After 41F, what are the benefits of an NFA Trust if no one else is on it?

[kaltesherz]

I've noticed that people who filed as Individuals on their Form 1's have them back months quicker than mine (filed under a Trust), as I have no one else on mine is there any reason not to file as an individual in the future?

[Hero]

I'm the only one on my trust and am currently waiting on forms that are taking much longer than those filed as individuals. I still like the benefit of being able to have successor trustees and the ability to add trustees later without an additional background check. I think of it as an estate planning tool, currently at the cost of being noticeably slower.

[JoshNC]

Estate planning. However I think a corp or llc is actually better in this regard and several others. You can sell a corp/LLC without a transfer taking place. Corps and LLCs are well established business entities. The 1934 NFA was essentially written to protect corp/LLC Title-2 firearm ownership, while burgeoning the individual. If estate planning is your goal, I strongly recommend that you consult with a good estate planning attorney.

[Bret]

For an individual I can't see the logic of putting NFA items in a trust while not putting non-NFA items in the same trust. You have to estate plan for both. Don't forget that NFA items transfer to family members tax free.

[peruna]

My trust name is substantially shorter than my actual legal name, so that's why I will continue to use it.

[longshot2000]

For an individual I can't see the logic of putting NFA items in a trust while not putting non-NFA items in the same trust. You have to estate plan for both. Don't forget that NFA items transfer to family members tax free.

I am not your lawyer, but that is not correct, according to my gun attorney. I am advised that if you legally own an NFA item, when you pass away, your heirs cannot legally own the item, and technically in violation of the law having in their home.

[Bret]

Ask him for more details. It can't simply be given to them, but they can have it after the tax free transfer is approved. It's no different than if you sold it to someone else except that they're not paying for it and there's no $200 transfer tax.

[Spooky130]

I am not your lawyer, but that is not correct, according to my gun attorney. I am advised that if you legally own an NFA item, when you pass away, your heirs cannot legally own the item, and technically in violation of the law having in their home.

Having a trust and putting them on it would alleviate this concern as well.

Trusts were really about getting your paperwork approved in jurisdictions where the CLEO wouldn't sign. Since they are only notified now, it does remove some of the appeal.

I personally like mine since I'm in the military - if I move to a prohibited area I can leave them legally with someone else on the trust.

[Jer]

I am not your lawyer, but that is not correct, according to my gun attorney. I am advised that if you legally own an NFA item, when you pass away, your heirs cannot legally own the item, and technically in violation of the law having in their home.

No need to state you're not a lawyer because what you're saying is factually incorrect. Should you pass away, a simple Form 5 can be completed to transfer your NFA items, tax-free, to your heir once they pass a background check. The form can be found here: Form 5 @ atf.gov

This is one of the things that irked be about the Trust craze as lawyers we spreading misinformation to scare people into thinking that if you wanted NFA items you basically had to complete a Trust or bad things would happen.

Can bad things happen? Yep. Having a Trust doesn't mean they can't either though.

For me, I own many NFA items and if I stop drawing breath my wife knows to complete a Form 5 and all of my NFA items will then be transferred to her w/o costing her a thin dime of our savings.

[Bret]

This is one of the things that irked be about the Trust craze as lawyers we spreading misinformation to scare people into thinking that if you wanted NFA items you basically had to complete a Trust or bad things would happen.

Exactly. I have a coworker who was convinced by others that once 41F went in to effect you wouldn't be able to get NFA items if you didn't already have a trust setup. These are people that sell NFA items and should have known better. It took some effort, but I finally educated him that it would actually be easier for him to file as an individual because there would no longer be a CLEO signoff requirement.

The primary reason for having NFA items in a trust, to get around a CLEO that wouldn't sign, is now gone. As Spooky130 pointed out though, there still are a few reasons that someone might still want to have one.