SBR questions...

[Argus]

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...

[DrBaker]

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

[Army Chief]

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

[rob_s]

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 .

[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.

[CleverNickname]

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.

[markm]

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.

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.

[exkc135driver]

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

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.)

[Iraqgunz]

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.

[dbrowne1]

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.

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.