Trust Question (invalidated?)

[rayd8]

I'm interested in going the trust route and in my initial investigation discovered 'some' folks have had their trusts invalidated and NFA items seized.


So my question for the lawyers, internet-lawyers, or those with better Google-Fu:

What invalidates a trust?

What are some things I need to make sure my trust includes?

I'm probably going to have a lawyer draft my document once I find one qualified to do so. Suggestions welcome

Thanks!

RD8

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[Outrider]

What you're reading is a lawyer who is involved in trying to get new business. He is correct that some people are having trouble using cookie cutter trusts produced by computer software where the end result doesn't comply with the respective laws of individual states or has been filled out incorrectly.

His state, Florida, modified its law on trusts in 2007. He claims (and I have no reason to doubt him on this point) that Florida's new requirements / formalities are not in some of the software for making trusts and as a consequence they are not included in the trust document. That means while there was an attempt to form a trust, depending on the type of defect, it may be invalid. If the trust is invalid under state law, the ATF can reject the application.

There are all kinds of mistakes that people make, i.e. putting names in the wrong spots for trustees and beneficiaries, improperly funding the trust, not sending in a Schedule A with the Form 4, etc.

 

[wired]

Don't beleive everything you read. If you can do your own taxes with off the shelf software you can make your own trust with quicken software. Don't do stupid stuff like making yourself the beneficiary of the trust and you'll be OK. Quicken willmaker makes the trust state specific.

 

[simpleguy]

wired,

Forgive me, but writing your own wills and trust using online software, I liken to operating on yourself using a one of those "XXXX for dummies" books.

This is not to be demeaning, maybe you have done it and done it successfully. But we are talking about making a TRUST that interacts quite directly with an agency that has little or no respect for the Freedoms of the Citizens of this GREAT Country. These guys have revoked or suspended the FFL's of businesses because they have made such simple clerical errors on 4473's as putting "LN" instead of fully spelling out LANE, in a street address.

FWIW, I'd rather spend a few hundred bucks and buy the "insurance policy" so to speak of an experienced lawyer, then again, I also use a CPA for the same reason. In my opinion I have a healthy fear/respect for these agencies and I want to stay as far away from them and as far off their radar as possible. Not that I am "anti", I just think avoidance is the best policy with their respective histories.

rayd8,
There are some great suggestions on local attorneys if you do a search.

 

[Outrider]

If you can do your own taxes with off the shelf software you can make your own trust with quicken software.

I deal with an accountant almost on a daily basis and the programs that are for sale to do your own taxes at home are very limited. If a person has a simple return, these home version programs can do it. If a person has a complicated return where it involves multiple sources of income, multiple stock transactions, multiple business entities, etc., the boat ends up on the rocks quickly. There is a lot to the tax code and it is easy to create a garbage in, garbage out result with the software people use on their home PC's.

Quicken willmaker makes the trust state specific.

The problem is that it is not always updated with state specific changes and some of the information it contains is incorrect. It also is very bare bones. It cannot deal with complexity very well. And again, if the person does not understand what he is doing you can get the garbage in, garbage out result.

People hate spending money and it is tempting to think a relatively inexpensive program is going to produce a good legal document or a good tax return. The program can sometimes do it, but often it fails.

If there was a forum for tax software and law software and users were discussing the pluses and minuses of each like we do with guns on firearms forums, Quicken and Turbo Tax would be the equivalent of junk guns. Sure, you can use them and they might work, but they're not reliable for serious use.

 

[wired]

Youre really reading too much into it. The ATF just wants a trust that is valid in your state. An attorney can draft you a trust that is valid in your state and so can you. Its not rocket science and if the ATF is satisfied as to the validity of your trust they will approve your form 4 or form 1. If they are not satisfied they will kick it back to you to get corrected. Thats what they are doing these days. I am 9 for 9 on quicken a trust. I do my own taxes and file my own divorce papers. Once the form is approved they don't spend any more time looking at it for possible errors. It goes into the warehouse from Indiana Jones and thats the end of the story.

If you draft a trust that the ATF rejects its no big deal. They send it back to you for revision. They do not approve a form 4 and later revoke it for trust problems. If I was an attorney I'd say that quicken trusts werent any good too. If I was an accountant I'd say that off the shelf tax software sucked too.

 

[coctailer]

I deal NFA stuff all day, everyday.

The "Off the shelf" trust programs have never been rejected or questioned by the ATF on my Form4s.

