SBR questions...

So I'm setting up a trust using Quicken WillMaker. Been doing a fair amount of reading here, at TOS and elsewhere but I thought I'd throw this out here since the opinions on this forum generally seem to be better informed. I have a Stag that I bought as a lower and then later put a Stag upper on it. I now want to SBR it. A couple of questions: WillMaker wants me to list property that belongs to the trust. Should I go ahead and list the Stag as property of the trust, or should I send in my Form 1 first? And when can I purchase a short upper for it? Do I have to wait for the ATF approval to come back, or can I just buy one (assuming I can find one) since it's only an upper and the Stag is currently in a legal, complete non-NFA configuration? I own a couple of other complete AR's. If it makes any difference I could store the upper at a non-gun-owning friend's house until the approval comes back. Finally, when does the engraving need to happen? Can I have it done any time after ownership of the Stag is transferred to the trust? Does it need to be done before assembling the SBR? Thanks for helping an NFA newbie out...

You can list the Stag as property of the Trust now if you want to. I would not wait any longer than when you receive the stamp. Once the stamp is received it is definately Trust property and should be reflected in your Trust schedules.

You will get mixed answers on when you can purchase a short upper. My personal recommendation is to wait until you have a properly registered lower (MG, SBR, Pistol) before purchasing the short upper.

I normally have my engraving done as soon as I mail the Form 1. I do not recommend assembling the SBR without the engraving being done first. Also keep in mind that if you have the stamp before getting it engraved that you can't leave the lower with just anyone. New rules must be followed with NFA items leaving your possession.


The above is just my opinion. TIFWIW

I too am considering going the RLT route, simply because my current posting abroad precludes ready access to my CLEO back home, and a Trust would would allow me to save time by submitting the paperwork while I am still overseas. Trouble is, there is a lot of surface-deep information out there, but very little in-depth guidance without retaining costly legal counsel. (Military lawyers have no idea what an NFA Trust even is, and civil experts routinely quote $600 for such a service.)

Obviously, the Quicken WillMaker method would seem to provide a much better return on investment, but lacking an exemplar or reference Trust document leaves me with no idea what "right" even looks like. I am a previous Class III owner, but have no experience with setting up a Trust. Are there decent examples available online, or M4CN members here that might be willing to provide sanitized copies of their own RLT paperwork via private e-mail, perhaps? I don't want to overlook some obscure detail that seems trivial now, but which could result in significant headaches years down the road.

Chief

Just my HO, but I would NOT rely on a computer program for a trust. I used an attorney and am damn glad that I did .

I had the exact same question and decided to call BATFE last week to clear it up.

I explained that I was submitting a Form 1 to apply for making and registering an SBR via a trust. I asked if the firearm (existing lower) should be listed on the 'Schedule A' sent in along with the declaration of trust upon submitting the application. He said no, you are applying for ATF approval on making an SBR and that item would not be trust property until the trust is approved to own/register the property.

I recommend doing your own research, but that was my experience for what it's worth. Hope it helps.

There's nothing that says a trust can't own a title I firearm, so I don't see why it couldn't be listed as a trust's asset prior to form 1'ing it.

Thanks for the info and suggestions. I will certainly do some more research. It seems pretty straightforward, but I'm thinking I might see about getting an attorney to review it after generating the document from WillMaker.

Chief, if you're willing to wade over into TOS, there is a long stickied thread there in the general NFA forum regarding Trusts. On page 13 (of 53 currently), a user named SWATH has posted images of the trust document that he used (generated using WillMaker and revised after consulting an attorney).

Argus,

For obvious reasons, I'm hesitant to put too much stock in a TOS "How To" when it comes to legal matters, but I'll definitely take a look. It surely can't do any harm, and I have much to learn!

Rob is right, of course, but I just had a sense that, if I could see one that was set up correctly, I might be able to get my JAG folks to do a once-over on it, and make sure I'm not missing any specific provisions that might apply to my 2A-friendly state. I'm no attorney, but I have had some graduate level law classes, and I do understand some of the associated linguistic complexities.

