E004 - NFA Forms - Transferee Types

Summary

In this podcast episode, Dan from Server Livescan discusses the intricacies of transferring NFA items within the firearm industry. He explores the different transferee types, focusing on individuals, trusts, and corporations. Dan explains the benefits of trusts for sharing NFA items among trustees and contrasts this with individual ownership. He also covers the documentation required for each type, including photos and forms, and touches on the costs and processing times associated with transfers. The episode aims to demystify the NFA transfer process and provide practical insights for industry professionals.

Takeaways

• 🔍 This podcast episode focuses on the transfer types for NFA items, specifically discussing Form 1 and Form 4 within the NFA, FFL process.
• 🏢 The primary transferee types discussed are individuals, trusts, and corporations, with the fourth type, FFL non-dealer, currently inactive in eForms.
• 👤 Individuals can possess and utilize NFA items, but cannot legally lend them to others without an illegal transfer occurring.
• 🏛 Trusts are legal entities that allow active trustees to share and possess NFA items, which is beneficial for families or groups.
• 🏢 Corporations, as business entities, can hold NFA items for various purposes like R&D, movies, or security.
• 📸 For documentation, individuals need a passport-style photo, while trusts require a 5320.23 form (RPQ) per serial number per active trustee, along with trust documents.
• 💼 Corporate transfers necessitate a 5320.23 form for each officer or director and the corporation's articles of incorporation.
• 💵 The cost for individuals involves only the tax stamp, while trusts have initial creation costs and corporations have state incorporation fees and annual fees.
• ⏱️ Transfer times vary: individuals can be processed in days, trusts take about four months, and corporations also around four months due to legal reviews and paperwork.
• 💡 The podcast suggests that using a Live Scan system can expedite the process by generating RPQ forms quickly using collected data.
• 📈 The host promotes their products, Server Live Scan for fingerprinting and client data, and Merlin for distributor and warehouse search, to streamline the NFA process.

Q & A

What is the main topic of the podcast episode?

The main topic of the podcast episode is discussing the different transferee types for NFA (National Firearms Act) items when using Form 1 or Form 4, specifically focusing on individuals, trusts, and corporations.

What are the three primary transferee types mentioned in the podcast?

The three primary transferee types mentioned are individual, trust, and corporation.

What is the difference between an individual and a trust as a transferee?

An individual transferee is a single person who can possess and utilize the NFA item. A trust is a legal entity that can hold assets and allows active trustees to possess and share the NFA item.

Why might someone choose to transfer an NFA item to a trust instead of as an individual?

Someone might choose to transfer an NFA item to a trust to allow active trustees to possess and share the item, which is beneficial if they want to lend the item to trusted individuals without running afoul of federal laws.

What is required for an individual's documentation when transferring an NFA item?

For an individual's documentation, a passport-style photo with a plain background, no glasses, hat, or sweatshirt, and demographic information are required.

What additional forms are needed when transferring an NFA item to a trust?

When transferring an NFA item to a trust, a 5320.23 form (Responsible Person Questionnaire or RPQ) is needed for each serial number and active trustee, along with the trust documents.

What is the current status of transferring NFA items to a non-FFL entity as of June 2024?

As of June 2024, the functionality to transfer NFA items to a non-FFL entity is not turned on inside of eForms.

How long does it typically take for a Form 4 transfer for an individual to be approved?

The approval time for a Form 4 transfer for an individual can range from as quick as 24 hours to several days, depending on various factors including background checks.

What are the additional costs associated with setting up a trust for NFA item transfers?

The additional costs for setting up a trust can vary widely but typically include an initial trust creation fee, which can range from $150 to $250 or more, depending on the service provider.

How does the transfer of NFA items work in the event of the individual owner's death?

In the event of an individual owner's death, the NFA items are transferred tax-free on a Form 5, which requires fingerprints and photos, and is processed through probate, taking approximately 3-4 months.

What is the advantage of holding NFA items in a trust upon the death of a trustee?

The advantage of holding NFA items in a trust is that the transfer of items to the next trustee or successor is effectively immediate upon the death of a trustee, as dictated by the trust agreement, without additional paperwork or delays.

