Gun Trust Questions

Jigsore · Jul 29, 2013

I know that this topic is done to death around the web, but I have a unique situation and a question about it. Two years ago I formed a gun trust with Quicken Willmaker on the suggestion of a friend of mine who is in law enforcement. I had it notarized, and scheduled a suppressor in the trust that is registered to me as an individual. At the time I never realized that the suppressor had to be transferred into the trust, and tax paid on it. I know the trust is not valid unless it contains at least one item, and thought I had that handled by listing the suppressor. Since then I have registered an SBR through the trust, and it went smoothly. The suppressor is still registered to me as an individual, and the SBR is registered in the trusts name. Here is my question. Can I just remove the suppressor from the trust's scheduled items now? Will the ATF have a problem with me removing it although a transfer was never done? I assume that now the trust is valid because there is an SBR registered in it's name, but I plan on registering more items, and don't want this to be a problem if they see that I used to have a suppressor listed, and no longer do. The problem obviously being that a transfer/tax was not done to transfer ownership to the trust. I'm not concerned about the status of the suppressor because nothing has changed with it. It has always been registered in my name. The concern is if the rifle will ever become a problem because it is registered to a trust that didn't contain a legitimate item. I'm hoping to hear from someone with some gun trust experience. Thanks.

pchewn · Jul 30, 2013

Sounds like good questions for a lawyer who is experienced in NFA trusts.... You really need a lawyer for this one.

Jigsore · Jul 30, 2013

Only one of four has called me back, and he wants to redo the trust for over $1k. Frankly, the trust route has been a little bit of a nightmare from the beginning. There are too many questions about how to add items, remove items, etc. There is a ton of bad information out there, and I am not really interested in contacting a lawyer every time I want to purchase something. The ATF told me today that every time I change the trust in any way, including to add, or remove anything, that I need to send them an updated, and notarized copy of the schedule. I didn't even think they kept my trust on file, but apparently it stays there permanently, and they just build the file larger and larger over time. As of today I have started to process to transfer my items into my name as an individual. I realize it is not the perfect option, but I would rather just keep it simple at this point.

pchewn said:
Sounds like good questions for a lawyer who is experienced in NFA trusts.... You really need a lawyer for this one.

Stomper · Jul 30, 2013

I assume the can was in the Trust's schedule of property before you added the SBR? If so, then to begin with (for BATFE purposes) it was never a valid item in the Trust's asset schedule UNLESS the transfer tax was paid, approved and the tax stamp stating as much was sent back to the Executor (this being you) of the Trust.

There should be no problem removing the can w/o paying another tax (or fine) from the Trust assets schedule, notarizing it and sending a copy to the BATFE for the retained file on the SBR as the can is already registered to you (individually).

It also wouldn't hurt to put a sticky note (or cover letter) explaining it was an invalid listing of the can in the first place, and that it has always been in your possession, and that you (the same-self person to whom the can is legally registered) are the executor of the Trust.

I am not a lawyer and I don't play in bed, but this looks pretty "cut and dry".

Jigsore · Jul 30, 2013

I really appreciate this advice. In fact, after speaking with more than one attorney this is the best answer I have gotten. My worry is that if I notify them that the suppressor was not properly transferred to the trust they will consider it invalid, and my SBR stamp invalid as well. I am hesitant to raise any red flags, and just transfer the SBR from the trust to myself as an individual. The other answer that nobody seems to be able to give me is how to remove an item from the trust. Some say to just remove it. Some say to have it notarized. Where? right on the schedule A?The ATF told me earlier today that I need to provide a new schedule A every time I add or remove anything. TV, tools, etc. They apparently want a current copy of the scheduled property at all times. Can I just remove the suppressor from the schedule and send them a new copy? One lawyer I spoke to said that we need to revise my trust docs, and by doing so I will need to re-register any NFA items. If that is the case, I would rather just transfer them to my name and be done with it. Thanks for the advice.

Stomper said:
I assume the can was in the Trust's schedule of property before you added the SBR? If so, then to begin with (for BATFE purposes) it was never a valid item in the Trust's asset schedule UNLESS the transfer tax was paid, approved and the tax stamp stating as much was sent back to the Executor (this being you) of the Trust.

There should be no problem removing the can w/o paying another tax (or fine) from the Trust assets schedule, notarizing it and sending a copy to the BATFE for the retained file on the SBR as the can is already registered to you (individually).

It also wouldn't hurt to put a sticky note (or cover letter) explaining it was an invalid listing of the can in the first place, and that it has always been in your possession, and that you (the same-self person to whom the can is legally registered) are the executor of the Trust.

I am not a lawyer and I don't play in bed, but this looks pretty "cut and dry".

Stomper · Jul 30, 2013

No, no, no... The Trust itself is not invalid, its just the listing of the suppressor that is individually registered to you is invalid. It will not affect the status/validity of the SBR "owned" by the Trust one single iota.

Instead of paying the $200 tax and transfer the SBR to you, it would actually be easier to pay the tax and transfer the registration of the suppressor into he trust. No background check, no dinking around with the CLEO to sign off, no finger prints, plus your heirs can be listed on the Trust can enjoy the NFA assets in perpetuity... Consider it.

