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Thread: Revocable Trust and Texas

  1. #11
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    Quote Originally Posted by Iraqgunz View Post
    cd,

    Thanks for the info. If possible I would love to see some links to the information that you found. In my particular situation the trust is very similar to "our" name so I am unsure as to how they could find that questionable. I would also think that BATFE would pass along such information to examiners and that they would just deny someones paperwork.

    Was the FFL that you referred to involved in something pertaining to a trust or did it have to do with his FFL in general? Regardless, I think that it shows even if you do everything 100% if their perception is otherwise they can still "come after you".

    I paid cash for my most recent purchase but I don't see it being an issue since I got that all important bill of sale/receipt from the business.
    I don't really have any links to the info as it all came through direct conversation with the attorneys. I can tell you that the firearms attorneys all said that the name of the trust does not matter with one caveat from the firearms law specialists. They said to make sure that you do not include anything in the name of the Trust that makes reference to the NFA or ATF and that the name making reference to firearms in any way was also not recommended. The rational for this had to do with the theory that ATF could, at some point decide (or be told to decide) that Trusts like this that are done to avoid having a CLEO signoff violate the "spirit" of the exemption and could be voided. The firearms attorneys cited something similar that happened in the early '90s as an example of the possibility but I honestly can't remember the example now.

    The attorney also said that they had several clients who insisted on putting some type of NFA or firearm reference in the Trust name have their paperwork rejected by ATF. When ATF was questioned by the attorneys, this reference was cited as the reason for denial. Interestingly enough she did tell me that for every Trust they had rejected like this, they had another go through. What can you say, the ATF is the ATF. They now just make sure there are no references in the Trust name just for safety's sake. Conversely, you can have references to the NFA and firearms all through the Trust document itself as it is only the name that seems to cause problems.

    The use of a special Trust bank account to make purchases is one more CYA from the attorneys. Mine did say that if I absolutely had to pay cash for something to make sure that all of the sale documentation lists the Trust as the buyer. Referencing a Trustee's name as acting as the representative of the Trust is OK as long as the way it is written leaves no doubt that the Trust is the purchaser. My attorney also said it would be best if I could show a withdrawal from my Trust's bank account for the cash before the date the purchase occurred.

    All of this is just an attempt to avoid any semblence of impropriety in your actions or records in the rare instance that the ATF decides to take a closer look at something you have, or they think you have, done. I have also talked these issues over with a friend's wife who is an FBI Special Agent who has done some joint task force work with the ATF. Her comment was that while the ATF examiners she had worked with seemed to be good people, some of the ATF investigators were "a little overzealous".

    Take all of this in whatever way you wish. Considering how much money I have/will have invested in NFA items, I personally will do whatever the experts tell me to do so that I can avoid any issues with the ATF.

    As to the FFL, it did not involve a Trust. He is a regular Class 1 dealer. As I understand it, he sold several guns (I think it was between 10-15) to a "security company" based on responding to a request for bid that they provided him. Unfortunately the "security company" didn't exist even though everything looked legit and they paid with a company check which cleared just fine. Long story short, the guns ended up in the hands of some people they shouldn't have and the ATF basically accused him of knowingly making a straw man sale in quantity. I just used this as an example of the kind of hell that ATF can put you through if they think you have done something wrong.

    Let me know if there are any others questions I can answer.

    Stay safe over there.

  2. #12
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    Quote Originally Posted by cdmiller View Post
    Unfortunately I do not. I know he mentioned calling some people he knows after doing a "search" (which normally means the subscription Lexis/Nexis legal database but I don''t know for sure). I do know the calls were to friends in the Justice Department but past that I couldn't tell you. He has lots of government contacts and has twice (that I know of) turned down an Undersecretary position at Commerce (it only pays about 1/4 what he makes in the private sector). I tried to get in touch with him but he is overseas on a negotiation and I haven't heard back from him yet.
    That's why I'm asking. I have Lexis (and other tools) and I don't see anything like that. The only credible stories I have seen involve situations where the trust itself is flawed in really obvious ways, such as the grantor naming himself as both beneficiary and trustee, or not dating the trust, etc. and then ATF comes knocking but will let you "fix" it. Or they just won't approve the transfer if the examiner catches it.

    The legal fiction behind putting the money into an account in the name of the trust, then using that money to buy the NFA gun, does make sense on some level but I just doubt that anyone cares, or that the government could realistically make a distinction between my paying for an item as grantor or trustee and directing its transfer into trust, versus my transferring the purchase money into trust then buying it via trust money. If I am both the grantor and the trustee, who is to say that I didn't hand the money from my "grantor" hand to my "trustee" hand, then have my grantor brain cell tell my trustee brain cell to invest the money in an NFA asset? At that point, the money has been put in trust, if only for a moment, and then the trustee has invested it according to the direction of the grantor. I guess if you wanted, you could write something up stating that you did that.

    You'd also need to keep up with your trust accounting if you did it this way, which adds another layer of recordkeeping. If you individually pay for something and through doing that, cause its transfer to the trust (via a Form 4) without ever actually having it, did you ever really own it? Was it ever actually "transferred" to you, individually, if you never even saw it until it got transferred to the trust?

    Presumably the theory is that if "you" pay for it, then it gets transferred to the trust, then "you" actually owned if first (illegally) and it should have been transferred to you, then from you to the trust. I don't disagree with doing the trust account stuff, but it may be overkill.
    Last edited by dbrowne1; 07-02-09 at 07:19.

