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Thread: Trust - Assignment of Property?

  1. #11
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    The only purpose of a sked A is to fund the trust at its creation, it is NOT a running list of trust assets(the approved form 1/4 is the proof of trust ownership)....you can fund it with what ever you want(such as a dollar bill as some have done). after that, nothing should ever be added to the sked A including the NFA weapon you are transferring.

    If you end up using that trust to collect fifty NFA stamps, the sked A should look the same for the 50th form 1/4 as it did for the first, just that dollar bill. A LOT of people treat it as an inventory and while that is not correct the NFA inspectors are not lawyers and forms have been approved both ways. FWIW, my sked A has not changed since the day the trust was notarized and I have seven stamps and counting, never had one in problem status.

  2. #12
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    Quote Originally Posted by 1qsb28 View Post
    The only purpose of a sked A is to fund the trust at its creation, it is NOT a running list of trust assets(the approved form 1/4 is the proof of trust ownership)....you can fund it with what ever you want(such as a dollar bill as some have done). after that, nothing should ever be added to the sked A including the NFA weapon you are transferring.

    If you end up using that trust to collect fifty NFA stamps, the sked A should look the same for the 50th form 1/4 as it did for the first, just that dollar bill. A LOT of people treat it as an inventory and while that is not correct the NFA inspectors are not lawyers and forms have been approved both ways. FWIW, my sked A has not changed since the day the trust was notarized and I have seven stamps and counting, never had one in problem status.
    I guess the bigger question is why would you not want to list the firearms within Schedule A?

    If you have a Schedule A with a dollar bill attached to it, you are saying that the ownly item held within the trust is one dollar. Clearly the purpose of the Schedule A is to assign your property (firearms) to the trust.

  3. #13
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    Quote Originally Posted by flynnstone View Post
    I guess the bigger question is why would you not want to list the firearms within Schedule A?
    because its not anyone's business to see a complete list of weapons my trust owns.

    Quote Originally Posted by flynnstone View Post
    If you have a Schedule A with a dollar bill attached to it, you are saying that the ownly item held within the trust is one dollar. Clearly the purpose of the Schedule A is to assign your property (firearms) to the trust.
    Clearly??? ...there is massive misinformation being put out on gun forums regarding this. If you consult an attorney or study the actual trust law you will find that the Schedule A is NOT a legal document, has NO legal authority and CANNOT transfer title of property to the trust by its self. It an "informational" document added to assist successor trusties to determine property owned by the trust, but is not all inclusive. To legally transfer property to a trust you should still have a bill of sale or transfer of title(this is your approved form 4).

    The misconception that the trust must have a schedule A at all is perpetuated by the ATFs misunderstanding of funding a trust. So while it is not a legal document or legally required, if the ATF wants to see one you need to attach one...but you do NOT need to give them a list of all your toys on it..just the one dollar bill.

    To say the trust only owns what is on the schedule a (a dollar bill) is incorrect. to the contrary the trust should spell out that it owns anything that has been transferred to it during its lifetime irrelevant of what is listed on the sked A which is strictly informational.

    but please dont take my word for it...a quick search on even legal zoom or guntrustlawer will point this out, or retain the services of a lawyer...
    Last edited by 1qsb28; 09-18-12 at 19:29.

  4. #14
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    Quote Originally Posted by flynnstone View Post
    I guess the bigger question is why would you not want to list the firearms within Schedule A?

    If you have a Schedule A with a dollar bill attached to it, you are saying that the ownly item held within the trust is one dollar. Clearly the purpose of the Schedule A is to assign your property (firearms) to the trust.
    Not so.* Understand that trusts vary by state law, but generally speaking Schedule A to a trust will not contain an exhaustive list of trust assets. Otherwise everytime you add an asset to the trust you would be amending it... You can have a separate document with an assignment, bill of sale, BATFE paperwork, what have you that states that the asset has been transferred into the trust.

    Understand further that a trust is generally used as an estate-planning tool and not as a work-around for asinine firearms laws. So to a degree the usual way of doing things, such as not listing your assets in the Schedule A, may or may not be applicable. I personally list my trust assets in Schedule A, because why not. But in my state -and again, refer to your state's law - it isn't mandatory.

    There is a lot of confusion about how NFA trusts work and the best practices that should be followed when dealing with them. IMO this is due to, among other things, attorneys without substantial trust and estate experience getting into the NFA trust game, an order of magnitude more of laymen drawing up trusts for themselves without having the first idea about what they are doing, and general confusion about the NFA and BATFE regulations, which nobody really understands.

