Estate Planning

NFA Trust and Purchase of Class 3 Items

By David M. Goldman

If you live in a Jacksonville or another city in Florida where the Chief law Enforcement Officer (CLEO) will not or easily sign a Form 4, there are several solutions.
Class 3 Weapons include suppressors, , short barrel rifles, machine guns, and other destructive devices.

The most common solution is to create a NFA revocable trust to hold title to the firearm or class 3 items.

A NFA Gun Trust, Class 3 Firearms Trust, Florida Limited Liability Company, or Florida Corporation is a legal entity established under state law. For NFA purposes many individuals prefer the a Revocable Trust over a corporation or LLC because the cost is far less on an ongoing basis. Business entities typically have state filing fees of around $150 a year. In addition there are the costs of tax preparation, compliance and filings with the IRS. In Florida and many other states Revocable Trusts like the NFA or Firearms trust do not require any disclosure or public filings. This means the ownership, control, and management is private.

Although most Florida Revocable or Living Trusts can hold firearms or other class 3 items, many are not properly setup to deal with the issues involving firearms and other items which are regulated by the National Firearms Act (NFA). If the NFA is violated, the people in possession, and who transferred the items are subject to criminal charges, substantial fines, and forfeiture of not only the class 3 items in question but all firearms in the possession or ownership. ($250,000 penalty, 10 years in prison, and forfeiture of items)

The gun or firearms trust must give the Trustee instructions and special powers so that they can legally manage for unplanned events. Weapons and other assets in a Firearms Trust can not be distributed like other assets upon the death or incapacity of the person who placed the items in the trust(The Grantor or Settlor).

There are many advantages to a firearms trust, if you own or plan to purchase a class 3 items you should contact a lawyer who is familiar with these issues and can design a trust to protect you and your family from liability. If you are in Florida you can contact me and if you are in another state I would be happy to get you in touch with a lawyer in your state who can provide information on Gun Trusts.

Full post as published by Florida Estate Planning Lawyer Blog on January 05, 2008 (boomark / email).