How To Set Up A Trust For NFA

[to the floor]

A trust isn't required to have a pour over will!!! The only reason you'd want that is in case you forgot to put something on the trust's schedule. My 95 year old Dad has everything in a trust. We don't have a pour over will because we are positive that everything he owns is listed in the trust. He has one bank account, a home, a car, and household possessions.

You don't probate things in a trust because the trust doesn't die.

I still don't believe you went to law school.

I don't much care if you believe it or not. As I said before I get tired of debating trust experts on the internet. If you were so smart you would have read up on trusts and figured out what the washington state attorney general has been telling WA residents for years on their website....only a small percentage of the WA population is right for trusts. Those with a lot of money. And now I don't believe you because if your dad is 95 you should have been looking at protecting his assets (if he has any) from the high cost of health care. And if you haven't been doing that you're foolish....

 

[Gunner3456]

Quote Originally Posted by Gunner3456
I'm not a lawyer. I'm seeing some things I'd like to clarify.

When you create a trust, you also make the schedule which describes what you are transferring to the trust. Once completed, the trust owns the items, not you, not the grantor and not any trustee. The trust itself is a "person" and it owns it. I can't remember if the trust is a person or an entity

You can amend the schedule to add or subtract things which the trust owns. Correct That's how you "fund" the trust. Yeah or you can fund the trust with a seperate bank account in the trust name There is "a rat" in separate. You would still want to name that bank account on the schedule if only to be sure that a successor trustee found it.

Once you create a trust named the "John Doe Joint Living Trust" it becomes a "person." or entity?? I put "person" in quotes because for our purposes here, it's explanatory and clarifying. You now can't change it by substantially re-writing it. If you do, you create another "person." I'm not being clear here, but you have to write an "Amendment to the John Doe Joint Living Trust dated (date of the original trust)" and have that notarized. Yes you make an Amendment to the trust using the same name of the original trust and have it notarized and witnessed. In other words you don't rewrite the whole trust or you'll create a whole new trust which doesn't own anything. You don't create a second trust. The first trust will own everything and the second trust by the same name will be a different "person" and will be unfunded. Amend with an amendment, don't rewrite the whole with the same name.

There is a grantor. That's the person(s) who own the items (or want to own them) and who wish to transfer ownership to a trust.

There is a trustee(s). That's the person who is in charge of the trust. That person(s) can buy, sell, transfer items belonging to the trust, and decide where they are domiciled. yes but your form 4 determines where they are domiciled. Otherwise I believe you have to fill out another form with ATF to change locations. Point is, only the trustee can decide to do that.

There is a first and maybe even a second and/or third successor trustee. In order from the first down, they become the trustee if the original trustee can't serve due to incapacity, death, or voluntary resignation. The original trustee can resign simply by drawing a resignation form, signing and having it notarized. Then the first successor is now the trustee.

There is the beneficiary(s). Those are the "heirs." They can also be successor trustees. Or not. I believe so unless they are under 18 in WA And in Oregon, they have to be a resident of Oregon.

At all times after forming and funding the trust, the trust owns the things on the schedule...yep.

 

[Gunner3456]

I don't much care if you believe it or not. As I said before I get tired of debating trust experts on the internet. If you were so smart you would have read up on trusts and figured out what the washington state attorney general has been telling WA residents for years on their website....only a small percentage of the WA population is right for trusts. Those with a lot of money. And now I don't believe you because if your dad is 95 you should have been looking at protecting his assets (if he has any) from the high cost of health care. And if you haven't been doing that you're foolish....

But that's Washington and in Oregon most people should have a living trust. It's so much easier on the heirs. Most of the estate laws are different.

I won't discuss Dad's estate or its value here, but it's well handled. And, he is very well right now, lives in his own home, walks without even a cane, and we go to the shooting range pretty regularly.

He's a vet of Normandy, fought through France and was wounded in Belgium just before what we now call The Battle of The Bulge. He has a Purple Heart and a Bronze Star. He can still out think and out shoot you, LOL.

 

[New Daddy]

I do but I am not advertising here. I was just surfing the web to see what is out there and came across this thread. I am sorry other attorneys don't return their calls...that is just kind of rude. But I understand to some extent as I make 1 hours pay doing a trust that takes me longer then that to do. A trust is an estate planning device that ATF now uses as a pass to get NFA items. BUT what happens IF something happens like Obama gets another 4 years and tries to do away with our second amendment rights (big if there) Pretty easy to cry illegal trust to do away with someone's "goodies". And who is going to stand up for this small segment of the population...the NRA??? LOL Yeah I know I had a boating accident too.