I'm just lacking a basic framework from which to proceed, and the Quicken method is likely a bit too broad to deal with contingencies or long term disposition of an SBR. Yes, the SBR becomes a trust asset, but the associated NFA restrictions make this a bit more involved than declaring something like an espresso machine a trust asset. I guess I'm really questioning if there even is such a thing as a "one size fits most" RLT format, and my sense is that the answer is yes. And no. Go figure. :)

Chief

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Originally Posted by Gingerkid

I had the exact same question and decided to call BATFE last week to clear it up.

I explained that I was submitting a Form 1 to apply for making and registering an SBR via a trust. I asked if the firearm (existing lower) should be listed on the 'Schedule A' sent in along with the declaration of trust upon submitting the application. He said no, you are applying for ATF approval on making an SBR and that item would not be trust property until the trust is approved to own/register the property.

I recommend doing your own research, but that was my experience for what it's worth. Hope it helps.

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Interesting!

I send my F1s in with my SBRs already added to the Sch A. There were no problems. They must have some flexibility in this since the end result is the same.

Any property can be added to the Trust at any time. The only thing that would change would be the status of the weapon.... not sure if that would matter as far as Sch A terminology.

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Originally Posted by markm

Interesting!

I send my F1s in with my SBRs already added to the Sch A. There were no problems. They must have some flexibility in this since the end result is the same.

Any property can be added to the Trust at any time. The only thing that would change would be the status of the weapon.... not sure if that would matter as far as Sch A terminology.

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I have seen the Form 1's approved with it done both ways.... I'm just doing it the way the nice man at BATFE told me too :)

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Originally Posted by Army Chief

Are there decent examples available online, or M4CN members here that might be willing to provide sanitized copies of their own RLT paperwork via private e-mail, perhaps? I don't want to overlook some obscure detail that seems trivial now, but which could result in significant headaches years down the road.
Chief

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You are wise to worry about "some obscure detail." The do-it-yourself law forms that you can find in any Office Depot are generalized forms to be used in any of the 49 states. But, they are not state-specific. Bear in mind that, while estate and trust law is generally similar from state to state (but beware Louisiana!), it is a creature of state law. Thus, if you want to form a trust which conforms to the law of your state, you would be well-advised to use a go-by from that same state as the laws do vary from state to state.

You can go to any gun show and buy a book on how to convert your AR to full auto. Or how to make a suppressor from 3 snuff tins, some bubble gum, and a little baling wire. That doesn't mean that it's a good idea.

NFA playtoys, especially the FA kind, are pricey and gonna get worse. My advice is, find a lawyer who knows about NFA gun trusts. (Or set up a corporation. That doesn't cost as much as people think.)

A few Dinar from my end.

I used Quicken Willmaker (actually the FFL did it) and I had zero problems. You just need to know what info to plug in where. As for going the corporation way I advise against it. First most all states require a corporation to pay taxes and information on corporations is almost always public knowledge. Only a handful of states (I think 8 or so) actually require that you file trust information with a local or county office.

As for finding a lawyer that does NFA trusts, I did some research and didn't have all that much luck in Arizona. I also know someone that paid for one in GA (over 500.00) and I couldn't see anything different from what the "lawyer" version stated as opposed to the Quicken Willmaker version.

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Originally Posted by Iraqgunz

As for going the corporation way I advise against it. First most all states require a corporation to pay taxes and information on corporations is almost always public knowledge. Only a handful of states (I think 8 or so) actually require that you file trust information with a local or county office.

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A trust is private and doesn't have the annual compliance that a corp or LLC has. On the other hand...

1. Corp and LLC compliance is very easy. Like a one page form every year that the state corporation commission sends you and reminds you about.

2. The existence of the corporation and very basic information is available to the public. The fact that it owns NFA weapons or that it exists for that purpose is not.

3. There are some longer term advantages to an LLC or corp versus a trust. For example, your trust cannot exist forever - it is a vehicle designed by estate attorneys and the rule against perpetuities may prevent you from passing on your items without your heirs paying a $200 per item tax. If you use a LLC or corp, that entity can exist forever and you can assign, sell, bequeath, etc. your "shares" or ownership in the entity. The entity still owns the NFA items and thus no taxable transfer occurs even if you transfer ownership of the company. What all of that means is that you can leave the "company" to your heirs or sell the company, which of course includes all of its "assets" (the NFA items), and there is no transfer of the items in the eyes of the ATF.

