Armory Sponsor
Posted: 6/14/2011 12:12:42 PM EDT
| I know you can will your NFA items to an heir upon your death, but could someone explain this to me? Would my heir also be able to will the NFA items to their heir, and so on? |
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There are a couple different options for this.
If the NFA item is registered to you as an individual, the item can be transferred tax free after your death. You simply put it in your will as you would any other item, and the executor will have to complete a (I believe) a form 5 for a tax-free transfer to an heir. In this situation, you must do the transfer paperwork, but no tax is paid. The item can continually be passed down, with a form completed after each death for each transfer. If you sell the item, you will have to use a form 4 and the tax must be paid. The other option is to register the NFA item under a trust or corporation. Then, the item stays with the entity that owns it, and all the legal issues are the same as any trust/company asset. Those who are listed as trustees have access to the item. It does not need to be transferred unless possession is being transferred to someone who is not a trustee. So again, you can continually pass the item down to heirs, as long as you continue to add them to the list of trustees. For the record, I have never done either of the above, so someone may come along with more details or corrections to my post. |
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Quoted:
There are a couple different options for this. If the NFA item is registered to you as an individual, the item can be transferred tax free after your death. You simply put it in your will as you would any other item, and the executor will have to complete a (I believe) a form 5 for a tax-free transfer to an heir. In this situation, you must do the transfer paperwork, but no tax is paid. The item can continually be passed down, with a form completed after each death for each transfer. If you sell the item, you will have to use a form 4 and the tax must be paid. The other option is to register the NFA item under a trust or corporation. Then, the item stays with the entity that owns it, and all the legal issues are the same as any trust/company asset. Those who are listed as trustees have access to the item. It does not need to be transferred unless possession is being transferred to someone who is not a trustee. So again, you can continually pass the item down to heirs, as long as you continue to add them to the list of trustees. For the record, I have never done either of the above, so someone may come along with more details or corrections to my post. Trusts, unlike corporate entities, do not last forever. Upon the death of the Trust's Grantor, all assets must be distributed out. This is precisely what a Trust is for. The Trustee's job at that point is to Form 5 the NFA items out of the Trust to the heir of record. |
| Ok, so if I want to go the individual route instead of a trust, do I have to name my heir in my will, or can I have them file a F5 and just transfer the NFA item to them before I die? Basically, do I have to be dead to transfer it, or can I transfer it to them before my death? |
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Ok, so if I want to go the individual route instead of a trust, do I have to name my heir in my will, or can I have them file a F5 and just transfer the NFA item to them before I die? Basically, do I have to be dead to transfer it, or can I transfer it to them before my death? You have to have died. Otherwise, people would just do this to avoid the tax. |
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Ok, so if I want to go the individual route instead of a trust, do I have to name my heir in my will, or can I have them file a F5 and just transfer the NFA item to them before I die? Basically, do I have to be dead to transfer it, or can I transfer it to them before my death? You are not required to put them in your will, but I would recommend it to avoid any relatives fighting over it after you die. You cannot transfer an item using the form 5 until after your death. If you want to transfer it before you die, it will have to be done on a form 4 and the tax must be paid. Posted Via AR15.Com Mobile |
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Quoted:
There are a couple different options for this. If the NFA item is registered to you as an individual, the item can be transferred tax free after your death. You simply put it in your will as you would any other item, and the executor will have to complete a (I believe) a form 5 for a tax-free transfer to an heir. In this situation, you must do the transfer paperwork, but no tax is paid. The item can continually be passed down, with a form completed after each death for each transfer. If you sell the item, you will have to use a form 4 and the tax must be paid. The other option is to register the NFA item under a trust or corporation. Then, the item stays with the entity that owns it, and all the legal issues are the same as any trust/company asset. Those who are listed as trustees have access to the item. It does not need to be transferred unless possession is being transferred to someone who is not a trustee. So again, you can continually pass the item down to heirs, as long as you continue to add them to the list of trustees. For the record, I have never done either of the above, so someone may come along with more details or corrections to my post. Trusts, unlike corporate entities, do not last forever. Upon the death of the Trust's Grantor, all assets must be distributed out. This is precisely what a Trust is for. The Trustee's job at that point is to Form 5 the NFA items out of the Trust to the heir of record. Actually, as far as I know, most states honor "Living Trusts". This is actually one of the reasons a trust is nice. It can be amended any time, and it will "live on" past your death. |
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Quoted:
Quoted:
Quoted:
There are a couple different options for this. If the NFA item is registered to you as an individual, the item can be transferred tax free after your death. You simply put it in your will as you would any other item, and the executor will have to complete a (I believe) a form 5 for a tax-free transfer to an heir. In this situation, you must do the transfer paperwork, but no tax is paid. The item can continually be passed down, with a form completed after each death for each transfer. If you sell the item, you will have to use a form 4 and the tax must be paid. The other option is to register the NFA item under a trust or corporation. Then, the item stays with the entity that owns it, and all the legal issues are the same as any trust/company asset. Those who are listed as trustees have access to the item. It does not need to be transferred unless possession is being transferred to someone who is not a trustee. So again, you can continually pass the item down to heirs, as long as you continue to add them to the list of trustees. For the record, I have never done either of the above, so someone may come along with more details or corrections to my post. Trusts, unlike corporate entities, do not last forever. Upon the death of the Trust's Grantor, all assets must be distributed out. This is precisely what a Trust is for. The Trustee's job at that point is to Form 5 the NFA items out of the Trust to the heir of record. Actually, as far as I know, most states honor "Living Trusts". This is actually one of the reasons a trust is nice. It can be amended any time, and it will "live on" past your death. Dissolution can be extended through age or time dependent asset distribution, but a Trust will not continue indefinitely. For example, if you have a large sum of money you want distributed to your young children, but want to wait until they are well into adulthood or want to use the money as enticement for life milestones that are important to you (the Grantor), such as college, marriage, whatever, then the Trust will continue to exist under those terms until those conditions are met. But these terms must be written into the Trust. You'd have to create an extended distribution schedule for NFA firearms, but there has to be an end game for all assets in the Trust. |
Armory Sponsor