  3. #13
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    Quote Originally Posted by cdmiller View Post
    They said to make sure that you do not include anything in the name of the Trust that makes reference to the NFA or ATF and that the name making reference to firearms in any way was also not recommended. The rational for this had to do with the theory that ATF could, at some point decide (or be told to decide) that Trusts like this that are done to avoid having a CLEO signoff violate the "spirit" of the exemption and could be voided. The firearms attorneys cited something similar that happened in the early '90s as an example of the possibility but I honestly can't remember the example now.

    The attorney also said that they had several clients who insisted on putting some type of NFA or firearm reference in the Trust name have their paperwork rejected by ATF.
    I'd really like more information on this as well. I've never heard of a trust being rejected or even questioned just because of its name, and I've seen several with "NFA" in the name.

    The use of a special Trust bank account to make purchases is one more CYA from the attorneys. Mine did say that if I absolutely had to pay cash for something to make sure that all of the sale documentation lists the Trust as the buyer.
    I agree with this general sentiment - all the paper you have, and your position at all points in the process, is that the NFA item is being transferred/sold to the trust - not to you.

  4. #14
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    Sorry for the delay in responding. I've been down ill.

    All I can do is pass on what the attorneys who are subject matter experts in the area have told me. I am one of those people who believes an ounce of prevention is much better than a pound of cure so I will continue to follow the advice given to me by the attorneys. If they are wrong, that in itself is an affirmative defense. Which, by the way, was one of the reasons my friend the attorney wanted me to use an attorney who specializes in firearms law.

  5. #15
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    How much more expense are you seeing by going the trust route?? I see more guys doing that as well down this was and have heard about $100+ for the docs.

    For me, it is just easier to go down and chat with the Sherrif I have known for years and get a sign off.

    I haven't done an nfa item in years & the last one went through pretty quick +/-5 weeks. Does the trust delay the back ground check / wait times or is that a non issue??
    "You cannot invade the mainland United States. There would be a rifle behind each blade of grass."
    Japanese Admiral Yamamoto, 1941




    "A wise man's heart directs him toward the right, but a foolish man's heart directs him toward the left."
    Ecclesiastes 10:2:

  6. #16
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    Quote Originally Posted by cdmiller View Post
    I am one of those people who believes an ounce of prevention is much better than a pound of cure so I will continue to follow the advice given to me by the attorneys. If they are wrong, that in itself is an affirmative defense. Which, by the way, was one of the reasons my friend the attorney wanted me to use an attorney who specializes in firearms law.
    If your lawyer gives you shitty advice and you follow it, and then you get in trouble - your reliance on advice of counsel is not an affirmative defense to anything. You can sue him for malpractice. That's your only recourse.

    Not saying you got shitty advice on any of this, just saying the fact that you used an attorney isn't an affirmative defense.

  7. #17
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    Quote Originally Posted by Artos View Post
    How much more expense are you seeing by going the trust route?? I see more guys doing that as well down this was and have heard about $100+ for the docs.

    For me, it is just easier to go down and chat with the Sherrif I have known for years and get a sign off.

    I haven't done an nfa item in years & the last one went through pretty quick +/-5 weeks. Does the trust delay the back ground check / wait times or is that a non issue??
    No extra time that I can tell compared to how long other people report it is taking.

    I did the trust route for one reason and one reason only: I live in Harris County, TX (read Metro Houston) and even the new poor-gun DA much less the anti-gun sheriif will sign of on NFA paperwork. For them it does not matter who you are or any other factors, it is "policy" to NOT sign so the only way to legally purchase an NFA item and live in the county is to go the Trust or corporation route and the corp route makes no sense legally or financially unless you are actually a corporation that will use the items as part of its ongoing business.

    Believe me I wish that I could have gotten the new DA to sign off but so far I know of no one who has had any luck getting the "policy" changed. From what I have heard, the old sheriff who was reasonably pro-gun (but not as much so as the new DA) did not even sign off to let his own deputies purchase NFA items.

  8. #18
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    Quote Originally Posted by dbrowne1 View Post
    If your lawyer gives you shitty advice and you follow it, and then you get in trouble - your reliance on advice of counsel is not an affirmative defense to anything. You can sue him for malpractice. That's your only recourse.

    Not saying you got shitty advice on any of this, just saying the fact that you used an attorney isn't an affirmative defense.
    Sorry, sick and tired had me use the wrong terminology. Affrimatice defense is definitely not the correct phrase I was going for but I can't remember the correct legal phrase since I am not an attorney and my attorney friend explained it to me over a year ago.

  9. #19
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    Quote Originally Posted by adh View Post
    I was going to pull the trust document to give that wording to someone else and can provide same to you. Makes any future NFA purchase that much easier because there will be no changes to the trust document.
    Could you provide this here for all of us to benefit from? Thanks.

    Quote Originally Posted by cdmiller View Post
    1. The Trust MUST be the purchaser of all items. (There is a way around this for preexisting items by use of a legal document to officially transfer ownership to the Trust.)
    Can you shed any light on this document? I am anticipating a move to a different State and will need to move my NFA items owned by my LLC either to another LLC in that State, or, preferably, to a trust. If there is a better way to do it than having to pay for new tax stamps, I'm interested. Thanks.

  10. #20
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    Quote Originally Posted by usmc51 View Post
    I am anticipating a move to a different State and will need to move my NFA items owned by my LLC either to another LLC in that State, or, preferably, to a trust. If there is a better way to do it than having to pay for new tax stamps, I'm interested. Thanks.
    Why couldn't your existing LLC continue to own them? At most you might have to register the LLC with the state corporation commission in your new state (as well as maintain it in the old state). No reason why you can't register to "do business" and have a new "principal office" in a different state.

    This could mean paying two annual fees, so do the math and see, depending on how many items you have, the cost of this versus the stamps to transfer them to a new entity.

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