The Gun Trust is a trust that is designed to protect the Settlor/Grantor
and Trustees of the trust from violations of the National Firearms Act while
ensuring that the assets that are owned by the trust are protected and
passed to the beneficiaries of the trust upon the death of the Settlor.
I have been preparing Texas gun Trusts for Many
Years and these are some of the recurring Questions that I answer on a
regular basis:
1.
Should I register the
Items regulated by the National firearms Act as an individual, a trust, an
LLC or a Corporation?
This depends on many factors, some of which include
whether a local CLEO will sign a form 1 or 4, whether you want more than one
person to have the legal capacity to posses the items regulated by the
National Firearms Act, whether you want the existence of the entity to be
private or public and many other factors that go into this decision.
2.
What are the benefits of
the Texas NFA Trust over the Corporate and individual form of ownership?
a.
No filing fee or annual fee
b.
There are NO requirements that the Trust be filed with the Secretary of
State
c.
The trust documents and the assets of the trust remain private.
d.
No CLEO signoff, no photos, no fingerprints and NO BEGGING the
government for permission to exercise your Second Amendment rights!
e.
The ability of anyone who is a trustee to be able to lawfully possess
the weapons.
3. Can
my friends and I form a Revocable living Trust and put weapons regulated by
the National firearms Act into the trust?
This is possible. However the Settlers/Grantors need
to be aware of the implications of doing this. Concerns include what
happens when the friendship ends, where the items regulated by the national
firearms act are stored and positive control of the items regulated by the
national firearms act. Each Settlor and trustee may have legal liability
for the actions of the other so this form of Trust ownership is to be
entered into with much careful consideration. I generally recommend that
each friend get their own individual Texas NFA Trust.
4.
Can I use a other self help services to create a trust?
This is possible. I have friends who have done this
and they have purchased NFA regulated items and shoot them with me. No BATF
agents have crashed their doors and shot their dogs. However, by having my
firm prepare your trust, you have a lawyer available to answer your
questions regarding the National firearms Act, I will assist you with
preparation of your National firearms Act forms and I will be there to help
you whenever you need help. Frankly, you will probably see me at major
machinegun and silencer shoots in addition to IDPA and 3 Gun matches and can
ask me questions in person when you see me. Try calling the
do-it-yourself services when you have a question about your trust or the National Firearms
Act. If a
do-it-yourself
trust is rejected by the BATFE or found to
be invalid, they will contact you and you may feel free to call and email me
immediately and I will see what I can do to correct the problem.
5.
Do I have to file a
copy of my Texas NFA Trust with the State of Texas?
No. The Texas NFA Trust does not have to be filed with
the City, County or State of Texas. The only government entity that the
trust is filed with is the BATFE when a form 1 or Form 4 is submitted.
6.
Does the Texas NFA
trust appear in Law enforcement databases and Records?
No. The Texas NFA Trust and the items that are
regulated by the National Firearms Act are private and known only to the
BATFE.
7.
Are there any annual
reports fees or franchise taxes that are due from the Texas NFA trust?
No. The state of Texas does not require the filing of
a franchise tax report or other reports to maintain the trust.
8.
Is there a benefit to
putting Title I (Non NFA) firearms into the trust?
There is no specific benefit to putting title I
firearms into a trust except for estate planning. However, a perpetual
trust may get the firearms around a California style Assault Weapons ban.
9.
I have a dealer who
has offered to draft an NFA trust for me. Is that legal or all right?
The dealer is practicing law without a license which
is a Class B Misdemeanor in the state of Texas. Further, the dealer is
accepting a lot of liability if the trust is later found to be invalid. If
the dealer is using quicken or legal zoom, see the answer to question 4.
Basically, the trust may be valid, it may not be valid, but the dealer is
accepting a lot of potential liability by doing this if the trust is later
found to be invalid.
10.
Will I be the only
person who is allowed to use the firearms and items that are regulated by
the National firearms Act?
No. The Texas NFA Trust allows you to name multiple
individuals as trustees. They can are allowed to possess and use the items
regulated by the National firearms Act.
11.
What happens if I
become incapacitated?
No, the Texas NFA Trust contains specific language to
deal with the possibility of you becoming incapacitated.
12.
Who can be the
beneficiary of the Texas NFA Trust?
Anyone, including a minor child may be a beneficiary
of the Texas NFA Trust. The Texas NFA Trust has a trustee who will manage
the trust assets until the beneficiary reached either majority or a
pre-designated age. The Texas NFA Trust is designed to protect the assets
for a minor beneficiary until the child reaches the age of eighteen or a
later date that is selected by the settler. These terms may be amended at
any time the settler wishes.
13.