Outlines

00:00

🔫 Introduction to NFA Transfers and Entity Types

Dan from ServerLiveScan introduces a podcast episode focusing on the National Firearms Act (NFA) and Federal Firearms License (FFL) processes. The episode aims to discuss transfer types for NFA items using forms like Form 1 and Form 4. Dan mentions the importance of setting up an eForms account and understanding the different forms used in the process. The primary transferee types discussed are individuals, trusts, and corporations, with a brief mention of a fourth type, FFLs, which is not currently operational in eForms as of June 2024. Dan emphasizes that the information provided is based on his experience and not legal advice.

05:01

📚 NFA Transfer Documentation Requirements

This section delves into the documentation required for transferring NFA items as an individual, trust, or corporation. For individuals, a passport-style photo is needed. Trusts require a Responsible Person Questionnaire (RPQ) form ATF 5320.23 for each active trustee and serial number, along with trust documents. Beneficiaries under a trust do not need fingerprints or photos until all trustees are deceased. For corporations, similar documentation is required for officers and directors, along with articles of incorporation. Dan also discusses the costs associated with trust creation and the handling fees some shops may charge for processing RPQs.

10:02

⏱️ Processing Times and Transfer at Death

Dan explains the processing times for Form 4 applications, noting that individual transfers can be approved within days, while trusts and corporations take longer due to additional legal review and paperwork. He also addresses the transfer of NFA items at the death of an individual, where items transfer tax-free via Form 5, which requires fingerprints and photos. If items are held in a trust, the transfer is immediate upon the death of a trustee, with no additional paperwork needed, as per the trust's terms. For corporations, there's no transfer delay as the organization continues with updated officers and directors.

15:03

🔗 Conclusion and Resource Mention

In the concluding part, Dan provides a brief overview of the Responsible Person Questionnaire (RPQ) form, which is filled out for legal entities like trusts and corporations. He mentions the benefits of using ServerLiveScan's system for generating these forms quickly. Dan encourages listeners to like and share the podcast and directs them to the company's website for more information on their products, including Server Live Scan for fingerprinting and Merlin for distributor and warehouse searches.

Keywords

💡NFA

The National Firearms Act (NFA) is a United States federal law that regulates the sale, possession, and transfer of certain firearms and weapons. In the context of the video, NFA refers to the legal framework within which the discussion of firearm transfers and regulations takes place. The script mentions NFA items, indicating that the conversation is centered around the compliance and procedures related to this specific legislation.

💡FFL

FFL stands for Federal Firearms License, which is a license in the United States that enables an individual or a company to engage in the business of selling firearms and ammunition. The video discusses the FFL process, suggesting that it is a key component in the transfer and regulation of NFA items, and that understanding this process is crucial for those involved in the firearm industry.

💡Form 1 and Form 4

These are specific forms associated with the NFA process. Form 1 is used to make and register an NFA firearm, while Form 4 is used for the transfer of NFA items. The video script discusses these forms in the context of transferring NFA items, emphasizing the importance of understanding the documentation and procedures involved in such transactions.

💡Transferees

In the context of the video, transferees refer to the recipients of NFA items during a transfer. The script mentions different types of transferees, such as individuals, trusts, and corporations, highlighting the various legal entities that can legally possess and transfer NFA items. Understanding the different types of transferees is essential for compliance with NFA regulations.

💡Trust

A trust, as discussed in the video, is a legal entity that can hold assets, including NFA items. The script explains that a trust allows for the sharing of NFA items among active trustees without violating federal laws, which is a significant advantage over individual ownership. The concept of a trust is central to the discussion of how NFA items can be legally shared and transferred.

💡Corporation

A corporation, as mentioned in the script, is another type of legal entity that can possess NFA items. The video discusses how corporations, such as LLCs, can hold NFA items for various purposes like research and development or security. The concept is important for understanding the business aspects of NFA item ownership and transfer.

💡Responsible Person Questionnaire (RPQ)

The RPQ, or Form 5320.23, is a form required by the ATF for individuals associated with trusts or corporations applying to possess NFA items. The video script details the necessity of this form for each serial number and trustee, emphasizing its role in the documentation process for NFA item transfers.

💡Tax Stamp

A tax stamp is a fee associated with the transfer of NFA items. The video mentions a $200 tax stamp for most NFA items and a $5 tax stamp for Any Other Weapon (AOW). The tax stamp is a significant part of the financial aspect of the NFA transfer process and is a required payment to the government for the privilege of transferring these regulated items.

