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Q: What are some of the pitfalls and disadvantages of an individual owning a NFA firearm?
The biggest issues regarding NFA gun ownership is the limitations placed on anyone transferring and possessing your guns. For instance, 1. a prohibited person may not own a NFA firearm, 2. the applicant/owner must always be in possession of the NFA weapon, 3. an individual who becomes prohibited during ownership must relinquish ownership and possession of his firearms, 4. accidental felonies can occur upon transfer or possession, and 5. improper disposal of the NFA firearms may occur at the individual's death.
Constructive possession can also put your friends and family in violation of federal law if anyone could potentially access your NFA guns. Your family is at risk even if they borrow your car and your NFA weapon happens to be inside.
Q: What are some other options to firearm ownership?
Instead of individual ownership, a legal entity such as a corporation or LLC may own firearms. Also a trust may own firearms.
Q: What are the drawbacks to legal entities?
Legal entities are required to file an operating agreement, bylaws, and/or charter with the state in order to be recognized. Additionally, entities are required to report taxes annually and pay other fees to continue to legal recognition and operation. The issue in maintaining legal entities is that many people do not operate legal entities properly and forget to pay the required fees which may lead to the dissolution of the corporation and ultimately providing an illegal transfer of the corporate owned NFA firearm. Also, a corporation cannot share corporate property with those outside of the corporation.
Q: What are the benefits of a Trust owning my NFA firearms?
Unlike a corporation or LLC, a trust does not require yearly fees to maintain. If a trust is the owner of the NFA firearm, there is no fingerprint requirement, CLEO signature, or background check. Also, multiple people can be listed on the trust as trustees or beneficiaries to use the firearms in the trust. At death the trust will provide the beneficiaries and family with privacy because the trust avoids probate.
If a trustee becomes a prohibited person, the NFA firearm will remain in the trust and continue to possess the firearms.
Q: Can I change the Trust?
The trust is very flexible and you as the Trustee may add and remove trustees and beneficiaries. You may also add and subtract property over the course of your life.
Q: How does the Gun Trust handle my NFA guns when I die?
To ensure that your guns are properly and legally handled at your death, your gun trust provides instructions and guidance pertaining to your beneficiaries. The gun trust keeps your gun collection out of probate proceedings and allows your assets to remain private.
Q: How does my gun trust protect me if I am incapacitated?
In order to protect your firearms and your family members, we will assist you in selecting a trustee who can legally take care of your firearms during your incapacity. The firearms will remain in the trust.
Q: Do I need a Class 3 license to own NFA guns?
A Class 3 license is required for a gun dealer to sell NFA firearms. If you are not a prohibited person, you can acquire an NFA firearm by submitting a form 4 to BATFE to register and obtain approval
Q: Can I transfer my already owned NFA guns into my gun trust?
Yes, any owned NFA guns can obtain the same security, protection, and benefits of the gun trust by transferring them into the trust.
Q: Do I need to acquire a separate tax I.D. number and submit separate tax filing?
You gun trust is taxed under your personal tax filing and does not require a separate tax ID number. Your firearms are unlikely to create tax issues in the gun Trust, if they do not create tax issues for you now.
More Questions? Contact us today!