I'm sorry, but I have to disagree. First, you set your charges. If you bill 1 hour for something that takes you "longer then that to do," you need to call a guy like me to show you how to set up your business (yes, I am professionally licensed - and I guarantee that I'll bill you for every minute spent). Second, I've got a family trust set up. I can assure that the attorney 1) spent much longer than that working on it - we had two FTF meetings that went over an hour, and 2) she either has an awfully high billing rate or she billed for the time she actually spent.

 

[Gunner3456]

I'm sorry, but I have to disagree. First, you set your charges. If you bill 1 hour for something that takes you "longer then that to do," you need to call a guy like me to show you how to set up your business (yes, I am professionally licensed - and I guarantee that I'll bill you for every minute spent). Second, I've got a family trust set up. I can assure that the attorney 1) spent much longer than that working on it - we had two FTF meetings that went over an hour, and 2) she either has an awfully high billing rate or she billed for the time she actually spent.

I agree. The estate planning attorney who did my Dad's trust and the trust for my wife and me charged about $1k for each trust. Then he later charged more than $300 to amend ours. And, he's a long time family friend.

I would have done the trusts but there's a simple little matter in law. The person who drew the documents loses if there's any ambiguity. Because I'm the first successor trustee on Dad's trust, and my sister is second, and we are joint beneficiaries (heirs) I didn't want to risk any ambiguity which was of my doing.

 

[to the floor]

I'm sorry, but I have to disagree. First, you set your charges. If you bill 1 hour for something that takes you "longer then that to do," you need to call a guy like me to show you how to set up your business (yes, I am professionally licensed - and I guarantee that I'll bill you for every minute spent). Second, I've got a family trust set up. I can assure that the attorney 1) spent much longer than that working on it - we had two FTF meetings that went over an hour, and 2) she either has an awfully high billing rate or she billed for the time she actually spent.

Acknowledged

 

[to the floor]

I agree. The estate planning attorney who did my Dad's trust and the trust for my wife and me charged about $1k for each trust. Then he later charged more than $300 to amend ours. And, he's a long time family friend.

But guys want to buy gun trusts based solely on price. Differences in a "living trust" and a proper "NFA trust" are created by the language therein.

I would have done the trusts but there's a simple little matter in law. The person who drew the documents loses if there's any ambiguity. Because I'm the first successor trustee on Dad's trust, and my sister is second, and we are joint beneficiaries (heirs) I didn't want to risk any ambiguity which was of my doing.

smart thinking...most do not know of this principle.

 

[Gunner3456]

So...in Oregon I would want a living trust vs. a trust?

You would want a "revocable living trust." If there is more than one grantor, you'd want a "joint revocable living trust. For instance my wife and I have that. We are both listed as grantors and as trustees. If one of us can't serve as trustee, the other is the trustee. When neither of us can serve (due to things like being incapacitated, death or resignation,) then the first successor who is our adult daughter becomes the trustee.

At all times everything we own belongs to the trust and we are just trustees. Upon the death of either, the other becomes the trustee and each is the beneficiary (heir) of the other. Upon both of our deaths, our children are equal beneficiaries (heirs) and the adult daughter is in charge of closing out the trust and distributing the assets. She can choose to hire an attorney and pay for that out of the trust if she feels she needs it.

All she has to do to take over the bank accounts is to go to the bank with copies of death certificates. The bank accounts are already in the name of the trust, and the bank has a copy of the trust showing that she is the first successor trustee. Now she can do with the bank accounts as needed for administration, and in accordance with our instructions for beneficiaries. She's also allowed by law to charge a "reasonable" fee for her time.

This is the best part of a trust (in Oregon at least.) Because the trust owns everything, and the trust can't die, there is nothing to probate. The first successor trustee just takes over and closes it out, distributing assets according to the instructions as if it was a will, but it isn't.

This is not about a gun trust, which can be separate. If you need a gun trust, you don't list the gun items on your regular trust, but rather create the gun trust and fund it with the gun items. It needs to have a different name than your "family" trust. When I say "fund," I simply mean list items on the schedule.

 

[Gunner3456]

I would have done the trusts but there's a simple little matter in law. The person who drew the documents loses if there's any ambiguity. Because I'm the first successor trustee on Dad's trust, and my sister is second, and we are joint beneficiaries (heirs) I didn't want to risk any ambiguity which was of my doing.

smart thinking...most do not know of this principle.

