The trust is set up under Federal laws so unless there's a local ordinance prohibiting the ownership of the weapon, you should be good to go.
This is not correct. To my knowledge, there are no federal laws governing the establishment of trusts - if someone thinks I'm wrong, I'd like to know the name of that federal law. Each state has its own laws on trusts. Also, don't confuse IRS regs, rulings, etc. governing taxes as "federal law on trusts". It's not - all the IRS cares about is what they can tax.
Also, it's generally State law that can prohibit the ownership of full auto guns. I've never seen any local ordinances restricting ownership of full auto guns, but some may very well exist.
Each state has a section of laws specifying what is a valid trust in that state. Many states have similar or somewhat uniform requirements as to the validity of a trust. But, when you move from one state to another, it's a good idea to have a knowledgable lawyer in the state you are moving to glance over your trust to make sure that it is valid in that state.
Personally, I think that those folks that are using computer generated trusts just to get around the CLEO sign-off requirements are playing with fire. If you can get a CLEO sign-off - avoid using a trust. Now, I'm
NOT saying that I wouldn't use a trust,
IF it was the only way for me to own a machinegun due to a lame-brained CLEO who won't sign off - I probably would. But, I'd set up a trust that was state-specific to where I lived and I would make sure that I have other stuff other than just one machinegun (or silencer) in that trust. That way it wouldn't be so easy for my state to pass a law simply declaring all trusts set up for holding NFA items invalid - mine would be harder to disqualify because it was done for legitimate estate planning reasons.
The bottom line is this - if it's too easy, it ain't gonna last. Eventually the government finds a way to make it make things more difficult...the IRS is an expert at this.