You have finally decided to take the plunge into the NFA World, and your going to start buying Suppressors, SBR’s, etc. But one looming decision that you have to make is how are you going to file. With a Gun Trust, or as an Individual? But then you do research and realize that Gun Trust can be expensive, and the wait times seem to take longer for the ATF to approve your NFA items than by filing as an individual. Sometimes as much as 1-2 extra months. However, with that said, there are advantages to having a Gun Trust compared to an Individual. For one, you can add Co-trustees to your Trust which can possess your NFA Items without you being present. And you can have beneficiaries on your Trust which means when you die, the beneficiaries will easily take possession of your NFA items. So, a NFA Trust is a good way to go. Note: See our YouTube video “Individual vs. Trust”.
Even with the cons of using a Trust, many fear that if they do not go with a Trust, that when they die, their NFA items will not pass down to their heirs. And once you file as an Individual, it will cost you another $200 per NFA item to transfer it to a Trust down the road. So, you want to get it right the first time.
So, with that said, what really happens to your NFA items when you die if they were filed as an Individual? There are so many misconceptions out there that say that the government will take control of your NFA items. However, the purpose of this article is to debunk these misconceptions. Considering that even though you filed as an Individual, and not as a Trust, you will still be able to pass these NFA items down to your heirs. Below is what to do.
What do I need to do if my NFA items are listed in my name only(Individual), and not on a Trust?
Once the Form 5 applications are approved, the heirs will be able to legally take possession.
-Form 5 application is the tax free form that will transfer the NFA items over to the heirs in the Will.
-Form 5 approval turnaround times are approximately 30 days. Could vary though.
-The heirs in your Will are the ones that will be eligible to apply for the Form 5’s.
Summary: Even though your NFA items will transfer down to your family on a Form 5(tax free) application, we still recommend a Gun Trust. Having a Gun Trust will simplify the transfer process upon your death. It’s pretty straight forward with a Trust. Whoever is listed as the beneficiaries/Co-trustees, will be the ones who take sole possession of the NFA items without the need to go through the Will. However, even with having your NFA items in a Trust, your heirs(beneficiaries) will still have to submit the Form 5 tax free application.