Are NFA Gun Trusts Being Eliminated by the ATF’s Proposed Rule Change?

Over the last couple of months, several law-abiding gun owners have expressed their concern to me that they read somewhere on the Internet that gun trusts will be eliminated by the ATF’s proposed rule change. This rumor is absolutely false.

On the contrary, what will change after the proposed rule change goes into effect is the application process for an ATF Form 4 transfer or an ATF Form 1 manufacture for NFA firearms. In the past, the ATF has only required proof that a valid gun trust existed as part of the application process. This evidence was a complete copy of the gun trust.

Under the ATF’s proposed rule change change, the ATF will continue to require proof that a valid gun trust exists, i.e., a complete copy of the gun trust. However, the ATF is also going to require proof that each “responsible person” on a gun trust provide proof that they are entitled to possess firearms. Specifically, after the ATF’s proposed rule change goes into effect, the ATF will then require each and every settlor and trustee to submit fingerprints, photographs, and approval from the chief law enforcement officer in the settlor’s or trustee’s county of residence on a new ATF form that has not been published.

The problem is that it is unclear whether the chief law enforcement officer in the settlor’s or trustee’s county of residence will sign the ATF’s proposed new form. If not, then law-abiding gun owners in the chief law enforcement officer’s county will be prevented from exercising their constitutional right to own NFA firearms that are not prohibited by Federal, state, or local law merely at the whim of the chief law enforcement officer. Due to the addition of a local chief law enforcement officer approval requirement, the ATF’s proposed rule change (in its present form) appears to be designed to prevent law-abiding gun owners in many areas from owning NFA firearms, even if they are not prohibited by state or local law.

Because of this uncertainty, I strongly advise law-abiding gun owners who wish to acquire NFA firearms from a Class III dealer to establish a gun trust, purchase their NFA firearms (i.e., silencers, short-barreled rifles, and machine guns) in the name of their gun trust, and submit their ATF applications to transfer (ATF Form 4) in the name of their gun trust immediately. Similarly, I strongly advise law-abiding gun owners who wish to manufacture their own NFA firearms (i.e., short-barreled rifles) to establish a Texas gun trust and submit their ATF applications to manufacture (ATF Form 1) in the name of their NFA gun trust immediately. Better yet, piss off a liberal by buying and manufacturing as many as you can reasonably afford.

The mandatory 90-day comment period for the ATF’s proposed rule change ended on December 9, 2013. It is unclear when and in what form the ATF’s proposed rule change will be implemented. The ATF originally estimated that the final rule would be published in June 2014. Later, the target date was postponed to January 2015. Still later, the target date was postponed to May 2015. Recently, the ATF estimated that the final rule will be published in December 2015. However, if you wait until after the ATF’s rule change goes into effect, you may be sorry.

Even after the ATF’s proposed rule change goes into effect, it will still makes sense to title NFA firearms in the name of a gun trust. NFA firearms must be titled in the name of an individual or entity, much like other real property (land) and some types of personal property, such as cars, trucks, boats, and airplanes. If an NFA firearm is titled in the name of an individual, only that specific individual may possess it. One of the chief advantages of titling NFA firearms in the name of a gun trust, rather than in the name of an individual, is that more than one person may legally possess and use the trust property. Any person at least 18 years of age who can legally possess NFA firearms may be listed as a trustee of the gun trust and, thereby, legally possess the trust property, which is usually the NFA firearms assigned to the gun trust.

For a married couple, it almost always makes sense for an NFA firearm to be registered in the name of a gun trust. For example, suppose the husband owns a suppressor, which is legally registered with the ATF in his own name. The husband goes to work and leaves his suppressor at home. If the wife stays at home that day and could have access to the suppressor, she is committing a federal felony offense that carries a prison sentence of up to 10 years and/or a fine of up to $250,000. 26 U.S.C. §§ 5861, 5871; 18 U.S.C. § 3571(b). Further, the suppressor is subject to seizure and forfeiture. 26 U.S.C. § 5872. If convicted, the wife loses her right to own or possess any kind of firearms in the future. In addition, if the husband instead left the suppressor in the wife’s vehicle, the vehicle is subject to seizure and forfeiture. If the husband had simply registered the suppressor in the name of a gun trust and appointed his wife as a co-trustee of the trust, this situation would have been prevented. Additionally, the husband could appoint other individuals, such as friends and family who may legally possess firearms as co-trustees of the trust, as long as the other individuals agree in writing to be co-trustees.

Even if a person is single, it still makes sense to register NFA firearms in the name of a gun trust because of the built-in flexibility of being able to amend the trust throughout the person’s lifetime to add or remove additional trustees and beneficiaries as the person’s life and roles evolve (i.e., husband, father, grandfather, etc.). If the person registers NFA firearms in his own name and then decides later to title the NFA firearms in the name of a trust, the person will end up paying the $200 transfer tax (or whatever the transfer tax amount is at that time) for each NFA firearm to be transferred to the trust. This short-term thinking (registering NFA firearms in the name of an individual) could end up costing the person a large sum of money down the road. Further, all property assigned to the NFA gun trust passes to the beneficiaries outside of probate.

Would you like to have the peace of mind that comes with knowing that you received a high-quality, state-specific NFA gun trust drafted by a very experienced gun trust attorney who is recommended by some of the largest and most successful Class 3 dealers in the United States? Let’s get started!

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