<![CDATA[Toronjo & Prosser Law - Blog]]>Thu, 15 Feb 2018 12:55:15 -0800Weebly<![CDATA[41(F) and You]]>Tue, 05 Jan 2016 19:56:38 GMThttp://t-plaw.com/blog/41f-and-youPicture
41(f) And You! What do you need to know and how does it affect you?

As you are most likely aware the ATF proposed a rule change in 2013 to close the “Trust loophole” for NFA transfers. This proposed change would require all “responsible parties” to the legal entity, Trusts, corporations, LLC’s etc to comply with the CLEO certification requirements and submit identifying information, ie. Fingerprints and photographs, with each form submission.

Well the Final Rule has just been published to the CFR on January 4th, 2016. It is set to go into effect 180 days after it was submitted which would be July 2, 2016. So what does it do? What has changed?

First off, It is not as bad as it could be. Trusts, Corps and LLC’s are still the most viable way to possess and acquire NFA items. They still allow continuity of ownership and allow multiple persons to be able to use and possess the items legally, unlike personal transfers were only the owner may be in custody and control of the NFA item.
Under the new rule, when a Form is submitted to make or transfer an NFA item (Form 1, Form 4 or Form 5) all responsible parties to the Trust will need to submit photographs, fingerprint cards (two copies), a copy of the Trust, and a Notification to the CLEO. (Note that this is a notification process and NOT a certification process so you will not be subject to the whim of a CLEO that refuses to sign the Forms.)

WHO is a “Responsible Person”? For most trusts this will be the Trustees of the trust, NOT the beneficiaries. BUT depending on how your trust is drafted, if the trust gives the beneficiaries the authority to possess the NFA item without Trustee supervision they could be construed as “Responsible Persons” So it is imperative that you review your trust to ensure that the beneficiaries are not granted too much authority or control over the assets.

Do you have to do this for EVERY form submitted? The answer is maybe, it just depends on how many you submit. If there have been no changes to the entity or the responsible parties and you had a form approved within 24 months of the current submission, then you will not be required to resubmit photos and fingerprints for each trustee. Instead you will provide a certification identifying the prior transfer and certifying that nothing has changed.
What about transfers pending before the rule changes? These transfers will not be affected and will be grandfathered in.
What about adding new trustees after the form has been approved? It does not appear that this has been addressed by the Rule. My position at this time is that only Current “Responsible Persons” will need to submit the information at the time the Form to make or transfer is submitted to the ATF.

What about Individual purchases have they been affected? YES! And for the better. The new rule appears to remove the CLEO certification from individual purchases so now those who do not want to use a trust or legal entity can purchase NFA items even if they live in a county that lacks a CLEO willing to sign the Certification!

<![CDATA[Using a Lawyer to Set Up an NFA Trust]]>Thu, 03 Dec 2015 21:01:12 GMThttp://t-plaw.com/blog/using-a-lawyer-to-set-up-an-nfa-trust

A previous post introduced NFA Trusts for Dallas, Fort Worth, Austin and Houston gun owners, whether they’re new to firearm ownership or are just enthusiasts.

In this entry we examine why you’d want an NFA Trust, should you use a lawyer instead of an online service, what to look for in a lawyer, and what you should expect by hiring a lawyer to assist you in establishing the Gun Trust.

NFA Trust Background
An increasing number of gun owners are interested in expanding their collections by purchasing additional items like suppressors, fully-automatic machine guns, or other weapons whose sale is restricted by federal gun law, or the National Firearms Act (NFA).

An NFA Trust, also known as a Gun Trust, is a legal entity that helps gun owners and enthusiasts handle the red tape that’s associated with personal ownership of NFA-defined weapons.

While individuals can set up a gun trust on their own, the laws and procedures are often complicated and confusing, especially for those new to gun ownership or trusts in general.

A quick NFA Trust or Gun Trust search via Google will return a dizzying amount of information, pseudo-legal advice, and commentary from all walks of life and opinions.
Because of the complexity and flux of federal and state gun laws, it’s best to consult with an attorney familiar with NFA Trusts in Dallas, Fort Worth, Austin and Houston to meet your specific needs.

The following information will help you in discussing gun trusts with a lawyer.