    One common misconception is that the trust owns the items subject to the trust. Not so. While the NFA treats a trust like an independent entity such as a corporation or LLC, it is not. A trust is just a relationship between a grantor (settlor), a trustee, and a beneficiary wherein the grantor gives away their full interest in property, and the trustee owns the legal interest in the property on behalf of the beneficiary, who owns the equitable interest in the property. In other words, the trustee holds legal title to the propery on behalf of the beneficiary, and owes the beneficiary a fiduciary duty to, among other things, preserve the value of the property held. A common error is to create a trust where the trustee and beneficiary are the same person. In some states, the effect of this is to create no trust - since the legal and equitable interest in the property is owned by one individual, no trust can exist. This is a trap for the unwary...

    *I am not your attorney and am not providing legal advice. Refer to federal and applicable state laws and seek counsel from a competent attorney in your state if you have state-specific trust related questions.

  5. #15
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    Quote Originally Posted by 1qsb28 View Post
    because its not anyone's business to see a complete list of weapons my trust owns.



    Clearly??? ...there is massive misinformation being put out on gun forums regarding this. If you consult an attorney or study the actual trust law you will find that the Schedule A is NOT a legal document, has NO legal authority and CANNOT transfer title of property to the trust by its self. It an "informational" document added to assist successor trusties to determine property owned by the trust, but is not all inclusive. To legally transfer property to a trust you should still have a bill of sale or transfer of title(this is your approved form 4).

    The misconception that the trust must have a schedule A at all is perpetuated by the ATFs misunderstanding of funding a trust. So while it is not a legal document or legally required, if the ATF wants to see one you need to attach one...but you do NOT need to give them a list of all your toys on it..just the one dollar bill.

    To say the trust only owns what is on the schedule a (a dollar bill) is incorrect. to the contrary the trust should spell out that it owns anything that has been transferred to it during its lifetime irrelevant of what is listed on the sked A which is strictly informational.

    but please dont take my word for it...a quick search on even legal zoom or guntrustlawer will point this out, or retain the services of a lawyer...
    Maybe i shouldn't have said 'Clearly' I understand there is a vast amount of inaccurate information on the web, and i'm just trying to determine the proper way to get structure the trust.

    Thanks for the info

  6. #16
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    Quote Originally Posted by 1qsb28 View Post
    because its not anyone's business to see a complete list of weapons my trust owns.

    ... you will find that the Schedule A is NOT a legal document, has NO legal authority and CANNOT transfer title of property to the trust by its self. It an "informational" document added to assist successor trusties to determine property owned by the trust, but is not all inclusive. To legally transfer property to a trust you should still have a bill of sale or transfer of title(this is your approved form 4).
    Interesting. I'm having this exact same debate over on NFATalk and the general consensus there (opposed to my understanding of trust law in my state) is that you should populate your Schedule A with everything held by the trust and submit it every time you do a transfer or make an SBR. 1qsb28 you are correct that unless your trust specifically states that there will be a Schedule A attached to the trust or your state requires it, it is an optional Schedule document and not required. And, I agree that it is nobody's business what items are held by the trust including the BATFE. If they want to know, they can look it up. That's what accurate record keeping and computer databases are for, they should not be relying on my trust document's Schedule A.

    But, to transfer an item into a trust, I believe generally, that you have to have (fill one out) an Assignment of Property, and that the Form1 or Form4 itself is not a proper transfer. At least that is the law in my state and has been my understanding that that general rule holds true... in most places (I was going to say "everywhere" but that is too broad of a statement).
    Last edited by Mr.Maim; 09-19-12 at 21:09.

  7. #17
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    The above post is my understanding as well, as it applies here in Virginia, based on the guidance and recommendation of the lawyer I consulted to set up my trust. I do not send an Assignment of Trust with my form 4, but wait for the approval and receipt of the tax stamp, and then fill out and sign/notarize the assignment, and send it to the NFA branch. In this interpretation, the item is not property which can be assigned to the trust until the transfer is complete, and the transfer form is not, in itself, an assignment of property.

    I hear/read many accounts of people successfully transferring NFA items to trusts, often without consideration for this detail. I don't know that it will ever be truly necessary - as I understand it, this may be a gray area which is subject to interpretation, depending on circumstances. Something which could become an issue if scrutinized may very well never be noticed or challenged.

    ETA - I forgot to mention, whether you submit the assignment to the ATF is another issue. I won't comment on that one.
    Last edited by everyusernametaken; 09-19-12 at 23:40.

  8. #18
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    The only item listed in my Schedule A is a $10.00 bill to fund the trust. Proof of ownership are my stamps. Simple.

    O

  9. #19
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    Quote Originally Posted by oef24 View Post
    The only item listed in my Schedule A is a $10.00 bill to fund the trust. Proof of ownership are my stamps. Simple.

    O
    Regardless of whether you send the assignment to the ATF, the assignment is still the legal instrument that associates the property with the trust. The stamp does not serve that purpose.

  10. #20
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    Nothing wrong with listing the receiver before you have the Form back.

    My Attorney has two SBR's listed on my Inventory List that I haven't received Forms back from the BATFE yet. I know the Serial #'s, so he advised to list them now.

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