I've seen some that were barely a step above a cocktail napkin with "I haz trust, kan I haz silencerz" written in lipstick.

 

[Outrider]

The ATF just wants a trust that is valid in your state.

Yep. But using the Florida example, Quicken wasn't updated to make a valid trust in Florida and if you use Quicken for it, it can be rejected. I'm not saying your life will end or you will be hauled off to prison. I'm simply saying that the program is fairly limited and when we hear people having trouble getting a trust created by Quicken approved, it can be because the software is not up to date and not capable of producing a valid trust in a given state. And as you pointed out people making themselves the trustee and sole beneficiary has gotten trusts rejected. It's a typical mistake someone makes when they do not understand what they are doing.

I have not used a Quicken trust for N.F.A. items in Oregon. I have no reason to doubt that it has worked for you in Oregon. However, the issue is not what has worked for you. The original poster asked why some people are having trouble with cookie cutter trusts and what common mistakes were. I think we have covered them.

If I was an attorney I'd say that quicken trusts werent any good too. If I was an accountant I'd say that off the shelf tax software sucked too.

If you were an attorney or an accountant, you would know why they are not great. Do you know what makes something a qualified dividend for taxes? Do you know how to set up a trust dealing with different properties and multiple beneficiaries and account for tax issues? -I'm not asking to belittle your abilities. It's not really important if you know. There are people out there who do not know and the software does not help them make those distinctions or deal with those issues.

People get paid to do specific jobs because of specialized knowledge and experience. I can seal a cut that would be a candidate for stitches with Krazy Glue, but it does not mean I'm qualified to practice medicine.

 

[wired]

I am not trying to set up a trust to do anything other than circumvent an LEO signature in a county known for extremely liberal politics. What happens to any of this stuff after I die I really don't care about. I'm in Washington. Try finding an attorney in Washington that will set up an NFA specific trust for under $1000. Good luck. Not worth it IMHO. Sure there are some people that have problems with self drafted trusts in some states. Those cases are like gold to attorneys who specialize in drafting NFA trusts because they can fear monger all the way to the bank. You can go to an attorney for a trust because you fear the ATF because an attorney across the country found one case where a trust was rejected and you can sleep good at night. Or you can listen to dealers that send thousands of them in a year and have no problems or you can listen to individuals ( former 02/07 ) that have practically made a lifestyle out of filling out gov't forms and have never had a problem. Everything in life is a choice. In practice the worst that will happen if you file an invalid trust is the ATF kicks it back for revision and you get to talk to your examiner on the phone.

 

[coctailer]

So, I went and actually read the link in the OP.

The guns were never taken, and some dude blogging on the net said the ATF had an issue with his specific trust. The wording in the trust was corrected and all is well in the land of Quicken Trusts.

So, in the end. Dude uses a will-maker type program, ATF says "You forgot to dot the i and cross this t"
They dot the i and cross the t and everyone is happy.

I see absolutely no hint of a willmaker program being an issue with the ATF.

 

[coctailer]

I'm interested in going the trust route and in my initial investigation discovered 'some' folks have had their trusts invalidated and NFA items seized.


So my question for the lawyers, internet-lawyers, or those with better Google-Fu:

What invalidates a trust?

What are some things I need to make sure my trust includes?

I'm probably going to have a lawyer draft my document once I find one qualified to do so. Suggestions welcome

Thanks!

RD8

Do you have a link to someone that has had their items seized?

The were never taken in your link.

 

[wired]

The only guy Ive heard of was in Florida and was all over silencertalk complaining about his trust getting kicked back but he never would answer basic questions about what happened to get his trust rejected. Seemed like a lawyers shill to me.

 

[wired]

Do you know how to set up a trust dealing with different properties and multiple beneficiaries and account for tax issues?

No. I don't have to. Setting up an NFA trust does not have to be a life altering decision. Its something I do to get around having to beg the local sheriff for her signature in a socialist democrat city that she will never give. My NFA trust has 9 silencers on it. Thats all. It may get more at some point but it will never have anything other than silencers on it. Maybe when I die my heirs can take the trust down to their lawyer and figure out if they want to go through the hassle of figuring out who gets the 40 year old silencers.


FWIW I also stitch myself up on a regular basis. That doesnt make me a doctor but it does help me not need to pay one a few hundred bucks to do something an imbecile could do.

