NFA Firearms Trust
On September 2, 2011, Michigan Attorney General Bill Schuette, issued an opinion stating “that the possession, manufacture, or sale of a firearm silencer is permitted in Michigan…if the person is licensed or approved to possess, manufacture, or sell such a device by the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), as required by MCL 750.224 (3)(c).” Opinion No. 7260, Sept. 2, 2011. One such way of achieving licensing is by acquiring your Title 2 weapon, also known as a Class 3 firearm, or silencing device (“NFA Weapon”) with a trust. Clark Hill PLC’s Personal Legal Services group is well aware of the requirements and benefits of using a trust to acquire your next NFA Weapon. Such benefits include:
- Protection Against Inadvertent Violations of the National Firearms Act. Under the National Firearms Act (hereinafter the “Act”), 26 U.S.C 5861 (2011), possession, either actual or constructive, rather than ownership is punishable. Constructive possession exists when a person knowingly has the power at a given time to exercise dominion and control over an object, either directly or through others. In the event of a violation under the Act any person, upon conviction, may be fined up to $10,000, or be imprisoned up to ten years, or both. 26 U.S.C. 5871 (2011). Further any NFA Weapon involved in any violation of the Act shall be subject to seizure and forfeiture. 26 U.S.C. 5871 (2011). Although the fine specified in the statute is an amount not exceeding $10,000, as of October 12, 2011, an amendment to Federal law provides for a fine of not more than $250,000 in the case of an individual or $500,000 in the case of an organization. 18 U.S.C. 3571 (b) and (c) (2011). If a trust is registered as the transferee with the National Firearms Registration and Transfer Record (hereinafter “NFRTR”), all of the trustees named in the trust may use or possess the NFA Weapon without running afoul of the Act.
- Minimizes Transfer Fees. Under 26 U.S.C. § 5811 a $200 transfer tax is paid on every transfer of a NFA Weapon. The term transfer is broadly defined by the Act to include “selling, assigning, pledging, leasing, loaning, giving away, or otherwise disposing of an NFA firearm.” 26 U.S.C. § 5845(j) (2011). The lawful transfer of an NFA Weapon requires the filing of an appropriate transfer form with the ATF (Form 4), payment of any transfer tax imposed ($200), approval of the form by the ATF, and registration of the NFA Weapon to the transferee in the NFRTR. By using a trust qualifying individuals may be named as trustees of the trust, entitling the trustees to possess or use the NFA Weapon without paying the $200 transfer tax.
- Provides Privacy. Ordinarily when transferring NFA Weapons to individuals other than FFLs, the transferees’ fingerprints and photograph must accompany Form 4. In addition, an individual transferee must have an appropriate law enforcement official execute the certification on the form. Id. The requirements for fingerprints, photographs, and the law enforcement certificate specified in 27 CFR 479.85 are not applicable to a transferee who is a trust.
- Probate Avoidance. The use of a trust to hold and manage your NFA Weapon provides flexibility, privacy, probate avoidance, and incapacity planning.
Eric Dorkin, MacKenzie Hyde and Ray Koenig obtained a significant victory in the 1st District Appellate Court. In a case of first impression, the Illinois Appellate Court granted Clark Hill’s emergency appeal in favor of Nina L., a minor seeking to apply for Special Immigrant Juvenile Status to stay in the United States following her 18th birthday. The trial court had denied Nina L.’s request for the judicial findings necessary for her to apply to remain in the United States after being abandoned by her natural parents. The trial court held that it was not proper for it to enter findings pursuant to federal statute. The Appellate Court reversed and entered the required findings itself on an emergency basis so that Nina L. could timely file the required documents with the U.S. Citizenship and Immigration Services, as her 18th birthday was just days away.
As reported in the local legal press, “This is a case that really mattered,” said Dorkin, who represented Nina L. “If the case was decided the other way, she was going back to Taiwan with no known family or connections and just a high school degree, and I think that’s a recipe for lifelong disaster.”
Estate of Donald Howell v. Donald Brenard Howell, 2015 IL App (1st) 133247 and 1140810 (cons.)
The Raymond W. Pontarelli Trust, et al. v. Michael Pontarelli, et al., 2015 IL App (1st) 133138
In re Estate of Leonard Koenen, 2014 IL App (1st) 140080-U
In re Guardianship of Florence Pontarelli, 2014 IL App (1st) 122782-U
Represented client in formation of a Family LLC to leverage discounts available to pass family wealth to second and more remote generations while minimizing estate and gift taxes
Represented multiple clients in “second home planning” for properties on Lake Michigan and inland lakes in Michigan, Indiana, and Illinois
Represented high net worth clients in the negotiation and implementation of pre-nuptial agreements
Represented client in three-way commercial closing in excess of $7 million dollars
Represented executor in negotiation and approval of a multi-million dollar wrongful-death settlement, including a partial sealing of the court file in order to secure settlement confidentiality requirement
Representing the YMCA of Metropolitan Detroit and the American Red Cross in separate will and trust contests in Oakland County Probate Court
Successfully representing Comerica Bank in a complex will and trust contest in the Wayne County Probate Court
Obtaining a favorable settlement on behalf of two beneficiaries of a substantial family trust against Standard Federal Bank and one of the largest Michigan law firms in a case involving breach of the prudent investor rule and breach of fiduciary duties in the management of a hedge fund which stuffed its gain to the trust