CoRoMo gave a pretty good explanation of trusts. They're a separate legal entity, just like a corporation. When someone talks about having a "trust fund," they're talking about there being a trust which holds ownership of some money, and they are the beneficiary that the money is paid out to. The trust also has someone who manages that money in the meantime, called the trustee, and it's usually a bank when you're talking money, but could be anyone. And, of course, the trust has someone who started it, called the grantor or settlor, and that's whose money it was originally, like your rich uncle.
Now when you use a trust for NFA items, you're both the settlor/grantor and the trustee. (The rich uncle and the manager.) The beneficiary is a third person (anyone really--usually your kids). You put the NFA item into the trust, and because you're the trustee, you can use it until you die, whereupon it passes to the beneficiary.
The reason people use the trust route for NFA items is two main things: one, you don't need to get fingerprinted or get a CLEO signoff, and two, you can have multiple trustees (such as you and your spouse) so you can all legally possess the item alone.
As for tallpaul's question, I won't answer it for a few reasons. First, if I answer a question openly on the internet, then yes, I would lose money on the in-state people who also read the answer and did their own trusts. But that's not the biggest concern because I'm not getting wealthy off the NFA trusts I do. More importantly, trusts are a complicated legal field. If you don't do one properly, all NFA issues aside, you may not really be structuring the entire arrangement the way you personally want. Each trust is customized to the goals of its grantor. Also, if I were to go around giving legal advice on the internet to people in other states, I could be theoretically be prosecuted for practicing law in states where I don't have a license. I could also accidentally form a attorney-client relationship with someone that I didn't mean to, which means you could sue me when my advice didn't turn out the way you wanted. Since the ATF doesn't have a sense of humor, I'd rather people directly and extensively consult with an attorney that they're paying to know their situation and draft a trust accordingly. If they want to take the risk of using Quicken Willmaker instead, fine. The ATF hasn't really prosecuted anyone yet for a bad trust putting someone in possession of an NFA item. But then again, people haven't been using computer-program-drafted trusts for that long either. I'd hate to be the first person that ended up on the wrong side of the ATF because of a Quicken trust.
Aaron (who is a lawyer, but isn't your lawyer)
