft up a perfectly suited trust, that may be unnecessary if all you are wanting is a legal method for transferring NFA firearms into your possession. If you wanted something MORE out of a trust, you should consult an attorney.

    If you have determined you do not need professional legal advice, you WILL need some help. Socrates and Quicken both make software packages suited to estate planning, and include templates for wills and trusts.

    Socrates Estate Planner:



    Quicken Willmaker 2009:



    With the software in hand, you should go through the various templates and pick the one for you. There are married, single, irrevocable, revocable, and other types included. You will want the single revocable living trust, unless you are either married and want your spouse included in the process. This is not necessary.

    First, you will need to pick a name for your trust. This will need to be engraved on any firearm you MANUFACTURE, but not those you have transferred to you. When you "make" a short-barreled rifle by slapping a 10" upper on a lower receiver, you have MANUFACTURED an SBR. So, you MAY not want to use your name. I chose "Wise Firearm Trust."

    Where the software leaves a blank, fill it in appropriately.

    Let's look at some legal vocabulary:

    The Grantor is you.
    The Trustee is you.

    It looks awkward, but YOU are assigning all ownership rights of the included property to YOU, to take care of them for YOUR interests. It's a bit redundant, I know.

    You can also assign joint Trustees, which could be your brothers, wife, dad, or friend. Keep in mind, this joint Trustee will have complete possessory rights of the items, and could exert this legal authority if provoked. Be careful!

    You can also name beneficiaries of the assets, in the event of your death. In this way, the Trust acts like a will. But instead of passing the assets from YOU to your beneficiary, it passes from your TRUST to your beneficiary, OR to another named SUCCESSOR TRUSTEE to possess the assets until the beneficiary is old enough. (A lot of wills have trust provisions that do the same thing.)

    Here is what the front of my Declaration of Trust looks like:



    Once you have trust documents filled out properly, you will need to have it signed by a notary, and witnessed. I have blocked out most of the information on this page, but perhaps it might still be useful to see:



    You will also have to fill out a Table of Assets. This will include every NFA firearm you transfer to the trust. It is a simple spreadsheet with the item description. I have three NFA firearms. A SBR and two suppressors. This is my table of assets:



    The transferred (titled) assets do not need any further documentation, but you will need to document any transferring of non-titled assets into the trust. This comes up when you want to SBR an AR lower. You will first need to transfer the lower into the trust, via an Assignment of Property. You just fill out a simple form, include the description and serial number, then have someone witness your signature authorizing the assignment of the property.

    It looks like this:



    So, now you have a trust. WOOHOO! Make a copy of the Declaration of Trust pages. Then go put the original in your safe.

    Now you are ready to start filling out those Form 4's (transfers) and Form 1's (application to manufacture.)

    I hope this has inspired at least one of you to take the plunge into the World of NFA!
    Last edited by jwise; 12-10-2008, 04:06 PM.
    J. Wise

    AR-15 - AK-47 - NFA Trusts - My Pick - Carry Guns - 1911s

    "Some say you can tell how the world stands by the prices of AK-47s...." Chit2001

    Any comments contained herein regarding the legality of firearms, or the application of law, are strictly applicable to Texas. If you live in CA, NY, IL, MA, D.C., etc., the above comments will probably shock you, and should be read for educational purposes only. Most likely nothing I write will apply to you.

    sigpic

  • #2
    Now that you have a trust, let's look at those pesky forms.

    Form 1

    For my SBR, I had to fill out a Form 1. Remember, that's the application to manufacture a NFA firearm. This form is used to manufacture an SBR, SBS, DD, AOW, or machinegun. It's no longer used to register machineguns, since that has been banned, but it was the form that WAS used 20+ years ago.

    Engraving

    Before submitting the form, you should take your receiver that you are registering and have it engraved. You will need to engrave it with the name of your trust, and the city/state. It will need to be in a conspicuous location, easily viewable. You can't hide it under the grip! The most common place to put the engraving is on the receiver (for an AR), or the barrel (for a shotgun, etc...) Since the AR is modular, the receiver makes the most sense, so you can still take advantage of its modularity without compromising the legality of the firearm.

    Here you can plainly see the HACK job my local engraver did on the side of my lower. I would recommend you plan ahead, and send you lower off to a PROFESSIONAL who can do a much better job than the guy who did mine...



