Selling NFA on a trust

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  • Hotrod29

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    Have you or would you ever add someone to your trust so they could take immediate possession of a nfa firearm while waiting for their own stamp? I have a friend that did it and it worked out fine for him.
     

    chezuki

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    Blank+_d89752fd3a54f82d28badeb53e9d27c9.jpg
     

    55fairlane

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    Hotrod, sounds like a jail term waiting to happen.....or your with the ATF looking to trip someone up....

    Don' go there.....stay 100% legal.....

    Aaron
     

    Hotrod29

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    Hotrod, sounds like a jail term waiting to happen.....or your with the ATF looking to trip someone up....

    Don' go there.....stay 100% legal.....

    Aaron

    Uh why? Anyone that is a responsible person on a trust can possess the firearms owned by the trust.
     

    Hotrod29

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    I know I'm new here so I don't want to stir a bunch of drama, but this wasn't a question of legality. I hope you guys do a little more research and see what the possibilities are when your guns are owned by a trust.

    So let me rephrase my question. Since you can amend your trust to name more responsible persons and because those responsible persons listed in the trust can legally possess firearms owned by the trust. Would you add someone to your trust who also happens to be interested in buying a firearm from you so that they can keep the firearm at their house? In the mean time they file a form 4 for said firearm to transfer ownership to their name or trust.

    I have a friend that did this and once the new stamp was approved he then amended his trust again to remove that person from the trust. The entire process was facilitated by an attorney.
     

    DanVoils

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    I know I'm new here so I don't want to stir a bunch of drama, but this wasn't a question of legality. I hope you guys do a little more research and see what the possibilities are when your guns are owned by a trust.

    So let me rephrase my question. Since you can amend your trust to name more responsible persons and because those responsible persons listed in the trust can legally possess firearms owned by the trust. Would you add someone to your trust who also happens to be interested in buying a firearm from you so that they can keep the firearm at their house? In the mean time they file a form 4 for said firearm to transfer ownership to their name or trust.

    I have a friend that did this and once the new stamp was approved he then amended his trust again to remove that person from the trust. The entire process was facilitated by an attorney.
    While it sounds legal I'm not sure if it's moral. Personally I wouldn't do it for the simple matter of what if the Form 4 isn't approved for some reason? What if it's stolen or damaged while in his possession? Will he still pay for it? I'd feel better if it was in my possession.
     

    Hotrod29

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    Fair enough. That was really the basis of my question, whether or not you would personally conduct the transaction in this manner.

    For me, I would with the stipulation that they pay up front and the form 4 be submitted within a timely manner. If disapproved they forfeit their payment and return the gun or suppressor and I would then amend my trust to remove them from it.
     

    Fargo

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    Fair enough. That was really the basis of my question, whether or not you would personally conduct the transaction in this manner.

    For me, I would with the stipulation that they pay up front and the form 4 be submitted within a timely manner. If disapproved they forfeit their payment and return the gun or suppressor and I would then amend my trust to remove them from it.
    While I don't know there is anything per se illegal about doing it that way, you are creating a huge mess as far as contract law goes. Transfer of possession prior to ability to transfer title is a huge red flag, as is any sort of liquidated damages clause. There also could be some sort of action brought to prevent you from removing them from the trust, since you have kept their money.

    Whether the BATFE would have a problem with it or not, it sounds like a very risky way of doing business.
     

    Hotrod29

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    I understand what you're saying about contract law but their is no technical legal transfer of possession until the new stamp is approved. The trust still owns it at that point and trusts are typically written in a way that gives the grantor full authority and discretion to make amendments as they see fit. I don't see how a trustee or even lesser responsible person could petition to remain on the trust against the grantor's will
     

    Beowulf

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    Yeah, I'm not sure how the ATF could have any real opinion on this one way or the other. If the NFA iteam is properly transferred to the trust and the person being added is a proper person (and in the same state), then there is no legal reason I can think of that would bar this.

    In fact, this might actually uncover a "loophole" to more or less an instantaneous transfer. Say you buy an NFA item and transfer it legally to a single use trust (so only one item on it), XYZ Trust, then the trust is the owner of the item and you, as the grantor, have control of it.

    Then, you sell it to your buddy, Jim Bob. You add Jim Bob to the Trust, promoting him to grantor and demoting yourself out of the trust and updating the address of the XYZ Trust to Jim Bob's house. XYZ Trust still owns the item and technically, neither you, nor Jim Bob, have to file any paperwork with the ATF (though, I suppose you could send them the updated copy of the trust if you wanted).

    Wow, I think we've just discovered a way to more or less cut the NFA branch completely out of the loop (after the first legal transfer from the manufacturer/dealer to the trust).

    Any INGO lawyers care to venture an (unofficial and off the books) opinion on this?
     

    Hotrod29

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    I'm not an attorney but I don't think you can name a new grantor. Only trustees, responsible persons, beneficiaries, etc. Hopefully an attorney will weigh in on that part.
     

    Hop

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    I though 41f put an end to easily adding people to a trust. Don't you now need to submit fingerprint cards & get approvals for each additional person?
     

    chezuki

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    I though 41f put an end to easily adding people to a trust. Don't you now need to submit fingerprint cards & get approvals for each additional person?

    Only when transferring the item to the trust. Once the item is on the trust, you can add and remove people all you like.


    ...yeah, it’s stupid.
     

    Bfish

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    Yeah, I'm not sure how the ATF could have any real opinion on this one way or the other. If the NFA iteam is properly transferred to the trust and the person being added is a proper person (and in the same state), then there is no legal reason I can think of that would bar this.

    In fact, this might actually uncover a "loophole" to more or less an instantaneous transfer. Say you buy an NFA item and transfer it legally to a single use trust (so only one item on it), XYZ Trust, then the trust is the owner of the item and you, as the grantor, have control of it.

    Then, you sell it to your buddy, Jim Bob. You add Jim Bob to the Trust, promoting him to grantor and demoting yourself out of the trust and updating the address of the XYZ Trust to Jim Bob's house. XYZ Trust still owns the item and technically, neither you, nor Jim Bob, have to file any paperwork with the ATF (though, I suppose you could send them the updated copy of the trust if you wanted).

    Wow, I think we've just discovered a way to more or less cut the NFA branch completely out of the loop (after the first legal transfer from the manufacturer/dealer to the trust).

    Any INGO lawyers care to venture an (unofficial and off the books) opinion on this?

    I was talking to my dealer about this exact thing when these "one shot" trust deals came out from Silencer Shop. If that was the case, the dealer could essentially file them and then have them at the ready at a higher price for people who were willing to pay more not to wait. He said he wouldn't be doing it but we were simply discussing the legalities of it. I've never talked to a lawyer about it, but it should would be kind of nice really. One time stamp and essentially no wait for things down the road.
     
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