non-NFA items in a seperate trust?

[Racewin]

A family member is setting up a regular trust. They don't have any NFA items nor plans to get any.
Would there be a benefit to making a firearm specific trust, or is it best to just have the one for baseball cards, cars, and guns, etc?

 

[Abbey]

I don't think there is a benefit to making a firearm specific trust with no NFA. Just use your regular personal property trust. I'd still talk with an estate attorney about the pros/cons of managing your trust assets though.

The probate threshold in AZ is only $75k, so I'd say it's a good idea to use a trust just to keep assets from being disclosed in probate (which is a public process).

That said, I've _heard_ that for some families, guns and cash on hand are often lost mysteriously after someone passes because there never seem to be any in the house by the time any appraisal is made.

But if your family is more fortunate than to experience such accidents, explicitly putting assets in a trust is a good idea.

 

[Racewin]

When you say the probate threshold is $75k, you mean under that no probate, over that means probate?

Fortunately, not worried about stuff dissappearing.

If they decided to go down the NFA route, would it be best to have a seperate trust just for NFA stuff, or should all Title I firearms also go in there?

 

[Abbey]

I think the threshold is $75k property, maybe different for real estate. So definitely confirm with an estate expert. But yeah, below that threshold means that the probate court deems the estate not worth entering probate.

I personally quit using trusts for NFA. (Recently sold the last MG on my old trust so once the paperwork clears I'll "revoke" my revocable trust.) There are still some really good reasons to use a trust but I had a bunch of good reasons to NOT use one, but that's a different debate.

Purely from an estate planning perspective, putting NFA and Title 1 guns together in a trust makes sense to me just to make it easier to manage guns coming/going in one place without having to update the property schedule of my "main trust".

 

[Lion Armament LLC]

What are the reasons to not use a trust for NFA items?

Is it possible to have a trust within a trust, or would a person just have two separate trusts for guns and "not guns"?

 

[blasternaz]

Thought about moving NFA items into the family trust. Decided I'd already paid the tax stamp once, I didn't need to pay it again! Form 5 is your survivors friend!

 

[Abbey]

PM'd since I included some personal info & context, but stripping that out here, "why I no longer feel the need to bother with trusts" (I still see value, if your scenario favors using a trust, that's cool. You don't need to defend your choice)

1. NFA transfer rules changed and they now require every trustee and successor trustee to be included on applications. That is a non-starter for me. My family members are simply NOT going to do this. And I'm fine with that. Also, they no longer require CLEO signoff, which was a big reason I setup my old NFA trust to begin with.

2. NFA transfer times have greatly sped up over recent years. To be fair, even trust times are pretty fast now.

3. Some of my old NFA items are now worthless. Easier to dispose of ancient heavy paperweight suppressors and clapped out SBR lowers as an individual without having to update trust property schedule paperwork. (This is minor.)

4. Managing the trust isn't "set it & forget it". I've had to change some successor trustees because "life happened". It wasn't fun.

5. Nobody in my family uses NFA without me there. So I personally never needed to have more people authorized to possess my NFA.

6. I used to think I'd never sell anything. Then (again) life happened, things change, and I've bought/sold items. For a trust, you have to update property schedules every time you do that.

7. My family gets a free Form 5 transfer when I die. I've left instructions for how to do that.

8. AZ is a community property state anyway. This introduces complications in the validity of simple trusts where, when I die, community property will immediately be owned by my wife regardless of what a trust says (unless it's structured to cover community property use cases, and likely signed off by my wife). I can't decide that my son is a trustee and inherits the NFA item, when it is actually community property and my wife owns it.

There are probably more reasons, but tl;dr, I find Individual forms to be easier for NFA.