💡E-Forms

E-Forms refer to the electronic system used for submitting applications and forms related to NFA items. The script discusses the use of E-Forms for submitting applications like Form 1 and Form 4, indicating that this is the modern method for handling NFA-related paperwork and ensuring compliance with regulations.

💡Live Scan

Live Scan is a technology mentioned in the video that is used for fingerprinting and data collection, which is part of the process for submitting forms like the RPQ. The video script suggests that Live Scan systems can streamline the process of creating the necessary documentation for NFA item transfers, making it a valuable tool for those in the industry.

Highlights

Introduction to the podcast discussing the NFA, FFL process.

Discussion on setting up an eForms account for the NFA process.

Explanation of different types of forms used in the NFA process.

Focus on transferee types for Form 1 or Form 4 within the NFA process.

Definition of individual transferees and their rights in the NFA process.

Advantages of using a trust as a transferee type for NFA items.

Clarification on the legal entity status of corporations in NFA transfers.

Importance of not lending NFA items without proper transfer documentation.

Documentation requirements for individuals in the NFA process.

Details on creating a trust and the necessary documentation for transferees.

Explanation of the role of beneficiaries in a trust for NFA items.

Documentation and requirements for corporations as transferees.

Costs associated with different transferee types in the NFA process.

Timeline for form processing times for individuals, trusts, and corporations.

Procedure for transferring NFA items at the death of an individual.

Immediate transfer of NFA items held in a trust upon the death of a trustee.

Continuity of NFA items within a corporation irrespective of individual changes.

Promotional information about the podcast and the services offered by Peterson Farms USA.

