VIDEO E004 Transferee Types

Summary

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

Takeaways

• 🔍 This podcast episode focuses on the transfer types for NFA items within the firearm industry, specifically discussing Form 1 and Form 4 processes.
• 👤 The primary transferees for NFA items are individuals, trusts, and corporations, with the fourth type, a non-FFL, currently inactive in eForms as of June 2024.
• 🤝 Trusts are beneficial for sharing NFA items among active trustees without legal complications, unlike individuals who cannot lend their NFA items.
• 🏢 Corporations can hold NFA items for various purposes like R&D, movies, or security, with directors and officers having control over these items.
• 📸 For individual transfers, a passport-style photo is required, while trusts need a 5320.23 form (RPQ) per serial number per active trustee and trust documents.
• 💼 Corporate transfers require a 5320.23 form for each officer or director and the corporation's articles of incorporation.
• 💵 The cost for individuals involves the tax stamp fee, while trusts have an initial creation cost and may have additional handling fees for RPQs.
• ⏱️ 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 management, and Merlin for distributor and warehouse search, to streamline the NFA process.

Q & A

What is the main topic discussed in this podcast episode?

The main topic discussed in this podcast episode is the transfer types for NFA items, specifically focusing on how to move an NFA item to the right entity or create the NFA item using Form 1 or Form 4.

What are the three primary transferee types mentioned for NFA items?

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

What is the benefit of using a trust for NFA items?

The benefit of using a trust for NFA items is that the item can be shared among active trustees, allowing them to possess and utilize the item without violating federal laws.

Why might an individual choose to transfer an NFA item as an individual rather than through a trust?

An individual might choose to transfer an NFA item as an individual if they do not intend to lend the item to anyone else, ensuring sole possession and control over the NFA item.

What is the difference between a beneficiary and an active trustee in the context of an NFA trust?

In the context of an NFA trust, beneficiaries are individuals who would inherit the trust assets if all trustees are gone, and they do not require fingerprints or photos until that time. Active trustees, on the other hand, have the right to possess and utilize the NFA items and are required to submit fingerprints and photos.

What documentation is required for an individual transferring an NFA item?

For an individual transferring an NFA item, a passport-style photo with a plain background and prints are required.

What additional forms are needed when transferring NFA items through a trust?

When transferring NFA items through a trust, a 5320.23 form, also known as the Responsible Person Questionnaire (RPQ), is required for each serial number and active trustee, along with the trust documents.

What is the approximate processing time for a Form 4 transfer for an individual as of June 2024?

As of June 2024, the processing time for a Form 4 transfer for an individual can be as fast as 24 hours to a few days.

How does the transfer of NFA items work when an individual passes away?

When an individual holding NFA items passes away, the items transfer tax-free through a Form 5, which requires fingerprints and photos. The items are held in probate by the executor of the estate, and the transfer can take three to four months.

What is the advantage of holding NFA items in a trust when the owner passes away?

The advantage of holding NFA items in a trust when the owner passes away is that the transfer of the items to the next trustee or successor is effectively immediate, as per the trust's terms, without additional paperwork or delays.

Outlines

00:00

🔫 Introduction to NFA Transfers and Types of Transferees

Dan from ServerLive introduces the podcast episode focusing on the National Firearms Act (NFA) and Federal Firearms License (FFL) processes, specifically discussing transfer types for NFA items. He outlines the primary transferee types: individuals, trusts, and corporations. Dan emphasizes the importance of understanding these types, especially the benefits of trusts for sharing NFA items among active trustees without legal issues. He also mentions the fourth type, FFLs, which is not currently operational within the eforms system as of June 2024. The episode aims to educate listeners on how to legally move NFA items to the right entity or create NFA items using form one or form four.

05:01

📄 Documentation Requirements for NFA Transfers

This section delves into the documentation required for different types of NFA transfers. For individuals, a passport-style photo is necessary. For trusts, the creation of a Form 5320.23 (Responsible Person Questionnaire or RPQ) is mandatory for each serial number and active trustee. Trust documents are also required. Beneficiaries, however, do not need fingerprints or photos unless all trustees are deceased. For corporations, similar documentation is needed, including the corporation's articles and an RPQ for each officer or director. Dan also discusses the costs associated with these processes, highlighting that while individuals face no additional costs beyond the tax stamp, trusts and corporations involve initial setup and potential annual fees.

