In order to own an NFA item you need a Form 1 (if you're building it yourself) or Form 4 (if you're buying it from a person or a dealer) with a tax stamp affixed to show you paid your $200 transfer tax (or $5 for AOWs). Before the Form 1 or Form 4 is sent in to the BAFTE you need to get fingerprinted, photographed, and signed off by your chief law enforcement officer (often called a CLEO sign-off). However, you can bypass the CLEO sign-off requirement by purchasing the NFA item through a corporation or a revocable living trust.
A corporation is usually a bad idea and almost nobody does it. However, a trust can be fairly simple to have a lawyer set up (and some people even use generic form trusts if their state laws aren't too wacky and if they don't need their trust to be complicated). This means that the trust is technically the owner of the NFA item and you're in control of the trust. There are two main advantages to this: 1, it doesn't require a CLEO sign-off, which is impossible to get in many places. And 2, you can put your wife or other people on the trust so they can possess the item also.
Technically, only the entity listed at the top of the Form 1 or Form 4 can possess the item. And if you purchased it in your name with a CLEO sign-off that means your name is on the form so only you can possess it; other people can use it only if you're with them. But I wanted my wife to be able to possess my NFA items also, so I purchased them through a trust; the trust name is on my Form 4s and both of us are on the trust, so we can each possess my NFA items independent from each other. Also, virtually no CLEO will sign off in my neck of the woods so a trust was pretty much my only option.