Experienced gun owners will already know these terms, but just in case you’re unfamiliar with NFA Trusts or you’re new to firearm ownership, here are a few terms that will aid you in discussing Gun Trusts with a lawyer.
  • NFA: The National Firearms Act, which imposes a statutory excise tax on the manufacture and transfer of certain firearms and mandates the registration of those firearms. (NFA Q&A.)
  • Title II: Refers to certain firearms, explosive munitions, and other devices that are federally regulated in the United States by the NFA. These can include machine guns, short-barreled shotguns and rifles, silencers or suppressors, and antique firearms.
  • Class 3 (or Class III): A special occupational tax levied against a dealer for the ability to sell firearms. This is often misapplied to NFA restricted items, which are in Title II.
  • Form 4: Is an application for Tax Paid Transfer and Registration of Firearm and is the form you will send in with your fee for an NFA item.
  • Trust: In broad terms, it’s the organized entity that owns designated property — in this case, firearms and other NFA-designated items.
  • Trustee: A designated individual that can make decisions based on the Trust and, in the case of an NFA Trust, those who have access to and can use the restricted weapons or assets.

Why Set Up an NFA Trust?
There are many reasons to do this (see benefits in previous post), but to briefly revisit, many gun owners want to:
  • Easily, safely, and legally transfer firearms and NFA items to family members upon death.
  • More easily purchase NFA items like suppressors.
  • Buying NFA items via a Gun Trust is much faster than buying as an individual because securing the signature of a chief law enforcement officer in the county where you live is not a part of the process in a trust.

Why Use a Lawyer Instead of an Online Service?
For new gun owners and enthusiasts looking to expand their collections, there is absolutely no substitute for sitting down with someone, shaking a hand, looking him or her in the eye, and having a conversation.

Yes, the Internet provides billion of How To articles, but can it answer a question the minute it pops into your head to meet your exact situation?

Lawyers provide a number of benefits to the drafting and implementation of a Gun Trust. While there are some aspects that are form letter-like, there will be sections that are customized to your specific situation, and it’s best to consult with an attorney who has experience in customizing a Trust with related documentation.

Because a Gun Trust has additional intricacies and requirements above and beyond a regular estate Trust, you want to have the backup and support of someone who can work with you and help untangle the mess.

In the context of the BATFE (Bureau of Alcohol, Tobacco, Firearms, and Explosives) and gun transactions, a lawyer can provide extensive support, ongoing counsel, and usually a guarantee of their work.

While it may cost you more money out of pocket than using an online service, you are paying for peace of mind in knowing the Gun Trust is set up properly. If there is ever an issue with the BATFE and a Gun Trust, people who use the fill-in-the-blank forms from the Internet are on their own, while those who hire attorneys have the experience and expertise of their lawyer to call upon.

Lawyers also carry malpractice insurance to cover their work in the event that there was a mistake by the drafter that resulted in litigation.
<![CDATA[The Value of NFA Trusts for Dallas, Fort Worth, Austin and Houston Gun Owners]]>Mon, 02 Nov 2015 21:00:52 GMThttp://t-plaw.com/blog/-the-value-of-nfa-trusts-for-dallas-fort-worth-austin-and-houston-gun-owners
If you already own firearms, chances are you’re familiar with NFA Gun Trusts. But for the sake of this post, let’s assume you have no idea what gun trusts are or why you’d want one.

An increasing number of gun owners are interested in expanding their collections by purchasing additional items like suppressors, fully-automatic machine guns, or other weapons whose sale is restricted by federal gun law, or the National Firearms Act (NFA).
An NFA Trust, also known as a Gun Trust, is a legal entity that helps gun owners and enthusiasts handle the red tape that’s associated with personal ownership of NFA weapons.

While individuals can set up gun trust on their own, the laws and procedures are often complicated and confusing, especially for those new to gun ownership or those who are expanding their collections with NFA items.

A quick NFA Trust or Gun Trust search via Google will return a dizzying about of information, pseudo-legal advice, and commentary from all walks of life and opinions.
Because of the complexity and flux of federal and state gun laws, its best to consult with an attorney familiar with NFA Trusts in Dallas, Fort Worth, Austin and Houston.

Yes, there is a cost associated with this, a bit more so than if you tried to set up a trust on your own. But working with a lawyer, you’ve paid for a peace of mind knowing that the gun trust is set up properly and will do what you expect. There’s “no muss, no fuss” with this approach.

