What is the downside of a Gun (NFA) Trust?
BATFE hasn’t decided whether to allow for a Form 5 transfer (tax free) upon the death of the grantor/settlor. While the BATFE does currently allow a Form 5 transfer if the firearm is registered to an individual and being transferred to a familial member, there is no regulation that the BATFE must do this. Hence, the BATFE may (1) either allow the tax free transfer in a trust scenario or (2) may decided not to allow a tax free transfer for anyone. UPDATE: I have been advised by Bob J. Howell, Esq. that he received a letter from the BATFE stating that they will allow a Form 5 (tax-free) transfer of a firearm in a trust to the beneficiary. However, this only applies if the firearm is being transferred directly to the beneficiary, not if the trustee is selling the firearm and giving the beneficiary the proceeds. UPDATE Part 2: Attorney David Goldman has informed me that BATFE’s chief counsel informed him, at the SHOT show, that the BATFE would NOT allow a tax-free transfer from the settlor