Just some things to think about. The trust route has become popular and it is not a bad option, but it is not the "best" one for everyone.

Potatoe or Potato. Everyone has their thoughts.

from what i can tell the corp route is a lot easier for most folks. my oregon corporation was stupid easy to set up. cost me a morning at the secretary of state's office (only because i didn't want to mail it) and $59 registration fee. one page of paperwork listing the officers and addresses and I was incorporated. $29 annual registration renewal fee- just completed the one page form to renew again this year.. took 2 minutes and they even let me fax my credit card info for payment.

as far as it being public info- the only thing thats public is the fact that my corporation exists, it's mailing address (can be PO box), and the names of the officers. the items your corporation owns are not public.

I understand that the items that the corp. owns are not public, but I do know that there is alot information out there that can be had, especially with a good detective. Also, I believe that the corp. has to pay yearly taxes does it not? I simply prefer the trust route as the only ones that are in the loop are me, the FFL and BATFE. But, hey different strokes for different folks.

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Originally Posted by bkb0000

from what i can tell the corp route is a lot easier for most folks. my oregon corporation was stupid easy to set up. cost me a morning at the secretary of state's office (only because i didn't want to mail it) and $59 registration fee. one page of paperwork listing the officers and addresses and I was incorporated. $29 annual registration renewal fee- just completed the one page form to renew again this year.. took 2 minutes and they even let me fax my credit card info for payment.

as far as it being public info- the only thing thats public is the fact that my corporation exists, it's mailing address (can be PO box), and the names of the officers. the items your corporation owns are not public.

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Is one of these easier to relocate to another state? I am leaning toward a trust at this time.

I have moved 9 times in the last 17 years... I expect to move again in the next few years.

Thanks

Buckaroo

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Originally Posted by Iraqgunz

I understand that the items that the corp. owns are not public, but I do know that there is alot information out there that can be had, especially with a good detective. Also, I believe that the corp. has to pay yearly taxes does it not? I simply prefer the trust route as the only ones that are in the loop are me, the FFL and BATFE. But, hey different strokes for different folks.

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no- quite the opposite. the benefit to the corp is that there are no taxes for most small businesses. the taxes only kick in once the corp exceeds $250,000 in annual profit- most dont, as any excess profit goes into bonuses and raises and such.

my construction company hasn't ever paid a dime in taxes.

Which is better, a Cadillac or a Suburban? My very accurate 14-pound AR-based NRA service rifle or your 12-1/2" Noveske SBR? Levis or FatButtz jeans?

As with most everything in life, the answer depends on -- what is your situation? What are your needs? How much money do you want (or not want) to spend? Where do you live? Etc., etc.

Search the web, do research, talk to knowledgeable people, pay your money, take your choice, and cross your fingers.

Engrave the lower before you send in the paperwork.

That way, if the engraver botches the job, you're not stuck with a botched SBR for the rest of your life.

You laugh, but I've read at least one instance of that happening already. The engraver botches the $20 engraving job and now the guy has $400 invested in his now-ugly SBR lower. Same if you have to ship it to get the work done. Much better to risk a $150 Title I lower than a $350 Title II lower in transit.

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Originally Posted by mtk

Much better to risk a $150 Title I lower than a $350 Title II lower in transit.

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This is a valid point. Although I'd find a local engraver in either case. If you check ARFcom's hometown forum for your state you can probably find a guy locally.

Once you're app is approved, you are really limited on which engravers you can send it to because it is legally an NFA weapon upon approval.

Find a CNC shop nearby. That's who did mine. Walked in, got it done, out in 30 minutes. They'll do it on a blank to make sure it's right.

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Originally Posted by Argus

Chief, if you're willing to wade over into TOS, there is a long stickied thread there in the general NFA forum regarding Trusts. On page 13 (of 53 currently), a user named SWATH has posted images of the trust document that he used (generated using WillMaker and revised after consulting an attorney).

