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OP said he does not have a trust and wondered what happened to his NFA items upon death. Whether he has a will or not, the NFA items will be temporarily held by the executor or administrator of the estate until a beneficiary of the estate is determined. If there is a will, the beneficiary should be determinable from the terms of the will. If there is no will, then the beneficiary is determined by the decedent's state's intestate succession laws. The executor/administrator can then transfer the NFA items to the beneficiary of the estate via Form 5, all the same formalities of a Form 4 transfer (CLEO, photo, prints, etc.) but no $200 transfer tax. When the smoke clears, the NFA registry will show the transferred NFA item in the beneficiary of the estate's name.
You are confusing beneficiaries of an estate with beneficiaries of a trust. Wills and trusts are two separate and distinct legal instruments.
No one inherits anything from a trust. It is not an applicable or relevant action with regard to a trust. Either a grantor or creator contributes NFA items to a trust via Form 4, or a trust acquires NFA items via Form 1 or 4. Depending on the terms of the trust, the trustee(s) and beneficiary(s) of the trust can then enjoy the NFA items. If a creator/grantor in a revocable trust, or a trustee later decides to dispose of an NFA item out of the trust, the disposition is a Form 4 transfer.
Your statement would be mostly correct if revised to state that "when the will/estate is executed [or administered] the beneficiary inherits the guns, a Form 5 is completed."
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Last edited by scottryan; 05-28-15 at 13:22.
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Trusts don't have heirs. Wills and estates have heirs.
Why not use a pour over will into testamentary trust. You die and your weapons go into a trust under a form 5 theoretically. The trust is the recipient under your will. I assume that would avoid the requirement of the $200 tax stamp per item.
Could say for the benefit of your kids for life and then to grand kids upon the death of all children. Name all your kids as trustees.
Anybody tried this or know what the atf would say?
I have used this approach with client planning, but have not yet had a client die with this planning in place, so all I can give is my thoughts of what I think will happen. First, this is cleanup planning, using a properly drafted trust to acquire the NFA item is always a better choice. If my client already acquired the NFA item in their personal name, this becomes a way to try and fix a problem. I set up a trust for them while alive, then name the trust as an heir under a will. In part I base my planning on the following language from the ATF handbook:
9.5.3.1 Distributions to heirs. Although these distributions are not treated as “transfers” for
purposes of the NFA, Form 5 must be filed by an executor or administrator to register a firearm
to a lawful heir and the form must be approved by ATF prior to distribution to the heir. The
form should be filed as soon as possible. However, ATF will allow a reasonable time to arrange
for the transfer. This generally should be done before probate is closed. "When a firearm is being
transferred to an individual heir", his or her fingerprints on FBI Forms FD-258 must accompany
the transfer application.[/U] The application will be denied if the heir’s receipt or possession of the
firearm would violate Federal, State, or local law. The law enforcement certification on the form
need not be completed.
The language in the middle of the paragraph in quotes is what I am looking at, if they specify what happens with an "individual heir" by implication, there must also be "non individual heirs" or for our purposes, a trust. It makes sense and if you are worried about it working, name an individual heir as a backup if this is not allowed. Worst case, it transfers to the named heir.
Again, I see this as an attempt to fix a problem, I much prefer to use a good trust to start with and avoid all of these questions.
Good luck
Great feedback sir. Good discussion.
In some states, especially a few decades past, trusts could not outright own property as you know. Drafters of the deeds would get around that by granting the property directly to the trustee, but state that he was in a trustee status. For example - Bob, Jr., as Trustee under the Will of Bob, Sr.
I guess then the puzzle is whether Bob, Jr., would have to transfer via form 4 or 5 or no form at all, to the trust directly or to a successor or co-trustee or the beneficiary upon final dissolution. Makes my head hurt.![]()
I'm sure the atf is wondering how 41P is going to be applied to issues like this. Wonder if the atf is second guessing it's decision to inject itself into each state's jurisdiction concerning probate law.
Last edited by Conrad101st; 05-30-15 at 09:52.
With regard to the will to testamentary trust, there may be some upcoming rule making.
rule–RIN: 1140-AA43–impacts trusts that hold firearms regulated under the National Firearms Act. The rule requires trusts, corporations or legal entities possessing the guns to produce a “responsible person” who can undergo a background for guns in probate, before they are passed to a descendant. This person would “complete a specified form” and “submit photographs and fingerprints” simply to hold the guns while the estate is settled.
http://reginfo.gov/public/do/eAgenda...&RIN=1140-AA43
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