NFA trust: Who should be the Settlor / Grantor and why?

There are several steps in designing a NFA trust, the first consideration is to determine who should be the Settlor (or Grantor). This may change depending on who the beneficiary is, but generally the settlor is the person who contributes the property to the trust and is the current beneficiary of the property. The Settlor is not an authorized user, but is the one that will receive the benefit of the property.

To determine the best choice for the settlor, we often ask our clients if they are married, do you they have adult children, and who they want to receive the items after your death. Often the Settlors can be changed to reduce the risk of future legislative changes and increased transfer taxes. While this is not a normal consideration with a typical trust, a NFA trust should take this into consideration to create the most flexibility and protection for the creators of the trust and their families.

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