Opening a bank account for your trust?

Opening a bank account for your trust?

Postby gun_fan111v2 on Tue Sep 29, 2015 2:17 pm

I was reading up on this and a bunch of "internet legal gurus" are suggesting opening a bank account for your trust and paying out of that. Did anybody do this? What was the reason?
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Re: Opening a bank account for your trust?

Postby Ironbear on Tue Sep 29, 2015 3:33 pm

gun_fan111v2 wrote:What was the reason?

As I understand it, if something is in the trust, it legally belongs to the trust, not to "you". If the trust buys something, it must be bought by the trust. If "you" buy it, you can assign it to the trust, but there might be paperwork and fees associated with the transfer.
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Re: Opening a bank account for your trust?

Postby george on Tue Sep 29, 2015 4:17 pm

I jest used my checking and put, as trustee for( name of trust) in the memo line.
None came back and all have been cashed. I don't think it's a issue.
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Re: Opening a bank account for your trust?

Postby Ghost on Tue Sep 29, 2015 4:25 pm

You can send a money order if you're worried about it. I'd rather not have to deal with an account.
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Opening a bank account for your trust?

Postby gun_fan111v2 on Tue Sep 29, 2015 6:21 pm

Ghost wrote:You can send a money order if you're worried about it. I'd rather not have to deal with an account.


Well, that sounds pretty simple :)

The "article" I was reading did not specify if payment was for ATF or vendor selling the goods. Suppose a money order can be used for both.
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Re: Opening a bank account for your trust?

Postby 2in2out on Tue Sep 29, 2015 10:05 pm

That's a good point - never thought of that.

I think since any trustee of the trust is essentially a financial partner in the trust, they should have the ability to write a check from their own account and pay a bill (or purchase an asset) on behalf of the trust. But, I think I could argue the opposite side, also.

Might be a good reason to consult with an attorney.
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Re: Opening a bank account for your trust?

Postby Ghost on Tue Sep 29, 2015 10:12 pm

2in2out wrote:I think since any trustee of the trust is essentially a financial partner in the trust, they should have the ability to write a check from their own account and pay a bill (or purchase an asset) on behalf of the trust. But, I think I could argue the opposite side, also.

Might be a good reason to consult with an attorney.

I also could argue it either way and that's why I was hesitant to say anything. Since the trust isn't self funding I don't think it really matters where the money comes from.

IANAL so take it for what it's worth.
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Re: Opening a bank account for your trust?

Postby LarryFlew on Wed Sep 30, 2015 1:20 pm

gun_fan111v2 wrote:
Ghost wrote:You can send a money order if you're worried about it. I'd rather not have to deal with an account.


Well, that sounds pretty simple :)

The "article" I was reading did not specify if payment was for ATF or vendor selling the goods. Suppose a money order can be used for both.


Did not write anything on the checks I wrote to ATF through my personal account for trust stamps and they where quickly cashed. Guessing they just want the $$ and don't care how they get it.
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Opening a bank account for your trust?

Postby gun_fan111v2 on Wed Sep 30, 2015 3:23 pm

Personal check would certainly be easier to replace if lost
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Opening a bank account for your trust?

Postby jshuberg on Wed Sep 30, 2015 6:07 pm

BATFE doesn't care. I always send them a cashiers check, but many people use their personal checking accounts.

Ask yourself this question, if I used a personal check to pay the property taxes for my parents, would they reject the payment since it wasn't my taxes I was paying? Exact same deal with BATFE. Your buddy could write a check for you. They don't care, the tax has been paid for your application.


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Postby gun_fan111v2 on Wed Sep 30, 2015 7:26 pm

I think you guys helped debunk another internet myth :)
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Re: Opening a bank account for your trust?

Postby hammAR on Wed Sep 30, 2015 8:02 pm

The concept of a trust is a contractual arrangement whereby property is transferred from one person (Grantor) to another person or corporate body (Trustee/Trust) to hold the property for the benefit of a specified list or class of persons (The Beneficiaries). Thus a “Trust” is a legal entity and by law comes under the auspices of the Internal Revenue Service (IRS) and not the BATF. Thus, the $200 Tax Stamp is issued by the IRS.

Strictly speaking, the Grantor of a trust is merely the person creating the trust on behalf of the beneficiaries and the owner of property/assets who transfers that property to the trust, and no longer owns the property/assets. Trusts are essentially creatures of contract and a form of “incorporation” to own neat stuff, but also to avoid rules, probate, and taxes..................

Reverting back to the IRS - The term commingling is most often applied to funds or assets. When a fiduciary, a person entrusted with the management of funds/assets other than his own in trust, mixes funds with that of others, the fiduciary is commingling funds and thereby breaching his or her fiduciary duty. This may result in evidence that may be used in "piercing the corporate veil" (meaning the liability shield) of a sham corporation, where a person shields himself from personal liability through "incorporation", yet fails to observe strict separation of corporate and personal property or accounts, among other improprieties. The Uniform Trust Code is Federal, and both Trust and Fiduciary tax laws are federal and state.

So, while the BATF may not care where the money comes from, I am sure that the IRS may.................

In my opinion, one must be careful since commingling is generally prohibited, and why risk turning separate property into community property (transmutation), paying fines, and a possible vacation at the Grey Bar. Thus I solely use a Trust account and cashiers checks.


...and I didn't even cover the possibilities of fraud and falsifying Gov. documents.................. :rotf:
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Opening a bank account for your trust?

Postby jshuberg on Wed Sep 30, 2015 9:25 pm

I call BS. People have been using personal checks to pay the transfer tax for a trust owned NFA weapon for decades. The IRS doesn't issue the tax stamp. The BATFE does. You're over-complicating things significantly. While there can be subtle little gotchas you need to be aware of when owning NFA weapons, this is not one of them.

Thanks though, if I didn't know any better I might have actually believed you. Well done!


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Re: Opening a bank account for your trust?

Postby 2in2out on Wed Sep 30, 2015 10:51 pm

I read the posts, left and then came back. This is not someone else's trust or fund, and therefore I don't see how there's a breach of fiduciary duties or a graying of any line between owners or funds.

To me, the tax stamp is not even in question. It's who pays for the assets which are owned by the trust. If I'm the creator of the trust then I can pay for the assets out of my own account. It's my money, whether I transfer it to the trust and then pay for the assets or just pay out of a separate account.

None of this is easy for a non-lawyer type (like me) to digest, but I think it's finally clear to me that it doesn't matter which of my accounts pays for the tax stamp, the NFA item or any other asset owned by the trust, as long as it's my money and my trust.
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Re: Opening a bank account for your trust?

Postby george on Thu Oct 01, 2015 7:27 am

Well, if a audit of the trust were to happen, if the granter, trustees or beneficiaries didn't put in the moneys for purchase of the nfa items, where did
it come from ??? I'm sure the IRS could make all kinds of speculation on that, everything from a money tree to contraband.
I know the government does not think logically but just saying.
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