 

[LuftPost]

great pics wired

 

[wired]

great pics wired

Just a few examples of what you can actually do with a Quicken trust if you dont listen to the bullsh!t fear mongering.

 

[Outrider]

No. I don't have to. Setting up an NFA trust does not have to be a life altering decision.

SNIP

FWIW I also stitch myself up on a regular basis. That doesnt make me a doctor but it does help me not need to pay one a few hundred bucks to do something an imbecile could do.

You're missing the point. It's like it's either one extreme with you or it's the other. A bare bones trust can pass muster in certain states. In others, it doesn't and it can get rejected. What the original poster ran into was a report of cookie cutter trusts getting rejected and wanted to know what the deal was.

I am familiar with this particular issue because a friend of mine in FL is dealing with this right now. That's why I recognized the attorney's blog and what the issue was with Florida law and out of date software. My friend was running into the complications of his software generated trust not matching up with FL state law. It's not a question of fear mongering. It's something where you don't know what you don't know. He ended up using a valid trust that existed before Florida changed its law to acquire a N.F.A. item. He is waiting for the approval.

As far as being your own lawyer, doctor, and accountant goes, you can do fine until you reach a real problem that is beyond your knowledge and ability. My question to you was to demonstrate that there's a point where people without specialized knowledge do not understand what they're doing when using a computer program to make a trust or do taxes. Whether it's life altering depends on what kind of mistake it is.

 

[wired]

You're missing the point. It's like it's either one extreme with you or it's the other. A bare bones trust can pass muster in certain states. In others, it doesn't and it can get rejected. What the original poster ran into was a report of cookie cutter trusts getting rejected and wanted to know what the deal was.

I am familiar with this particular issue because a friend of mine in FL is dealing with this right now. That's why I recognized the attorney's blog and what the issue was with Florida law and out of date software. My friend was running into the complications of his software generated trust not matching up with FL state law. It's not a question of fear mongering. It's something where you don't know what you don't know. He ended up using a valid trust that existed before Florida changed its law to acquire a N.F.A. item. He is waiting for the approval.

As far as being your own lawyer, doctor, and accountant goes, you can do fine until you reach a real problem that is beyond your knowledge and ability. My question to you was to demonstrate that there's a point where people without specialized knowledge do not understand what they're doing when using a computer program to make a trust or do taxes. Whether it's life altering depends on what kind of mistake it is.

I think your the one missing the point . For the very vast majority of people who only want to run around the sheriff signature the quicken route is perfectly fine and by far the cheapest and most efficient way . It doesnt have to be perfect . Just OK enough for the ATF.

 

[ZachS]

I think your the one missing the point . For the very vast majority of people who only want to run around the sheriff signature the quicken route is perfectly fine and by far the cheapest and most efficient way . It doesnt have to be perfect . Just OK enough for the ATF.

And a will you find on the internet, or at the library in a NOLO book, is also OK.

Until it's not.

It sounds like you haven't had any problem with the Quicken trusts. You probably never will.

Unless you do.


Point being, a lawyer's job in these contexts is to look into the future and see possibilities that you can't, and make sure you're prepared for them.

 

[wired]

And a will you find on the internet, or at the library in a NOLO book, is also OK.

Until it's not.

It sounds like you haven't had any problem with the Quicken trusts. You probably never will.

Unless you do.


Point being, a lawyer's job in these contexts is to look into the future and see possibilities that you can't, and make sure you're prepared for them.

Which once again only matters if you are actually trying to do estate planning. If you arent then it doesnt make one bit of difference if you scribbled out a trust on a napkin or did one with quicken willmaker. Its good enough for the ATF and thats all that matters to the majority of people. If I get really worried about it before I die of old age I'll transfer everything to where I really want it to go on form 4's.

 

[Trlsmn]

As soon as I read the title of this thread "Trust Question (invalidated?)" I knew this would be a "David M. Goldman Gun trust lawyer" scare topic post. Advice from a lawyer on creating a trust is a good thing, "David M. Goldman Gun trust lawyer" on the other hand is a propaganda artist with self interests at heart, not the good of the gun community at heart.

IIRC the stated scenario that "David M. Goldman Gun trust lawyer" refers to was disputed by the actual person involved in the scenario and disputes the facts as presented by "David M. Goldman Gun trust lawyer".

We do have a member here that is a lawyer that has done gun trusts and comes highly recommended from some close friends.

Member: Ski_Dog