    There has been some disagreement in the NFA world as to engraving. Some have interpreted this to be only the ORIGINAL manufacturer, not the NFA manufacturer. Notice how the receiver of a Colt LE6920 is already engraved with "Colt, Hartford, CT." Some say THAT suffices, and THAT is what you should write down in the box labeled Addiitonal Description. I disagree, and I think I have the majority opinion on my side (as well as the "safe" side.)

    After you have completed the Form 1, and have sent it off with your check/money order/cashier's check for $200, and a COPY of your Declaration of Trust, you will have some time to wait.

    One day, you will receive a plain envelope in the mail. It will be from the ATF, and will have your stamped/approved Form 1 enclosed.

    Here's what a Form 1 looks like. I have blotted out the sensitive parts, like my full name, address, phone number and the like. I also deleted the serial number of my rifle.



    Notice the STAMP on the top right hand corner. If you can read it, the stamp is for $200! That's the most expensive stamp I've ever seen! Otherwise, it looks just like a postage stamp, but a little bigger.

    You should do exactly what you did once your Trust was executed, and that is to RUN (don't walk) to the nearest copy machine and make duplicates. Then, take the original, and put it in your safe. After the original is secure, take ONE of the copies and KEEP IT WITH THE FIREARM! This is your GET OUT OF JAIL FREE CARD. DO NOT LOSE IT!

    Some people copy the Form 1, shrinking it down to business card size. They then laminate it, and carry it around in their wallet. While it will take a magnifying glass to read, it IS a portable method for keeping your DEFENSE TO PROSECUTION with you.

    I have chosen, instead, to fold up a copy and keep it near the firearm (or IN it!)

    For my AAC M4-2000, I keep a copy in the pouch along with the suppressor:



    For my SBR, go one step further. I love my Tango Down VFG, because it has STORAGE capability!



    You'll notice TWO Forms in the picture, other than the batteries. One is for the SBR, and the other is for the AAC M4-2000, since it is the rifle the suppressor is usually attached to.

    Speaking of the M4-2000, I love this thing. Check out the front of it:



    Too cool...

    Form 4

    The Form 4 is similar, except there is no engraving. The ORIGINAL MANUFACTURER already engraved it. Do you see the engraving on the suppressor above? See the required text? It's there.

    The process for a Form 4 transaction is slightly different. You will go to the Fun Store, and pick out what you want. You then arrange the transaction with the store owner (Class 3 Firearms Dealer.) He will most likely have you pre-pay either a percentage, or full amount, before he sends off the forms. He will need you to fill out a Form 4, and bring a $200 check along with your Declaration of Trust. He then will send off the paperwork to be approved.

    A month or so later, he will give you a call. You now get to go to the store, where he will present you with the stamped/approved Form 4 and your treasure!

    This was my first...



    Here's the Form 4 that went with it:



    Now you know how to do it. So get out there, and support our economy!
    Last edited by jwise; 12-10-2008, 04:25 PM.
    J. Wise

    AR-15 - AK-47 - NFA Trusts - My Pick - Carry Guns - 1911s

    "Some say you can tell how the world stands by the prices of AK-47s...." Chit2001

    Any comments contained herein regarding the legality of firearms, or the application of law, are strictly applicable to Texas. If you live in CA, NY, IL, MA, D.C., etc., the above comments will probably shock you, and should be read for educational purposes only. Most likely nothing I write will apply to you.

    sigpic

    Comment


    • #3
      Originally posted by jwise View Post
      I hope this has inspired at least one of you to take the plunge into the World of NFA!
      You're a bastard...

      I have wanted to enter the NFA world for a long time, and I considered the Trust avenue. I used excuses like cost, complexity, and my own lack of understanding to keep me from doing it. Now you have made it so easy and clear that I'm going to buy some software tonight, and some hardware soon.

      Thinking SBR & suppressor...

      I'll report back in about 4 months and post pic

      Comment


      • #4
        MISSION ACCOMPLISHED!
        J. Wise

        AR-15 - AK-47 - NFA Trusts - My Pick - Carry Guns - 1911s

        "Some say you can tell how the world stands by the prices of AK-47s...." Chit2001

        Any comments contained herein regarding the legality of firearms, or the application of law, are strictly applicable to Texas. If you live in CA, NY, IL, MA, D.C., etc., the above comments will probably shock you, and should be read for educational purposes only. Most likely nothing I write will apply to you.

        sigpic

        Comment


        • #5
          I have done both trust and corporate for customers, I let them decide for themselves as to what works best for them in thier own situation.