10:02

⏱️ Processing Times and Transfer at Death for NFA Items

Dan discusses the processing times for Form 4 applications, noting that individual applications can be approved within days, while trusts and corporations take longer due to additional legal reviews and paperwork. He explains that for individuals, transferring NFA items at death involves a tax-free Form 5 process, which can take three to four months. In contrast, if the NFA items are held in a trust, the transfer is immediate upon the death of a trustee, as per the trust's terms. For corporations, there's no significant delay as they can update officers and directors without affecting the entity's possession of NFA items.

15:03

🔗 Conclusion and Resources for NFA Transfers

In the conclusion, Dan invites listeners to explore the provided resources, including the RPQ form, which is crucial for NFA transfers. He mentions the benefits of using ServerLive's Live Scan system, which integrates with the 199 Trust service and Merlin, a distribution warehouse search tool. These tools facilitate the process of fingerprinting, client data management, and PDF generation for NFA transfers. Dan encourages listeners to like and share the podcast if they find it valuable and to visit the website for more information on the company's products and services.

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 video, the NFA is central to the discussion as it pertains to the processes and regulations surrounding the transfer of NFA-regulated items such as suppressors and short-barreled rifles.

💡FFL

A Federal Firearms License (FFL) is a license in the United States that enables an individual or a company to engage in the business of importing, manufacturing, or dealing in firearms. The video discusses the FFL process, emphasizing the importance of understanding the legal requirements and procedures for handling NFA items.

💡eForms

eForms refers to the electronic system used by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) for submitting applications related to NFA items. The video mentions eForms as the platform where forms like Form 1 or Form 4 are submitted for transferring NFA items.

💡Form 1

Form 1 is an application to make and register a firearm, which is subject to the NFA. In the context of the video, Form 1 is one of the documents discussed as part of the process for creating an NFA item, such as a homemade suppressor.

💡Form 4

Form 4 is an application for the transfer of a firearm subject to the NFA. The video explains Form 4 in the context of transferring NFA items from one entity to another, such as from a manufacturer to an individual or trust.

💡Transferees

Transferees are the recipients of the firearms or NFA items being transferred. The video discusses different types of transferees, including individuals, trusts, and corporations, and the implications of each for the transfer process.

💡Trust

In the context of the NFA, a trust is a legal entity that can hold and possess NFA items. The video explains that a trust allows for the sharing of NFA items among active trustees without the need for additional transfers, which is a significant advantage over individual ownership.

💡Corporation

A corporation, as discussed in the video, is another type of legal entity that can possess NFA items. Corporations are often used for business purposes, such as holding NFA items for research and development, movies, or security.

💡Responsible Person Questionnaire (RPQ)

The RPQ, also known as Form 5320.23, is a form required for each responsible person associated with a trust or corporation transferring NFA items. The video details the necessity of completing an RPQ for each active trustee or officer/director of a corporation involved in the transfer.

💡Tax Stamp

A tax stamp is a fee paid to the government for the privilege of transferring an NFA item. The video mentions the $200 tax stamp for most NFA items and the $5 tax stamp for Any Other Weapon (AOW) as part of the transfer process.

💡Live Scan

Live Scan is a technology used for capturing and electronically transmitting fingerprint images for background checks. The video promotes the use of Live Scan for streamlining the process of obtaining fingerprints for NFA applications, such as those required for trusts and corporations.

Highlights

Introduction to the podcast discussing the NFA, FFL process.

Explanation of transfer-free types for NFA items using Form 1 or Form 4.

Discussion on the primary transferee types: individual, trust, and corporation.

Mention of a fourth type, FFL, currently not active in eForms as of June 2024.

Definition and use case of an individual as a transferee.

Advantages of a trust for sharing NFA items among active trustees.

Risks of illegal transfer and possession of NFA items outside of defined transferee types.

Procedure for lending NFA items on an individual stamp versus a trust.

Documentation requirements for individuals, trusts, and corporations.

Details on creating a 5320.23 form for trusts and corporations.

Clarification on the role of beneficiaries in trusts regarding NFA items.

Costs associated with individual, trust, and corporation transferees.

Application times for Form 4 for individuals and the impact of instant NICS approval.

Expectations for transfer at death for individuals and the process for Form 5.

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

Continuity of NFA items within a corporation and the update process for officers and directors.

Encouragement to like and share the podcast for more insights.

Information about the podcast's main products: Server Live Scan and Merlin.

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 2x 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 uh 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 serers 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 Live

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

submit it so again if you like what

you're seeing uh share our podcast like

and share it on the platform you're

listening to and the next we'll see you

next time thank you