Switching current NFA items to a trust

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  • zoglog

    Expert
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    55   0   0
    Sep 20, 2009
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    Hendricks Co
    I never knew these items would be so much fun. I figured I could just own one and it would be ok. So I did not think that I would need a trust. Then I got another. Like usual, I like to buy high and sell low. So I am interested in getting a trust set up. Especially since I have a child now and would like to make it easier for him to inherit these in the future.

    I think I really only have one question.

    How does the new trust name get engraved on an SBR if my name is already on there?
     

    wsenefeld

    Master
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    69   0   0
    Dec 2, 2011
    2,187
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    Boone Co.
    You fill out a Form 1 when making a NEW firearm. You should have already put your name/city/state on it. Being that the firearm is already made, it would transfer to your trust on a Form 4 and not need engraved again.
     

    CountryBoy19

    Grandmaster
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    11   1   0
    Nov 10, 2008
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    Bedford, IN
    Excellent. Thanks!

    FWIW, that transfer is NOT tax-free; you will have to pay the $200/item all over again.

    The inheritance of your items isn't anymore complicated with individual ownership than with a trust. The only major difference is that if your son is not the legal heir to your items then you would have to include the items you want to go specifically to him in a Will. And of course the fact that your son (if 18) can have access to them now if they are on a trust would be a big benefit as well.
     

    ryknoll3

    Master
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    3   1   0
    Sep 7, 2009
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    ^This. Unless you need others to have access to your stuff while you're still alive, leave the current stuff registered in your name and Form a trust for the new stuff.
     

    bigus_D

    Master
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    2   0   0
    Dec 5, 2008
    2,063
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    Country Side
    How does inheritance work for NFA items NOT in a trust?

    Seems to me like, when in a trust, inheritance is basically not applicable. How could it be any easier than that?

    note: I've been thinking the same thing about setting up trust for any future purchases, but thought it would be good to include info with my papers about how to transfer in case I'm gone.
     

    KJQ6945

    Grandmaster
    Site Supporter
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    4   0   0
    Aug 5, 2012
    37,538
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    Texas
    How does inheritance work for NFA items NOT in a trust?

    Seems to me like, when in a trust, inheritance is basically not applicable. How could it be any easier than that?

    note: I've been thinking the same thing about setting up trust for any future purchases, but thought it would be good to include info with my papers about how to transfer in case I'm gone.

    Individually owned NFA items transfer tax free on a form 5 to your heirs.
     

    CountryBoy19

    Grandmaster
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    11   1   0
    Nov 10, 2008
    8,412
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    Bedford, IN
    Individually owned NFA items transfer tax free on a form 5 to your heirs.

    Correct, unless there is a will with specific guidelines they transfer tax free on a form 5 to your legal heirs. IMHO, I would always make sure it's spelled out clearly what you want to happen. If you want somebody other than a legal heir to get the items it needs to be spelled out clearly in your will to save them from having to do additional transfers and incur extra costs. IE, you want your nephew to have your NFA items but your wife would be legal heir, items will transfer on a form 5 tax free, then she would have to transfer to him on a tax-paid form 4, unless you had it spelled out in your will, then they can transfer to your nephew on the form 5. FWIW, I'm not 100% certain, this is just the way I understand it.

    Regarding a trust: if it's a revocable living trust then I believe the assets must be disbursed to the beneficiaries within a reasonable time after your death. They would also transfer on a tax-free form 5. FWIW, it might be best to set up a trust in your son's name and have that trust be the beneficiary of your trust; therefore upon your death your NFA items would transfer to your son's trust on a form 5 and your son could enjoy the same great benefits of a trust that you can.
     
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