09 December 2011

That NFA Trust Loophole

Expanding on this post:

I think I figured out why some people regard a trust owning an NFA firearm as a loophole.

I can, indeed, add a convicted felon prohibited person to my trust as a trustee.  I am not required by ATF to submit any paperwork about changes the trust makes to the trustees or its assigns.  The only time they see that trust is when I give them a copy along with a new Form 1 or Form 4.

Technically, this person now owns an NFA item, right?  Sort of.  The trust owns the item, the trustee is a partner in owning the trust.

But nothing about adding this person to the trust allows them to actually possess the item because of their prohibited status!

I don't know if the actual ownership issue has been tested in court, nor do I want to be the first one to try.  This is a contentious area for normal property let alone NFA items.  IANAL, so if you want a definitive answer, retain one.

I am very cautious about who I would let be a trustee, if for no other reason a trustee could clean out the gun safe, sell everything for 25¢ on the dollar, blow that on hookers and blow and I'd have no recourse against them about the loss of my stuff.  I made it our stuff by making them a trustee!

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