Trusts, LLCs, & SBRs Oh My....

T

tgreening

New member
I have interest in purchasing one or my NFA items in the relative near future. My dilemma is in what fashion to go about doing it. Yes, I've done searches and picked up bits here and there but sifting the wheat from the chaff can be problematic since most threads devolve into something completely off topic within about a half doz. posts. :)

What I'd like to see is a nice short, concise Pro/Con list of going through a trust, buying through a corporation / LLC, or just rolling without either.

As for me, I live in Ohio, I already have both a C-corporation and an LLC. I hold 85% stock in the corp and I"m sole owner of the LLC. I have a VERY good (read expensive) lawyer that specializes in corporate law, real estate and assets specifically, but I don't know at the moment if he is up on NFA stuff. I'm sure someone in the firm probably is, but here again, nobody at this firm comes in any flavor even remotely resembling reasonable, let alone cheap.

What I don't have at the moment is a trust of any kind, which will probably change in the relative near future regardless of any NFA related issues.

I'm going to start another thread for getting schooled on SBRs, ARs, M16s, etc.

Any takers on this one here? :)
 
I have no idea, which is why I opened the thread and asked that question. :)

What I've since learned is that there are privacy issues that you have with a corporation and LLC that you don't have with a trust. With a corporation you also have personal property taxes that have to be paid, etc etc.

I've a mind to set up the NFA trust regardless of having the LLC and the C-corp, unless someone can chime in and tell me why passing on the trust is a better idea.
 
I can't comment on the reasons to have an LLC vs a Revocable Living Trust (RLT).

All I can add is that creating a RLT is very easy, relatively inexpensive, and works very well. At least it has for me this far. Most examples that you will find on the Internet for completing a form 1 or 4 will use a RLT as an example over an LLC. Now that I think about it I don't recall ever finding an example of either form 1 or 4 with an LLC as the purchaser or manufacturer.

As far as I know only myself, my immediate family, the BATFE, and now everyone reading this even knows I have a trust. So from a privacy point of view I think an RLT is a excellent way to go. Also when the RLT manufactures an SBS/SBR (Form 1) the RLT name not your name is engraved on the firearm - unless you name the RLT the "tgreening Revocable Living Trust".

If you name your RLT something like "TG Revocable Living Trust" then that and the trust city and state of residency will be placed on the NFA firearm. So for example, if your RLT name is "TG Revocable Living Trust" and you live in Bigcity, TX you would engrave your self made SBS/SBR:

TG Revocable Living Trust
Bigcity, TX

Hope that makes sense and helps some.

Regards,
Rob
 
Do the trust. Don't rely on an existing LLC. Who knows, you may not want to have that LLC forever. You might want to wind down the business or sell off its assets. Then what? You will have to remember to pay the annual fee to keep it alive until you decide to get rid of your NFA toy(s). Trusts don't have annual renewals and fees - set it up right and you can't screw up by simply forgetting about it.

Do not even think of using a c-corp where you don't own 100%.

Also, if your LLC gets sued for any reason, then it has your expensive toys just sitting there for your judgment creditor to levy on.

Of course, the best way is still to see if you can get your CLEO to sign off and own it individually. It's too easy for BATFE or even state governments to screw around with NFA trusts by changing the laws. However, once you an NFA has been transferred to you individually, its far less likely that any new laws will screw with your right to own and shoot it.
 
Trust vs. LLC

The biggest benefit to an NFA trust is that it is private. Nothing registered with the state. No potential issues with probate, etc.

Ohio has no annual upkeep for LLC's so the one time fee of $150 is attractive vs. the $600 that the big NFA TRUST. com is charging for their trusts.

If you're going to form an LLC specifically for the purpose of holding NFA goodies, it may be a wash. The nice thing about doing an LLC is that you don't have to send in a complete copy of your Trust every time you add to your inventory. You just send a copy of the State Certificate.

A trust can move out of state, however your LLC is stuck in one state. If you ever have to move, you'll end up transferring each of your NFA goodies AGAIN, at $200 a pop.
 
I would not want my NFA items mixed in with any other assets I had in a pre-exhisting c-corp or LLC. Not a lawyer, but that would seem foolish to me.
 
Form an NFA Trust

I am a lawyer in Texas and I just moved a client's NFA items out of his corporation and into an NFA trust. There are so many transfer and possession restrictions with NFA items why would you want to bring that hassle into your business? I also would imagine that your insurance agent wouldn't like to hear that you have NFA items as part of you business property.

Moreover, in Texas if your NFA items are business property they are subject to annual property tax assessments. I am sure you can find someone in your area that specializes in writing NFA trusts as part of their practice.
 
I am just starting into Class 3 (NFA) for retail as well as myself later down the road. During my research at least 8 of the 10 owners of Class 3 (NFA) items went with trusts and 7 of those got their trusts from Sean Cody. All those recommended the trust and also Sean Cody. He has a website which helps the "newbee's" like me understand the process. The trust was recommended as the individual was not subject to the political whims of the Chief Law Enforcement Officer who has to sign off on the application. Check out the website. I think it is ( http://www.texasnfatrust.com/ ). Very informative.
 
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