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New guy here and interested in learning more about this subject. Can you tell me where TOS is?

Thanks.

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Originally Posted by A_Med

New guy here and interested in learning more about this subject. Can you tell me where TOS is?

Thanks.

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ar15.com

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Originally Posted by markm

ar15.com

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That's what I thought but I wasn't sure what the acronym TOS actually stood for. I'm sure it's not flattering :-)

Thanks.

No... I just means The Other Site.

Speaking as an attorney, please use an attorney. People work hard to learn how to properly set up trusts and corporations, not to mention how to comply with local, state and federal firearms laws - it's complicated and there are issues to consider that premade forms can't help you with. If you have problems finding an attorney with firearms experience in state, call one out of state - they're on the internet - and see if he has a recommendation for you.

To steal a wise saying from someone else, if you're balking at the cost of hiring a lawyer to set up your NFA trust you might want to reconsider NFA as a hobby.

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Originally Posted by aful

Speaking as an attorney, please use an attorney. People work hard to learn how to properly set up trusts and corporations, not to mention how to comply with local, state and federal firearms laws - it's complicated and there are issues to consider that premade forms can't help you with. If you have problems finding an attorney with firearms experience in state, call one out of state - they're on the internet - and see if he has a recommendation for you.

To steal a wise saying from someone else, if you're balking at the cost of hiring a lawyer to set up your NFA trust you might want to reconsider NFA as a hobby.

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Nothing personal, but I have to say I've used attorneys for several situations over the years and I've always felt robbed when its over and I've paid hundreds for a piece of paper I could have drafted myself. I feel pretty strongly that an educated person could put a trust together with a little research. There is nothing secret about any of the laws governing this process.

Now I will say, if this document required processing through the courts then I would agree that a lawyer would be wise because that system is a disaster for a citizen to navigate. Designed that way I believe to keep attorneys employed :D

My rule of thumb has been if its something that doesn't involve the courts and an attorney is willing to do it for a few hundred dollars, then its probably something you could easily do yourself or they would charge a hell of a lot more since they had you by the cojones.

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Originally Posted by A_Med

Nothing personal , but I have to say I've used attorneys for several situations over the years and I've always felt robbed when its over and I've paid hundreds for a piece of paper I could have drafted myself. I feel pretty strongly that an educated person could put a trust together with a little research. There is nothing secret about any of the laws governing this process...

My rule of thumb has been if its something that doesn't involve the courts and an attorney is willing to do it for a few hundred dollars, then its probably something you could easily do yourself or they would charge a hell of a lot more since they had you by the cojones.

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No offense taken, I've heard it all before. I'm sorry you've had bad experiences in the past. I apologize if this is off-topic, but it bears remembering that "not secret" doesn't equal uncomplicated, easy, or no consequences for an innocent oversight. Just my 2 cents.

There are two main reasons for getting a lawyer: 1) to help you in the courtroom, and 2) to stay out of the courtroom in the first place. I'm an educated person fully capable of complicated legal research and before I fool around with an NFA firearm I will pay for expert assistance for reason no. 2.

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Originally Posted by aful

No offense taken, I've heard it all before. I'm sorry you've had bad experiences in the past. I apologize if this is off-topic, but it bears remembering that "not secret" doesn't equal uncomplicated, easy, or no consequences for an innocent oversight. Just my 2 cents.

There are two main reasons for getting a lawyer: 1) to help you in the courtroom, and 2) to stay out of the courtroom in the first place. I'm an educated person fully capable of complicated legal research and before I fool around with an NFA firearm I will pay for expert assistance for reason no. 2.

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Sounds like good reasoning to me and I respect your position.

In terms of legality will-maker is good for Georgia. My lawyer friends said that my trust would hold up just fine. Also have to second the have the engraving done first before you submit paperwork. My friend lost his in the mail after sending it off to get a duracoat/engraving job. Thankfully it all worked out in the end but it could have been a $500 mistake. Just make sure you insure it too if you have already sent the paperwork off. Mine didn't go off till the lower was back in my safe and I didn't even start the upper till the stamp was in the safety deposit box. Better safe than sorry has always served me well.

-Goober