Trust vs. Individual Form 4

[Mason3379]

So, I just went of NFATracker for the first time after seeing their thread on this forum. I see there appear to be far more Trust than Individual forms. I have looked into this before and never really understood the difference and how it works. I just recently sent off 2 form 4's for suppressors.
So my questions are, What is the difference in the two (Trust/Individual)? Why is/is not one better than the other?
If you could sum these up in a non-rocket scientists terms that would be appreciated! I am not a smart man, I was not blessed with good looks or a fully functional brain!

Thanks all!

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[Nwcid]

The original main reason to go trust is because the local LEO refuses to sign them for any reason for anyone.

After that the second advantage is that ANYONE on the trust can have legal possession of the items in the trust. The number of items and who is on the trust can change at anytime. So say your wife (assuming you have one) would not be in illegal possession of an NFA item if it was not locked up while you were gone. As an individual NFA ONLY you can have legal possession of it meaning you either have to make sure you restrict access to or you are there with others using it.

The last real reason is that you dont need an LEO sign off, finger prints (takes FBI a long time to run with every Form 4), and no passport photos.

Other then the initial cost of the trust there is no reason I can see why a person would not want one.

 

[PDXSparky]

Nwcid pretty much spelled it out:

Trust Benefits:

LEO signature not required.
Fingerprints not required
Photo not required
More than just the individual NFA owner can be in legal possession of the NFA item, which is what you'd want if you want your adult child or spouse to have the ability to use it when you aren't around.
I believe that since the trust owns the item, it can be inherited tax free.​

 

[Mason3379]

Okay, so what is the cost difference and why do they not require any of the form 4 hoopla?

 

[Nwcid]

I believe that since the trust owns the item, it can be inherited tax free.[/indent]

There is a tax free transfer of ANY Form 4 item when transferred to a family member as inheritance. The procedure is even right on the Form, http://www.atf.gov/forms/download/atf-f-5320-4.pdf basically it just says contact the ATF.

 

[Nwcid]

Okay, so what is the cost difference and why do they not require any of the form 4 hoopla?

I did not say there was no Form 4 a Form 4 or other is required for ALL NFA transfers. A Form 4 is still required, the items are just owned by the trust not an individual.

Trusts will cost based on your needs and comfort and there are tons of threads on here and the web. I am not a lawyer so I will not make suggestions. I have seen everything from Quicken "trust maker" (about $50) all the way up to full on lawyer written (several hundred dollars). The only requirement is that the trust is actually valid. If the trust is not done right it will not be valid. Best case of invalid trust is the ATF will not approve you transfer. Worst case is you have items in an invalid trust you are now in possession of unregistered NFA items which is something you dont want. So read up on it and make you own choice about how to do a trust.

 

[Redtazdog]

The other thing thats nice about a trust is if they ever decide to ban the sales, transfer of silencers like WA did with
MG and SBR's it can still get passed down to your family as it is still on the trust so no transfer of any is needed.
If you purchased a MG or SBR with a LEO sig before the ban in 1994 like some of us did you are the only person that can have it,
it cant get passed down to your family as that would need a transfer and it would need to be turned in, destroyed, taken to
a dealer to sell out of state.
In WA I cant even transfer a LEO sig toy to my own trust

 

[Mason3379]

I did not say there was no Form 4 a Form 4 or other is required for ALL NFA transfers. A Form 4 is still required, the items are just owned by the trust not an individual.

Trusts will cost based on your needs and comfort and there are tons of threads on here and the web. I am not a lawyer so I will not make suggestions. I have seen everything from Quicken "trust maker" (about $50) all the way up to full on lawyer written (several hundred dollars). The only requirement is that the trust is actually valid. If the trust is not done right it will not be valid. Best case of invalid trust is the ATF will not approve you transfer. Worst case is you have items in an invalid trust you are now in possession of unregistered NFA items which is something you dont want. So read up on it and make you own choice about how to do a trust.

I understand I still need the form, thus the word "hoopla". I was referring to the prints, sign off, picture and $200 check.
Thanks for the info.
When I get these Items, if I decided to transfer to a trust is that even possible?

 

[Nwcid]

For prints and photos read the "instructions" section of the Form 4. Part e and f say they are only required for individual transfers. Here is the link again, http://www.atf.gov/forms/download/atf-f-5320-4.pdf

You still pay $200 that is required on all Form 1 and Form 4. The only exception is transfer of an AOW which is $5.

Yes you can transfer them to a trust if you like but that is a transfer. A transfer requires submitting a Form 4 and paying the transfer tax.............. This is why I have 1 individual NFA item that I had before I had my trust.

 

[Abiqua]

I believe that since the trust owns the item, it can be inherited tax free.[/indent]

Both individual and Trust/Corp/LLC held items that are passed thru inheritance transfer tax free on a Form 5.

 

[waltermitty]

the only comment i have to add to the otherwise detailed information is the caveat that only those who would otherwise be entitled to possess a Title 2 firearm would be covered by the Trust. one shouldn't presume that to simply append John Dillinger as one of the parties to the trust would have entitled him to legal possession, use and ownership of the firearm.

 

[PDXSparky]

There is a tax free transfer of ANY Form 4 item when transferred to a family member as inheritance. The procedure is even right on the Form, http://www.atf.gov/forms/download/atf-f-5320-4.pdf basically it just says contact the ATF.

Both individual and Trust/Corp/LLC held items that are passed thru inheritance transfer tax free on a Form 5.

Excellent information. Thanks guys.

the only comment i have to add to the otherwise detailed information is the caveat that only those who would otherwise be entitled to possess a Title 2 firearm would be covered by the Trust. one shouldn't presume that to simply append John Dillinger as one of the parties to the trust would have entitled him to legal possession, use and ownership of the firearm.

Which is probably one of several reasons to have a lawyer involved if you do decide to go the trust route.

 

[Modeler]

I went the trust route for all the reasons listed above, and to make it easier on my wife when I die. She doesn't want anything to do with NFA rules, so I named a good friend as a beneficiary. Likewise, my friend's family doesn't want anything to do with his NFA items, so I'm the beneficiary of his trust.

I had an attorney do the trust, if for no other reason than to lay a solid, stable foundation for a lifetime of NFA collecting

 

[Nwcid]

Which is probably one of several reasons to have a lawyer involved if you do decide to go the trust route.

The Lawyer route will NOT help making sure whoever you list on your trust is legally able to possess a NFA item. That is something you will have to do on your own. The person(s) you list on your trust should be people you REALLY trust as they are legally entitled to ANYTHING in the trust. So before you ask them you should know if they are legally able to possess firearms or not way before even getting to that point.

The lawyer WILL make sure you trust is legal and valid.

 

[Stomper]

I used the trust template located in this forum, added the appropriate names and item(s) on schedule 1 & 2, had it signed and notarized by a gal at work (for free) who was a public notary, sent it and the $200 fee... About 6 months later (the average waiting time) I got my SBR tax stamp in the mail. No finger prints, no local LEO "permission", no drama... Total cost $200 (plus postage and delivery confirmation) and about an hour of my time drafting, printing, notarizing, and posting the Form-4 as per the instructions.

All clear, concise, and legal within Oregon's ORS framework concerning a revocable trust, which is what the BATFE looks at, according to your State of residence.


So easy a caveman could do it. (no offense to cavemen)

 

[Dan-Dee Sales Inc]

The person that picks up the class III item

Individual: will have to fill out a 4473 but not have it called in or charged $10.00
Trust: will have to fill out a 4473 and have it called in and charged $10.00