Everyone needs to know this and think hard about it. My sister and I get along fine, but when there's money or things at stake... If I drew the trust and she later wanted to argue about what it meant and it was ambiguous, I'd lose.

 

[Gunner3456]

Thank your Dad from me for serving our country! I get to enjoy my freedoms because of men like him.

I will. He spent 6 months in the hospital in Kentucky recovering from wounds.

 

[Burt Gummer]

Gunner - just wanted to thank you for your knowledge as to what works with these trusts over the last several weeks. I think I speak for a lot of people who think you're a great member and asset to this forum.

As for your dad, he's sitting their eating deep fat fried food, probably adding a lot of salt to it, been shot up, and will probably still outlive me by twenty years lol.

 

[Gunner3456]

Gunner - just wanted to thank you for your knowledge as to what works with these trusts over the last several weeks. I think I speak for a lot of people who think you're a great member and asset to this forum.

As for your dad, he's sitting their eating deep fat fried food, probably adding a lot of salt to it, been shot up, and will probably still outlive me by twenty years lol.

You're welcome. As for Dad, he has absolutely no artery problems, eats whatever he likes, walks without even a cane, and yes, pours salt on everything. He can still out shoot you, LOL.

 

[Gunner3456]

I need to add that we actually transferred everything to the trust. We went to a title company and transferred our home into the name of the trust. We went to DMV and transferred our car titles to the trust. Our bank accounts are in the name of the trust. Even our checks say "The John Doe and Jane Doe Trust, John and Jane Doe, TTE's. (Trustees.) If a grocery store wants ID, I show them my DL and I'm one of the trustees. Never had a problem.

The trust is revocable, meaning we can decide we don't want it and back everything out. There's no reason because we fully control everything, and as trustees can still buy, sell, withdraw for our own use, etc. If we sold a car we'd just sign the title as trustees, as in "John Doe, TTE." When we buy a new car, we've never found a dealer who knows how to sell to a trust, so we buy it in our names. As soon as we get the title in the mail, we go to DMV and get it re-titled to the trust.

 

[shawge]

Good info Gunner. Are there any tax implications when everything is in the trust?

 

[Gunner3456]

Good info Gunner. Are there any tax implications when everything is in the trust?

No different from personal. If the trust earns interest or dividends, etc., it passes straight through to the grantor. Estate taxes for the heirs are the same. For instance if the grantor put a 401k in the trust, then normal 401k withdrawal taxes would apply for the heirs... No different.

 

[to the floor]

No different from personal. If the trust earns interest or dividends, etc., it passes straight through to the grantor. Estate taxes for the heirs are the same. For instance if the grantor put a 401k in the trust, then normal 401k withdrawal taxes would apply for the heirs... No different.

It's been a really long time since I looked at it but I believe with a trust you are in a 36% income bracket as opposed to a lower bracket for an individual. Obvioulsy this amounts to pennies unless you have substantial income producing property in the trust

How do you reply here without using the quotes??

 

[Gunner3456]

It's been a really long time since I looked at it but I believe with a trust you are in a 36% income bracket as opposed to a lower bracket for an individual. Obvioulsy this amounts to pennies unless you have substantial income producing property in the trust

I don't think so. The trust doesn't apply for a separate tax ID number. In fact, I don't know if it can. I believe the income from the trust is treated as income for the grantor and is simply included in the grantor's return at his tax rate. When we get a tax statement for interest or dividends for instance, we just add them to our return as income even though they are in the name of the trust. Our CPA does that without any mention of it.

Edit: I forgot. If we have capital gains on things which belong to the trust, we get the capital gains rate on our personal return.

How do you reply here without using the quotes??

You simply hit one of two reply buttons instead of the "reply with quote" button.

 

[to the floor]

I see it. I was wondering why this site was making me sign in again before I posted. It wasn't leaving me logged in all the time.

 

[Gunner3456]

I see it. I was wondering why this site was making me sign in again before I posted. It wasn't leaving me logged in all the time.

Oh, that's different. I have a free program called LastPass. It stores all of my passwords in secure encrypted form in the cloud. Every time I reboot my computer, I have to log back into LastPass, and then it logs me into any site which requires a password. If my HDD breaks, I don't have to try to find my passwords. Link

 

[New Daddy]

Lawyers should not give advice outside of the scope of their practice.

http://www.irs.gov/pub/irs-pdf/f1041es.pdf

Income distributions (money you get in your hands) from trusts are taxed at the beneficiaries rates, as reported on the K-1. The tax rates on trust (held in the trust) income ranges from 15-35 percent. The worksheet and tax tables appear on page 5.