Originally Posted by
kry226
It's essentially a RLT. But I think some lawyers who are also Title II/Class 3 nuts have gotten together over time and added some language to the traditional RLT versions regarding NFA stuff.
I have completed a WillMaker 2010 RLT, but haven't signed or executed it yet, and so my opinions come from putting this type of trust together. I think the biggest concern is ensuring the trust doesn't tell the trustees/successor trustee(s) to do anything that would violate the NFA in regards to dividing the assets among the beneficiaries. This could invalidate the trust, thus invalidating the transfer. Bad.
There are also implications when moving the assets to beneficiaries who are minors (our kids) after both trustees (my wife and me) pass away. What I understand is you have two options (in Texas at least):
1. Property can be put into a custodianship, but I believe this changes the ownership of the NFA item and is subject to another $200 transfer tax. BAD.
2. Property goes into a child's subtrust under the original trust and can remain there until the child is 35 years old. No ownership change has occurred.
Also, many trusts treat the property as investments, and therefore using (shooting) the NFA items may cause them to depreciate, which may violate or invalidate the trust.
In the big scheme of things, and assuming the WillMaker trust is valid, the problems don't so much occur while you're still alive, but after you are dead, and the NFA items require disposition. You surely don't want to leave your heirs with a legal mess.
These NFA lawyers, I think, have somehow written some language that keeps the NFA items in some type of almost-perpetual trust so that no matter who the trustees are, the trust remains and still owns the NFA stuff.
If I decide to execute the Quicken RLT, I think I will just amend the trust once my kids come of legal age and make them trustees, if legal.
I am NOT a lawyer, but I have been researching this for a while, to include sitting down with an estate planning attorney just this week. YMMV, and it's important for each individual to do their own research and make the decisions they're comfortable with. At the end of the day, $400-600 for an NFA trust might be cheap insurance, considering the implications of dealing with the NFA and BATF.