Reply To: Adding or removing "Responsible Persons"
- Posts: 10
It’s not a loophole at all. The fundamental type of trust we are utilizing is a Revocable Grantor Trust. Essentially the person who establishes the trust can then transfer property in and out of the trust, as well as add or remove trustees and beneficiaries at will. Once the Grantor passes away, the trust essentially becomes irrevocable. This means that the document at the time of death is, for all purposes, unchangable. The ATF is working within the confines of Trust Law. If they required an irrevocable trust from the onset then there would be true trust ownership and no one person would have ownership, and the trust would be unchangable from the time of purchase. This would make it very difficult to enact something like 41f because the only responsible party would be the trust-although they could attempt to force the trustees and beneficiaries to undergo background checks. The conundrum would be if an irrevocable trustee or benefiary failed the background check-a new trust with a new name and EIN would be required. Plus, dealers would be forced to delay selling the item until after the Trust was approved because the item could not be sold or refunded since the trust is irrevocable. And depending on the wording the Grantor(s) may not have access to the assets in the trust.