Transcripts

hey everybody this is Dan from server

Livescan welcome back to another edition

of solutions for the firearm industry uh

our podcast that we're walking through

uh some of the ins and outs of the NFA

FFL uh process if you missed the first

couple versions go check out couple

episodes go check out uh we talk about

how to get your so uh we talk about how

to get your eforms account set up and we

talk about the types of forms and how

they're used and when they're used and

in this episode we're going to talk

about transf free types so once you're

inside say a form one or a form four uh

what are the transf free types that we

can utilize uh to move an NFA item from

where it is now uh to the the right

entity or to create the NFA item if

you're using form one so uh again if you

haven't liked or shared uh the podcast

please do that now um and follow it so

you can keep up to date on the weekly

releases as we push out the episodes and

with that we'll get into uh this

so what I got here um made a little

documentation on what the different

types of uh transferees are uh for the

most part we'll talk about three uh the

primary ones basically individual and

trust those are the big ones and then

there's also a corporation you can

transfer to as well there is a fourth

type um that is allowed which would be a

FFL that is a nonot uh that

functionality currently as of June of 24

is not turned on inside of eforms uh but

these three currently are so individual

trust and Corporation so a little bit

let's talk about what it is so

individual is plain and simple a single

person uh that can possess uh and

utilize the NFA item the trust is a

legal entity uh that can hold assets and

a corporation is a legal entity that is

you know a business type think of an LLC

think of a corporation Etc uh there are

times where a company needs to hold on

to NFA items for R&D for movies for uh

security corporations Etc that's where

those type apply but end of the day it

is still an entity oh and one caveat I'm

not a lawyer uh so do not take this all

as legal advice this is simply what I

know uh from doing autona forms and

working with the industry uh these past

years so but um so let's talk briefly

about the the the two common ones and

why we would want to do an individual

versus a trust okay so the big benefit

of a trust is that the item um can be

shared in between the active trustees so

usually as an FFL when I'm talking to

somebody who's new to the process I will

ask them a question um if they have

anybody in their life that on a Friday

night they would lend a firearm to that

they would bring back that that person

would bring back on a Sunday and

typically that's a pretty visceral

answer of hell no nobody gets my guns or

yeah my dad my brother my best friend

friend my spouse whatever right so

typically there's a very uh very concise

answer to that question if they answer

no nobody gets my guns then the

individual is absolutely the way to go

so if they answer yeah I would trust my

brother and lend it to them then we talk

about the trust piece of it and what

that means so the active trustees can

possess and borrow that item if a

individual were to lend if the St if the

item is on an individual stamp and they

were lent to somebody else that would

constitute an illegal transfer of the

one who owns the stamp and the person

who's in possession of it would be

possession of an illegal item so not

things you want to play with because

they're federal charges so um that's why

we talk about this a little bit so on

the trust if the item if the NFA item is

held inside of a trust all the active

trustees have right and access to that

item and they can borrow it and share it

and utilize it with without having the

main person around now if it's an

individual you can't lend it to somebody

but you can go to the range and somebody

else can shoot it or utilize it you just

can't leave it in their possession or

let them leave the range uh with it but

by all means you can take them to the

range and you can let them borrow it you

can show off that item um you just can't

let them sole possession and leave your

control if that all makes sense on a

corporation you know the directors have

the power to director's officers have

the power to um exercise control over

that item and then if they're valid

employees on a letterhead type piece

they also can possess those items uh so

those are those are the uh who can

possess type question so documentation

say you're doing a form four or form one

um for documentation you need basically

the demographics of the individual for

an individual you need their photo

passport style photo plain background no

glasses no hat no sweatshirt mullet type

stuff um a a neutral background 2 by two

uh type photo and then prints whether

that is an EFT strongly recommend our

system for that but an EFT um or uh hard

cards that get mailed in so that's all

you need for the individual for the

documentation um piece of it for a trust

we need to create a

5320.23 otherwise known as the

responsible person questionnaire or rpq

form I need one form per serial number

per active trustee uh as well as the

trust documents so the rpq form so say I

there are two fire two silencers that

are going to get sold and there are

three people that are active trustees on

the trust I need to generate six forms

two serial numbers three trustees six

forms need to get made because I need to

make one rpq per serial number per

trustee that's active what about

beneficiaries do I need to do

fingerprints for beneficiaries no the

beneficiaries really don't matter in the

eyes of the NFA and the ATF until all

the trustees are gone so if the

intention is that I want to hold this

thing in trust I'm the single trustee

and when I pass I want to make sure it

gets to my kids uh or nephew niece

whatever um they would be beneficiaries

the beneficiaries would get it if all

the trusties are gone and they don't

need fingerprints and photos um until

that time comes

actually they don't need it at all but

um if they if you want to share that

item though they have to be a active

trustee okay uh if you're doing a form

for for a corporation same

5320.23 uh per officer or director and

then um the articles of in corporation

need to be submitted to say that or

Charter uh whatever it is in the state

that that Corporation or entity is

organized in uh that needs to be

uploaded uh to the electronic documents

section of eform to prove that the

company exists uh they may also come

back and ask for the Ein uh to prove the

company is is there but um from what I

understand how I read it articles in

corporation and then 5320 rpq for the

corporation so let's talk a little bit

about costs so uh obviously everything

on that line is plus the $200 tax stamp

or $5 tax stamp if you're doing an

AOW um but for an individual there's

really no extra cost uh per the

application side of it so so you

basically would log in eforms uh work

through it no additional cost to get set

up uh except that $200 stamp on a trust

uh you have to make the trust at some

point so there's going to be the cost of

that initial trust creation uh and that

can range wildly based on where you're