In any event, simply draft up a signed and dated document that states the changes being affected to the property schedule, with a (matching) dated property schedule that shows current items being listed, get them notarized, attach it to a copy of the original notarized Trust document (the one you sent in for the SBR) send it off the the appropriate BATFE address and you're done.

BTW- the BATFE only cares about the NFA items, so if you are listing "inane" things like "heirloom" chainsaws, great grandpa's gold watch, that velvet painting of Elvis, etc. you can put those on a "non-NFA" asset schedule and omit that from the BATFE submittal.

Where most people have difficulty is getting it in their thinking that a Trust is legally a "person" as far as the law is concerned. You, the Executor (in essence the executive "trustee") are the "brain and consciousness" of the trust.

Another way to think of a Trust is like having a "millionaire spouse" who is in a permanent coma, and you have COMPLETE Power of Attorney to make all decisions with that spouse's assets as you see fit. (Let's to shopping!... LOL)

I hope that helps!

Jigsore · Jul 30, 2013

Stomper, I really appreciate your feedback on this. So far I have gotten every answer under the sun. Your answer is what I would think too, but I should elaborate on why I am so concerned. I have been told by a few people so far that since the trust had only one item in the schedule A at the time I sent in the paperwork for the SBR, and it was a suppressor that was never transferred to the trust, that the trust is invalid at the time the SBR stamp was approved, and therefore the stamp is not valid because the trust was not valid. Now that the trust has an actual registered item in it I know that the trust is currently valid, but my concern is that the SBR stamp is not. Maybe that is not the case, but that is what I have been told by a few people, some of them lawyers that I have run this past. Granted, the lawyers are all trying to get me to spend money with them to re-draft the trust documents, but so far they have all said that the ATF examiner does not verify the validity of the trust, they just use a checklist to make sure all of the documents are there, and issue the stamp. If it ever comes up, it is up to me to prove that the trust documents were correct at the time of the SBR application. This is why I wonder if I pay to transfer it out of the trusts name, and into my name if it negates the fact that the trust was not valid at the time of the SBR approval.

The next thing that struck me as odd was that the ATF examiner told me today over the phone that you do need to notify them when the gold watch, velvet painting, etc. is moved from the schedule. They said that they want to know when beneficiaries change, items change, etc. I specifically asked if this included items rather than guns, and they said that it does. They want an updated copy any time that anything changes at all. It sure would be easier to continue to use the trust, but again, the lawyers that are trying to make a sale have told me that any trust written with Willmaker will land you in prison if something gets questioned. The first thing most people say is "talk to a good gun lawyer", so I have, and all they want to do is tell me that everything I have done will land me in jail.

The only reason that this whole thing even came up is because I want to build an SBR from the ground up, and have never filed a form 1 before. I started reading about what is needed to do so and ran across the part where any NFA items have to be transferred into the trust with a new stamp, and if not, they are not part of the trust. That I can live with, but I'm going to have a problem on my hands if I find out that this SBR stamp is no good now.

Again, I really appreciate your input. It sounds like you have a lot of experience with the trust scenario. The last lawyer I spoke to last night wants $800 to re-draft my trust to make it NFA compliant (he has not seen my trust btw), and $175 to write a letter to the ATF explaining my situation, and basically I have to make an appt. every time I have a question about something. I don't have a problem registering into my own name from now on, but just need to be sure the SBR is legitimate.

Stomper said:
No, no, no... The Trust itself is not invalid, its just the listing of the suppressor that is individually registered to you is invalid. It will not affect the status/validity of the SBR "owned" by the Trust one single iota.

Instead of paying the $200 tax and transfer the SBR to you, it would actually be easier to pay the tax and transfer the registration of the suppressor into he trust. No background check, no dinking around with the CLEO to sign off, no finger prints, plus your heirs can be listed on the Trust can enjoy the NFA assets in perpetuity... Consider it.

In any event, simply draft up a signed and dated document that states the changes being affected to the property schedule, with a (matching) dated property schedule that shows current items being listed, get them notarized, attach it to a copy of the original notarized Trust document (the one you sent in for the SBR) send it off the the appropriate BATFE address and you're done.

BTW- the BATFE only cares about the NFA items, so if you are listing "inane" things like "heirloom" chainsaws, great grandpa's gold watch, that velvet painting of Elvis, etc. you can put those on a "non-NFA" asset schedule and omit that from the BATFE submittal.

Where most people have difficulty is getting it in their thinking that a Trust is legally a "person" as far as the law is concerned. You, the Executor (in essence the executive "trustee") are the "brain and consciousness" of the trust.

Another way to think of a Trust is like having a "millionaire spouse" who is in a permanent coma, and you have COMPLETE Power of Attorney to make all decisions with that spouse's assets as you see fit. (Let's to shopping!... LOL)

I hope that helps!

Jigsore · Jul 31, 2013

Well a big thanks to Stomper. I managed to get my dilemma handled with the ATF today, and they were pretty understanding of my situation. Now I am going to have a lawyer review my existing trust documents to be sure that everything is how it should be. I'm pretty sure that the document itself is pretty solid, but it won't hurt to have someone review it and just be sure. Rather than draft a new document, I will just have a lawyer add, or remove anything that they suggest. Now I feel confident that I can continue to use my trust, and protect the assets for my family. Thanks again.