While this site covers what a gun trust is and what the benefits are, in this post we’re going to refresh in as little legalese as possible so everything is handy.

What a Gun Trust IsAt its most basic, an NFA Trust or Gun Trust is really an estate planning tool. It is specifically designed for those who own property that is regulated by the NFA. These can include Title II (Class 3) firearms such as machine guns, short-barreled rifles, short-barreled shotguns, suppressors, among others.

A gun trust has the same benefits of a normal trust but contains special provisions to ensure that the trustees and other responsible parties do not run afoul of the NFA and become “accidental felons.”

Gun trusts allow owners of regulated firearms to use and share them legally with family members and to pass them to future generations. The trusts continue to gain in popularity because they offer legal protection from potential future laws, which may ban the possession or sale of certain firearms.

What a Gun Trust Is NotA Gun Trust is NOT a way to circumvent the BAFTE (Bureau of Alcohol, Tobacco, Firearms and Explosives). An NFA Gun Trust will NOT allow you to violate or bypass state or federal laws and restrictions.

-Anyone — known as a “trustee” — purchasing an item on behalf of the Trust still must comply with the Brady Act.

-If you want to cross state lines — known as “interstate transfer” — with an NFA item — known as any destructive device, machine gun, short barreled- rife, or short-barreled shotgun, for example — for a competition, moving, or hunting in another state (among other reasons) you must notify the BATFE in advance via a Form 5320.20 (download the form).

-A Gun Trust does not allow you to take an NFA item to a state that does not allow it — an example would be taking a short-barreled rifle to New York or California as they are illegal to possess.

-If you plan to move and take NFA items with you, you still must file Form 20 (see links above) with the BATFE and inform the organization of the new address where the NFA items will be located. It’s best to do this months in advance, not weeks.
Benefits of a Gun Trust
If you want to purchase as an individual an item that is regulated by the NFA, you must go through a complicated applications process — especially for new or less experienced gun owners. This process involves: fingerprints, photos, and an age-old requirement that a chief law enforcement officer (“CLEO”) in the county where you live sign off on the application.

There are many benefits of setting up an NFA Trust in Dallas, Fort Worth, Austin and Houston, including:

-CLEO is Not Required. The BATF mandates that individuals get the approval of the CLEO and, in many cases, local sheriffs refuse to sign off on a purchase for various reasons, which makes buying an NFA weapon nearly impossible for an individual. An NFA Trust works around this issue.

-Fingerprint Cards are Not Required. For an individual, the BATF requires two sets of fingerprint cards to go with Form 4 transfers. This does not apply to an NFA gun trust.

-Owner Photograph is Not Required. An individual is required to provide a photograph with the application. This does not apply to an NFA gun trust.

-Continuity. An NFA firearm trust can allow various people to possess and use Class 3 weapons owned by the trust. Without a trust, the individual owner — and no one else — can possess or use the item(s).

-Probate. There is no requirement to transfer the gun assets upon the death or legal incapacity of a trustee or beneficiary. When a trustee dies, all of his or her property must be distributed through the legal process of probate, which can be a long, exhaustive process depending on the estate. Probate also requires a high degree of liability for the person handling the estate — the executor — to ensure that all NFA items are properly transferred in accordance with state and federal law.

-Trusts are Confidential. Trusts are not filed with any federal, state, or local government law enforcement entity, other than the BATF, and are not required to file yearly accounting statements, disclose assets, or disclose the trustees or beneficiaries of the trust. If the gun trust buys an NFA Class 3 weapon, a copy of the trust itself must be filed with Form 4, but the trust and your name only show up on the tax rolls of the BATF. Since it is a tax related filing, it is exempt from most subpoenas and public records requests.

-No Filing Fees. Since nothing is filed with any government entity, there are no filing fees for someone to copy and file it in a government database.

-Protecting Your Collection. NFA Trusts in Dallas, Fort Worth, Austin and Houston should be set up to protect your entire firearms collection, not just NFA items, from seizure by creditors and the creditors of your beneficiaries, ensuring the collection is preserved for future generations of your family to use and enjoy.