          I reccomend for an individual going the CLEO route, as then when one gets pulled over by the PoPo it is most likely his boss who has signed your forms.

          Comment


          • #6
            Originally posted by David Hineline View Post
            I have done both trust and corporate for customers, I let them decide for themselves as to what works best for them in thier own situation.

            I reccomend for an individual going the CLEO route, as then when one gets pulled over by the PoPo it is most likely his boss who has signed your forms.
            I recommend the Trust route over all other methods, as it limits your exposure, liability, and attachment of the assets from a judgment against you.

            But I could be wrong. I haven't taken Estate Planning, yet...
            J. Wise

            AR-15 - AK-47 - NFA Trusts - My Pick - Carry Guns - 1911s

            "Some say you can tell how the world stands by the prices of AK-47s...." Chit2001

            Any comments contained herein regarding the legality of firearms, or the application of law, are strictly applicable to Texas. If you live in CA, NY, IL, MA, D.C., etc., the above comments will probably shock you, and should be read for educational purposes only. Most likely nothing I write will apply to you.

            sigpic

            Comment


            • #7
              jwise, That's great stuff! Can Trust apply for and get an FFL?
              sigpic

              "Po Po coming through!" all rights reserved DJS



              'Do we really need 'smart bombs' to drop on these dumb bastards?'

              http://www.snipercompany.com/

              M16/AR15/M4 Armorer

              Comment


              • #8
                OH! It's freakin' ON!!!!!

                jwise - You da man!
                NRA Life Member

                The police are the public and the public are the police; the police being only members of the public who are paid to give full time attention to duties which are incumbent on every citizen in the interests of community welfare and existence. - Sir Robert Peel

                Every normal man must be tempted at times to spit on his hands, hoist the black flag, and begin to slit throats. - H. L. Mencken

                Comment


                • #9
                  Originally posted by zeplin View Post
                  jwise, That's great stuff! Can Trust apply for and get an FFL?
                  I do not believe so. That might be a question to ask the ATF.
                  J. Wise

                  AR-15 - AK-47 - NFA Trusts - My Pick - Carry Guns - 1911s

                  "Some say you can tell how the world stands by the prices of AK-47s...." Chit2001

                  Any comments contained herein regarding the legality of firearms, or the application of law, are strictly applicable to Texas. If you live in CA, NY, IL, MA, D.C., etc., the above comments will probably shock you, and should be read for educational purposes only. Most likely nothing I write will apply to you.

                  sigpic

                  Comment


                  • #10
                    Woo Hoo!!! Here we go!
                    ROLL TIDE!!!

                    Comment


                    • #11
                      Now what potential drawbacks exist with this? Could the ATF say come and take the guns away from the trust? Have legal right to attack the trust? Which is more secure, for me to own the firearms or for the trust to own them? In terms of a retroactive gunban/confiscation?

                      Just thinking way ahead. I like the idea. Just need to see all the bad with the good. Who is this not for?

                      Also, does each SBR, suppressor, SBS, etc require an individual tax stamp?
                      Last edited by AgentFox; 12-10-2008, 09:18 PM.

                      Comment


                      • #12
                        Reason for Editing.
                        Last edited by lazycop; 02-23-2010, 02:19 PM.
                        Work smarter not harder!

                        Comment


                        • #13
                          This is ripped from MDShooters.com which ripped it from AR15.com; it covers the same topic in certain areas with more detail and follows a nice Q 'n A format:

                          http://www.mdshooters.com/showthread.php?t=7074

                          Comment


                          • #14
                            Thank you SIR! Most EXCELLENT POST!

                            Comment


                            • #15
                              Just found out we can't have an NFA Trust in Missouri.
                              sigpic

                              "Po Po coming through!" all rights reserved DJS



                              'Do we really need 'smart bombs' to drop on these dumb bastards?'

                              http://www.snipercompany.com/

                              M16/AR15/M4 Armorer

                              Comment

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