at and who you go to um so think 150 to

250 to whatever depending on who you go

to and who you talk to um but that's

initial trust fee and then uh some shops

will charge a SM a slight handling fee

for the rpqs if you have more than two

or three so typically the first one is

is many times included uh depends on

shop policy uh what it is if you want to

go after the corporation side of stuff

each state has their own fee structure

of where you incorporate in uh in

Wisconsin where I'm at it's about 125 uh

to generate the articles of Corporation

for the state and there's an annual fee

approximately $25 uh to make sure that

that Corporation stays in good standing

and then also possibly that rpq fee as

you go to the FFL or as you guys are

handling it um so as of June of 24 rough

numbers the application time for a form

four for an individual can be measured

in days we have seen them as fast as 24

hours um to three 24 hours to four or

five days uh if that client is a

individual or an instant NYX approval so

if they buy buy a long gun and you run

them through Nicks and they come back

immediately as proceed there's a good

chance that that form four will get

approved in days uh basically bulk push

goes out to FBI NYX runs the background

check the file comes back um the

approved ones come back to ATF and then

somebody at Branch will action the form

and approve it uh one thing to note uh

unlike the Brady Bill and and regular

Title One fire type one firearms uh the

FBI has to answer the Nicks request in

approximately 5 days so due to Brady

they have to do something with it and

answer it NFA that doesn't apply so it

can be open uh in in a status or delayed

or researching or whatever for months

until somebody gets to it so um per

round table I sat in a couple months ago

uh about 70% of the applications that

are going in will have an instant next

uh approval

so 70% of your customers uh will get a

instant and that means they should get

their form four approved within a couple

days uh if it goes longer than that uh

they have a common name they a cadency

where one of the other Cades is not um a

good person then it may delay and it can

be the three four months cross for the

most part um because of the additional

legal review and the paperwork and

processing that it takes uh to get that

form form four through the process we

are seeing approximately four months on

that and corporations are four plus

months again legal review additional

processing additional steps inside of

NFA Branch uh to work through it so um

transfer at death on an individual

what's going to happen is uh per the

estate or will caveat with whatever the

state uh law that says on top of that

those items will transfer taxfree uh on

a form five they will be held in Probate

by the uh executive of the estate and

then 3 four months go by and they will

get transferred that form five is very

similar to a form four except it's

taxfree needs prints needs photos uh if

it's going to another trust or another

entity then it'll need the documentation

that goes with it U but it is a taxfree

transfer but each serial number will

require a form five to get it to the

legal airs as it goes through so what

does that mean paperwork time a little

bit of frustration that um you pass as

an individual your heirs will get will

get the item assuming they're not

prohibited um but it's going to take

three four months and you have to do one

form five per serial number to get them

moved if the items are held in a trust

it's effectively immediate you basically

attach the death certificate uh to the

trust and update the truste active list

to remove the person who passed and the

next trustee in line uh or per how the

trust is set up with the next successor

um retains ownership and access to those

items if all the trustees are gone um

then per the trust or Le per the verbage

of the trust they would go to the

beneficiaries and move that way um so

there's no dwell there's no time there's

no additional paperwork uh to move and

control assets uh at time of death it

simply goes to how the trust is written

and stated for a corporation uh

corporations effectively don't really

die

unless they are very bad businesses but

uh it doesn't really matter if someone

uh comes or goes on it you simply update

who the officers and directors are and

uh the organization keeps moving on so

so good summary on here a little bit of

reference and helps hopefully demystify

a little bit of who the trustees or who

the transfere types are uh for a form

one or a form four um right now the

majority of what we're seeing are

individuals because people want to get

that can or that item IM immediately and

that the turnaround times are coming

very quickly um the trusts are still a

thing they are still getting submitted

and we're still processing trusts um

predominantly with um fathers and

children or families Brothers type stuff

is typically the usual relationship uh

corporations we don't see very much of

in our area for that

so um with that I'll show you the what

the rpq looks like if you haven't seen

that uh if you're following Along on

screen but this is the responsible

person questionnaire that needs to be

filled out uh effectively the legal name

of the entity so this would be the trust

name or the corporation name in box two

box three is the the name of the

individual uh that is doing it we fill

out their demographics uh or they fill

out their demographics as we go through

it this is where we attach a photo uh to

it the firearm data that's where you

need a rpq form per serial number per

firearm uh per form for we got to pull

in the Cleo data uh for that Resident

and then then they have to answer the

questions on here basically are they a

prohibited person or not then uh

signature so serus will help you fill

this stuff out rather quickly so that's

one benefit of using our Live Scan

system we actually have the PDF

generator uh built into this that we use

the data that we collect uh as we're

doing servers Live Scan and getting a

customer into the system uh we can

generate this rpq forms um very

quickly so with that uh that's the rpq

form we'll go a little more deeper on

that on some future episodes um and then

lastly if you are finding value to what

we're doing like and share the podcast

uh you can find the rest of the episodes

that we've done and are available uh up

here on the main page it's available on

most of the platforms that are out there

wherever you get your podcast from um

our website Peterson Farms

usa.com get you more information on what

you need of our product line and our two

major products Flagship is server Liv

scan uh it does the fingerprinting it

does the client data it does the PDFs it

has a integration with one 199 trust uh

to help you sell trust and get trust to

your customers and then uh Merlin which

is our distribution warehouse Search

tool we're pulling from approximately 11

different distributors and warehouses to

put everything on one paint of glass so

you can find inventory find pricing

research stuff and half of those six you

can order from currently so you can

build the order inside of Merlin and

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next time thank you