-Multiple users. Multiple users authorized under the gun trust can use and possess the NFA items without committing a felony. To contrast: If you are married and you purchase a suppressor, you alone are allowed to have possession and control of that suppressor. If you leave it accessible in the home and a spouse or teen-ager has access to it, they may be prosecuted for “constructive possession” of a firearm, which is a felony. By having a spouse and close family and friends as trustees on your gun trust you avoid that potential problem since everybody listed will be allowed to have control and possession.
<![CDATA[Shall Certify Bill Stuck in Committee... Action is required!]]>Sat, 16 May 2015 00:44:55 GMThttp://t-plaw.com/blog/shall-certify-bill-stuck-in-committee-action-is-required
Presently sitting in the House Calendars Committee is Senate Bill 476 (SB476). This bill commonly referred to as the “Shall Certify” bill would require all Chief Law Enforcement Officers in Texas to certify all NFA Transfer forms that are presented to them in a timely manner, if they do not have a legal justification for refusing to do so. This bill will dramatically increase the ability of law abiding citizens of this state to purchase NFA items and will future proof our state form the possible repercussion is the proposed Rule 41P gets implemented. We strongly encourage everyone to contact their state House representative and demand that SB476 be brought to floor for a vote before the May 26th Deadline. 

To find your rep go here: http://www.fyi.legis.state.tx.us/Home.aspx

<![CDATA[Medical Bills in Bankruptcy]]>Thu, 18 Sep 2014 20:58:12 GMThttp://t-plaw.com/blog/-medical-bills-in-bankruptcy
Chapter 7 Bankruptcy Dallas
Even though debts such as credit cards, student loans and taxes are the most common sources of financial difficulty for our clients, many of our clients also have a considerable amount of medical debt.  Here’s the good news – whether your file for Dallas Chapter 7 bankruptcy or Texas Chapter 13 bankruptcy, bankruptcy can get rid of these medical bills.  

How Does Bankruptcy Affect Medical Debt?

For whatever reason – no insurance, poor insurance, high co-pays and deductibles, etc. – many people struggle to pay their medical bills.  When seriously injury or illness happen, everyone hopes that their insurance will be there to cover them.  That’s why we have insurance, right?  Unfortunately, insurance often times only solves part of the problem, leaving the injured person with heavy medical bill debt.  Paying medical bills is difficult no matter what the income of the household is.  Fortunately, filing bankruptcy in Texas is an option.

Bankruptcy requires you to list everyone you owe money to, including hospitals and other healthcare providers.  In Chapter 7 bankruptcy, you list all your medical bills and the discharge you receive approximately three (3) months after the case is filed relieves you of that debt.  Even though the medical bill is discharged, you can still voluntarily work out a payment arrangement with your doctor as a way to try preserve that relationship going forward.  Even in Chapter 13 bankruptcy, whether you file a Dallas Chapter 13, Plano Chapter 13, etc., you still could get a discharge of most if not all of your bills.  Because Chapter 13 is a repayment plan, you might be required to pay some of it back, but the balance you don’t pay under a confirmed repayment plan will be discharged. 

If you are drowning in medical bills or simply have medical bills in addition to other debts, contact our experienced Texas bankruptcy attorneys today to review your situation and give you a list of potential solutions.    

<![CDATA[Listing Creditors in Bankruptcy]]>Fri, 22 Aug 2014 22:17:18 GMThttp://t-plaw.com/blog/-listing-creditors-in-bankruptcy
Bankruptcy Dallas Creditors
It is almost universal when our clients give us the paperwork to prepare their bankruptcy case, they make notations next to 1 or 2 of their creditors, usually credit cards, saying “do not include” or “I want to keep this one.”  Unfortunately, you’re not allowed to simply not list creditors in bankruptcy.  Whether you file Chapter 7 bankruptcy in Texas where you’re trying to get rid of all your credit card debt, or you file Dallas Chapter 13 bankruptcy where you might end up paying a portion of your credit card debt back, you still have to list them. 

What if I don’t know who to list?

The Bankruptcy Code requires that you list in your bankruptcy schedules everyone that you owe money to.  More specifically, it requires the debtor to list anyone that might have a claim, even if you dispute that you owe it or not.  Remember, the purpose of the bankruptcy laws is to benefit you, so including all creditors, even over-including those you might not owe out of an abundance of caution, is imperative to the success of your case.  