Does a Texas NFA
Trust have an affect on the time the BATFE takes to process the form 1s and
form 4s for the transfer of items regulated by the National Firearms Act
Yes, usually it will shorten the registration process
because a background check does not take place.
14.
What if I live
outside of Houston and cannot meet you in your office to execute the trust?
Can you still set up an NFA trust for me?
Yes, I have created Texas NFA Trusts for Texans all
over the state from El Paso to Beaumont and Brownsville to Amarillo.
15.
Are there any
Downsides to Trust ownership? ?
The only downside is the fact that the BATFE may not
allow a tax free form 5 transfer of the item regulated by the National
Firearms Act upon the death of the settler.
16.
If I currently own
Items regulated by the National Firearms Act, may I transfer them into the
trust without paying the transfer tax?
The answer is no.
17.
May I be the only
Settlor, Trustee and Beneficiary?
The Texas NFA Trust is a revocable living trust. That
means that the founder of the trust (the Settlor) may be the life trustee
and the life beneficiary. However, the beneficiary who takes when the
settler dies should be named. A trustee of the trust may not generally also
be the beneficiary of the trust.
18.
How many people may
be a trustee on my Texas NFA Trust?
There is no limit. However, each trustee has duties
and obligations to the trust that they will have to be aware of.
19.
May I remove a
Trustee from my Texas NFA Trust?
?
The simple answer is yes. As a Settlor, the right to
remove trustees is reserved in the Texas NFA Trust.
20.
Will my Beneficiary get the assets of
the Trust when I die?
The answer is not simple. In Texas, all property is
presumed to me community property. If you put community property in a Texas
NFA Trust, your spouse may have a claim on her share of the community
property that is in the trust. This prevents fraud on the community
estate.
21.
May a beneficiary of the trust
possess the items regulated by the National firearms Act?
No, only the trustee may possess the items Regulated
by the National firearms act. The Trustee must be eighteen years of age to
possess the items regulated by the National Firearms Act. The Trustee must
be twenty one years of age to purchase items regulated by the National
firearms Act.
22.
May I amend my Texas
NFA Trust?
The general answer is yes, you may amend the Texas NFA
Trust at any time with few limitations.
23.
May I change the name
of my Texas NFA Trust?
This is generally not necessary. However, should it
become necessary, the trust, like a corporation, may change its name, the
trust may be amended to reflect a new name. This is also similar to an
individual who owns an item regulated by the National firearms Act getting
married and changing her legal name. In this case, the original trust
papers should be kept in a safe place.
24.
What should I name my
Texas NFA Trust?
You may name it anything you want. "Captain Awesome’s
Machinegun Trust" sounds great, but it is a lot to engrave on the side of an SBR. I normally recommend using your surname to keep the name of the Texas
NFA Trust short, simple and easily engravable.
25.
May a trustee live in
another state?
Yes. However, the trustee must have the proper BATFE
forms to take the items regulated by the National Firearms Act out of the
state of Texas. The BATFE form 5329.29 is the proper form for this. One
caution is that spreading items regulated by the National Firearms Act
across the country creates potential issues.
26.
What must I submit
with my form 1 or form 4 when I am transferring an item regulated by the
Nationaklfirearms Act into my Texas NFA Trust?
This is simple.
a.
A complete copy of your Texas NFA
Trust
b.
A copy of your schedule A
c.
A certificate of compliance
d.
Two copies of your form 1s or form
4s signed in blue ink
e.
A check for $200.00 made payable to
the BATFE or DOJ with the word transfer, the make, model and serial number
of the item being transferred or manufactured
f.
Send all of the above
to 244 Needy road, Martinsburg, WV 25404.
27.
Should I open a bank
account for my Texas NFA Trust?
Yes. However, if you do not, there has been no
problem. At this time, there is no limitation on who may pay the transfer
tax or pay for the item regulated by the National Firearms Act itself.
However, I have am concerned that the BATFE may decide to attack the
validity of a trust based on the co-mingling of assets. A simple work
around is to use a postal Money order to pay for the item and the transfer
tax.
28.
You told me about making a
Short Barreled Rifle (SBR). What do I have to do to mark the receiver?
If you register an existing receiver as a Short
Barreled Rifle (SBR) on a form 1, you must engrave the lower receiver with
the name of the trust and the city and state that the trust is located. The receiver must be marked with the name of the
manufacturer (the trust name), the city and the state of manufacture. The name of the trust
may not be abbreviated absent a letter granting the marking variance from
the BATFE.
a.
Name of Trust
b.
City, State
Sean Cody shooting the Larue
Tactical 3 Gun Match 2010 with his DPMS AR-15 SBR with a 12.5" DI
upper, Larue FUG, Larue SPR mount holding a US Optics SN-4 and shooting his
Benelli 1014.
