Do Gun Trusts Need a Schedule A?

Occasionally, NFA gun trust customers tell me that they have read on the Internet or heard from a Class 3 dealer that an ATF Form 4 (transfer) application or Form 1 (manufacture) application will be rejected by the ATF examiner if the NFA gun trust does not include a “Schedule A.” This is only partially correct.

If an individual wants to title a Title II weapon, or NFA firearm, in the name of an NFA gun trust, the ATF needs a complete copy of the NFA gun trust and all amendments to the NFA gun trust to be mailed along with the ATF application. If an NFA gun trust does not specifically state that it includes schedules, or attachments to the trust, such as a Schedule A to identify all of the trust property or a Schedule B to identify the beneficiaries, then the NFA gun trust is complete without a “Schedule A.” On the other hand, if the NFA gun trust specifically states that it includes schedules, then the schedules necessarily form a part of the NFA gun trust. In other words, without the schedules specifically identified in the trust document, it is not a complete copy of the NFA gun trust.

Does a well-drafted NFA gun trust include a Schedule A? No, and for very good reasons. Most gun trusts include schedules as part of their NFA gun trust, such as a Schedule A to identify all of the trust property. Such a practice has two primary disadvantages. First, each time a person transfers property in or out of the NFA gun trust, the schedule must be amended. The better practice is transfer property in or out of the NFA gun trust using a separate assignment form, which is not part of the NFA gun trust. Second, the ATF needs a complete copy of the NFA gun trust each time you mail in a new application. Besides NFA firearms, other non-NFA firearms (Title I weapons) may be assigned to the NFA gun trust. If the NFA gun trust includes a schedule that identifies all trust property, the customer unnecessarily provides an organized, detailed inventory of each and every NFA firearm and non-NFA firearm assigned to the NFA gun trust. Why would this ever be a good idea? Finally, more and more frequently, Class 3 dealers mail the package of documents that form a complete application to the ATF on behalf of their customers. To do so, each time the customer buys a new NFA firearm, the Class3 dealer needs a complete copy of the customer’s NFA gun trust. If the NFA gun trust includes a schedule that identifies all trust property, the customer turns over, or broadcasts, a detailed inventory of each and every firearm to the Class 3 dealer, which, frankly, the Class 3 dealer has no reason to know about.  Also, once you turn over your NFA gun trust to the Class 3 dealer, you do not know whether additional copies will be made or stored online, who among the Class 3 dealer’s present or future employees have or will have access to the information, or to whom this information is or will be disclosed. Don’t get me wrong, I trust my recommended Class 3 dealers, but this is still a major security breach. On the other hand, if an NFA gun trust does not include include a schedule that identifies all trust property, the only trust property that the Class 3 dealer, the dealer’s employees, and any third parties to whom this information might be disclosed will know is owned by the customer is the specific NFA firearm(s) bought from the Class III dealer. It is a simple matter of privacy and security.

One of my favorite local Class 3 dealers sells its own in-house NFA gun trust form that includes a “Schedule 1″ to identify all of the trust property. This poorly written NFA gun trust, which they market as a “great example of a do-it-yourself option,” also includes several other provisions that I do not recommend. For example, one such provision provides that the beneficiaries of the NFA gun trust (usually the settlor’s wife or children) can unanimously agree to terminate the NFA gun trust at any time and force all of the trust property (usually the husband’s gun collection) to be sold or transferred to the beneficiaries, even while the settlor (usually the husband) is very much alive and well, and regardless of whether the beneficiaries (usually the settlor’s wife or children) are, in either the settlor’s or the trustees’ opinion, mature enough or responsible enough to lawfully use and possess the trust property (usually the husband’ gun collection). Another provision requires the trustees (usually includes the husband and wife) to allow the beneficiaries (usually the settlor’s children) full use of all trust property (usually the husband’s gun collection), even while the settlor (usually the husband) is very much alive and well, and regardless of whether the beneficiaries (usually the settlor’s children) are, in either the settlor’s or the trustees’ opinion, mature enough or responsible enough to lawfully use and possess the trust property (usually the husband’s gun collection).

I have received several inquiries from individuals who were very uneasy about the quality, or lack thereof, of Texas NFA gun trusts prepared by others after reviewing the information on my website. These customers regularly express to me that they wish they had contacted me on the front end, as it would have saved them time, money, and grief.

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!