Unfortunately, not all debts are clear cut and you’re not always sure whether you owe certain individuals or businesses debts.  For example, you recently visited the doctor and made your co-payment.  However, before you get the potential bill something comes up and you’re forced to file for bankruptcy.  Do you owe the doctor?  Maybe, maybe not.  A prudent Dallas bankruptcy attorney would make sure that potential debt is listed.  But why?

The main reason for making sure these debts are listed is that debts won’t be eligible for the bankruptcy discharge if you do owe them but failed to list them.  Furthermore, failing to list anything in your paperwork that could be construed as an omission, false and/or misleading, which can have grave consequences.  In particular, filing false oaths or failing to list all the information required in your paperwork could cause you to lose your bankruptcy discharge.  

If you are considering bankruptcy or are currently in bankruptcy but concerned your creditors have been improperly listed, contact our experienced Texas bankruptcy attorneys today to review your case.  

<![CDATA[Tax Returns and Refunds in Chapter 13 Bankruptcy]]>Mon, 11 Aug 2014 21:12:49 GMThttp://t-plaw.com/blog/tax-returns-and-refunds-in-chapter-13-bankruptcy
dallas chapter 13 bankruptcy attorney
Tax returns and potential tax refunds can be problematic whichever chapter of bankruptcy you file. In Chapter 7 bankruptcy, for example, a refund for a return that has been filed but the refund not yet received is an asset that must be listed in your bankruptcy schedules. In Dallas Chapter 13 bankruptcy, refunds may need to be turned over to pay your creditors, depending on where your case is filed.

So What Happens to My Tax Refunds?: Each year you are in a Chapter 13 case, whether you file a Plano Chapter 13, Richardson Chapter 13 bankruptcy or anywhere else, you are required to submit copies of your filed income tax returns to the Chapter 13 Trustee. If you are entitled to a tax refund from those returns, whether and how much of that refund you can keep will depend on where your case is filed.

In the Northern District of Texas (i.e. Dallas County bankruptcy, etc.), you are allowed to keep tax refunds that are less than $2,000. However, the Trustee has discretion in demanding turnover of even small refunds if your Chapter 13 repayment plan is behind on payments. If your refund is larger than $2,000, you will likely be allowed to keep the $2,000, but required to turn over the excess amount for payment to your creditors. There is an exception to this rule, however, in that debtors who are able to show some form of hardship or unexpected expense are often times allowed to keep even the excess portion.

In the Eastern District (i.e. Collin County bankruptcy), the same $2,000 threshold applies. However, if your refund exceeds that threshold by even $1.00, you are typically required to turn over the entire refund. This is where withholding and exemption planning become important as you want to make sure you get to keep at least the allowed $2,000. In some cases, where the refund is due to certain qualifying credits, those portions might be excluded from consideration.

The specifics of each case will determine how and when you will be able to keep your tax refunds in bankruptcy. To know more, contact a Dallas bankruptcy attorney today.
<![CDATA[Are Filing Bankruptcy and Insolvency the Same?]]>Wed, 25 Jun 2014 19:17:08 GMThttp://t-plaw.com/blog/are-filing-bankruptcy-and-insolvency-the-same
are bankruptcy and insolvency the same
Bankruptcy and insolvency are very similar concepts. In many cases, being insolvent can often lead to someone filing for some form of bankruptcy. However, even though they are related, they aren’t necessarily the same, which can be confusing as both situations deal with your credit, finances and debt load.

Is Filing Bankruptcy Insolvency:

Not necessarily. Insolvency arises when the individual or business is unable to pay its bills and discharge its liabilities as they come due. This is typically due to either insufficient cash flow or insufficient assets. From a business perspective, this might mean the business is unable to cover debts, pay business expenses, or even pay employees. A person or business can be insolvent without the world knowing about it.
Personal or business bankruptcy results from the formal filing for bankruptcy, which is an order for relief or petition filed with the Bankruptcy Court declaring the business or individual to be bankrupt. Bankruptcy is a legal determination that signifies the party’s inability to pay debts owed to creditors. In Dallas chapter 7 bankruptcy, most of the debts go away by entry of the discharge, with the exception of things like taxes, student loans, etc. In chapter 13 bankruptcy, a super discharge is available, which discharges even more debts than a Plano chapter 7 bankruptcy, assuming the individual satisfies all the conditions of the repayment plan. Even in Texas chapter 11 bankruptcy, a business can restructure or even get rid of some or all of its debts.

