I'm not sure how many of you are lawyers or understand legalese, but I have an opinion on why I think the executor is not in violation of the federal law.
It's because being an executor of an estate is like being a trustee of a trust.
A trust is a legal entity that owns things, and if you're a trustee, you can possess those things legally. That's why trusts are great--there can be more than one trustee, so your wife can take your suppressor to the range, and if you die, she doesn't even have to arrange for the Form 5 transfer. That can wait until after she dies.
Likewise, an "estate" is a legal entity that is basically how you, as a person, continue to legally exist for a while after you die. If you die, lawyers refer to your "estate" as owning the things that you used to own. Your executor is the person who manages your estate (and winds things up, gives them away according to your will, etc). So since your estate is you, it can legally own the NFA firearms that you legally owned while you were alive. Since your executor of your estate is legally very similar to a trustee of a trust, they can physically be in possession of the NFA items as long as the estate exists without violating federal law.
The difference between a trust and an estate is that estates exist to be "wrapped up." Once you die, your "estate" only exists long enough for your executor to guide things through probate and give all your stuff away according to your wishes. During that process, if you have NFA items, the executor will transfer them on a Form 5 to whoever you left them to. Once that's done, the executor physically gives them to the new owner and can no longer possess them. And then the estate ceases to exist.
Bear in mind that this isn't the ATF's official explanation, but, as an attorney, it is my legal analysis of the situation and why you're not illegally in possession as the executor. Don't take it as legal advice, because I'm not your attorney.
With all that said, trusts are still useful as estate planning devices because they allow property to pass outside of probate. If you don't have a trust, then your executor has to do a Form 5, but the probate court is generally involved in making sure that your will and estate are being properly disposed of according to your wishes. With a trust, you'll still need to pass the NFA item along via a Form 5, but the probate court doesn't have to get involved at all.
The same is true for ALL trusts and estates--not just NFA ones. NFA trusts are just trusts that are slightly tweaked to give you additional benefits vis-a-vis NFA items. When it comes to the way normal trusts work, they aren't any different in how property passes on.
I hope that all makes sense to people. There are benefits to trusts, but not everyone needs one, and you can safely own NFA items without one.
Aaron