Insolvency Leads to Bankruptcy:

In specific cases, insolvency can easily lead to bankruptcy. If the individual or business can be proven to be insolvent to the creditor, the creditor can force the individual or business into bankruptcy. In the US, the filing of the bankruptcy petition itself acts as a declaration of legal bankruptcy. There is not always a direct path that exists to transform insolvency into bankruptcy, but the inability of an insolvent individual or business to satisfy creditors or pay bills as they mature often leads to bankruptcy.  Lastly, bankruptcy is a common tool employed by an insolvent individual or business to stop collection lawsuits, garnishments or foreclosures.

To properly analyze your financial situation to determine whether your state of insolvency requires a bankruptcy filing, seek the help of a Dallas bankruptcy attorney today to discuss your options. Our office has flexible hours and offers free consultations.

<![CDATA[Multiple Bankruptcy Filings – Chapter 7 Discharge or Not?]]>Mon, 16 Jun 2014 14:28:14 GMThttp://t-plaw.com/blog/-multiple-bankruptcy-filings-chapter-7-discharge-or-not
chapter 7 bankruptcy Dallas
We recently had a client come in who previously filed for chapter 13 bankruptcy way back in 2006.  Eventually, his bankruptcy case was converted to chapter 7 bankruptcy and he received a discharge in 2011.  Unfortunately, his finances have deteriorated again and he’s looking into filing bankruptcy as an option.  Can he get another discharge or not?   

Discharge Limitations if He Files Chapter 7 Bankruptcy:

Just like any other uncommon situation in the bankruptcy world, the best place to look to solve his dilemma is the Bankruptcy Code itself.  The Bankruptcy Code is clear – in chapter 7 bankruptcy, whether it’s a Plano chapter 7 or Dallas bankruptcy case, Section 727 states that the court shall grant a Texas chapter 7 discharge unless:

  • ...the person filing bankruptcy has received a discharge in a chapter 7 case that was commenced within the 8 years before the immediate case was filed; or
  • ...the person filing bankruptcy received a chapter 13 discharge in a case that was commenced within the 6 year period before this case is filed.  

So, if he were to now file chapter 7 bankruptcy again, he will be eligible for another chapter 7 discharge so long as his previous case was filed more than 8 years ago.  If the prior discharge was for a chapter 13 case, he would only have to wait 6 years to file bankruptcy and be eligible for another chapter 7 discharge.   

If you have filed bankruptcy before and are unsure whether or not you are eligible for a bankruptcy discharge, make sure you contact a Dallas bankruptcy attorney to see what your options are.  

<![CDATA[Transferring Property Before Bankruptcy]]>Thu, 05 Jun 2014 15:27:05 GMThttp://t-plaw.com/blog/transferring-property-before-bankruptcy
bankruptcy attorney dallas tx
STOP!  Don’t do it!  A lot of our clients ask us whether or not they can simply transfer assets, such as cars, houses, etc. out of their names prior to filing bankruptcy as a way to keep those assets away from your creditors.  No matter the value of the property or size of the transfer, it isn’t a good idea and you should consult with a Dallas bankruptcy attorney prior to making any mistakes.  

Transfers of Assets Must Be Listed in Bankruptcy:

Even if you think you are doing something smart by transferring items prior to filing your bankruptcy, think again.  When you sign your bankruptcy paperwork, you make an oath that everything listed is the truth.  Various statements and schedules of the in your bankruptcy paperwork require you to disclose things such as assets, creditors, transfer of property, etc.  So if you transfer assets prior to filing bankruptcy and fail to disclose the transfers or the existence of the assets, your case could be in jeopardy.    

Transferring assets can cause major problems in your bankruptcy case.  Whether you file chapter 13 bankruptcy or chapter 7 bankruptcy in Texas, many unwanted results can occur.  For example, if you transfer a house to your son and fail to receive market value, your son could be facing a lawsuit from thechapter 7 bankruptcy trustee seeking the return of the house.  The typical look back period for problematic transfers is 2 years, but just because you’re outside the bankruptcy look back period doesn’t mean you haven’t violated similar state law provisions.  Lastly, transferring assets can even interfere with your ability to obtain a Dallas chapter 7 discharge if your intention was to defraud, hinder or delay your creditors.