Who is a “Responsible Person” in a Gun Trust?

When law-abiding gun owners file new ATF applications on or after July 13, 2016, all “responsible persons” associated with a gun trust will be required to submit fingerprints and photographs, as well as notify the chief law enforcement officer in their jurisdiction that the gun trust is purchasing or manufacturing an NFA firearm.

Since the term “responsible person” is not used in trust law, the ATF has created a convoluted definition, which attempts to explain the meaning of the term by describing certain powers of individuals associated with entities, such as trusts, partnerships, associations, companies (including limited liability companies) and corporations. The instructions accompanying each new ATF application form will define it as follows:

Responsible Person.  In the case of an unlicensed entity, including any trust, partnership, association, company (including any Limited Liability Company (LLC)), or corporation, any individual who possesses, directly or indirectly, the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity. In the case of a trust, those persons with the power or authority to direct the management and policies of the trust include any person who has the capability to exercise such power and possesses, directly or indirectly, the power or authority under any trust instrument, or under State law, to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust. Examples of who may be considered a responsible person include settlors/grantors, trustees, partners, members, officers, directors, board members, or owners.  An example of who may be excluded from this definition of responsible person is the beneficiary of a trust, if the beneficiary does not have the capability to exercise the powers or authorities enumerated in this section.

In the gun trust context, the ATF has attempted to define a “responsible person” as an individual with one or more of the following powers: (1) the power to direct the management and policies of the gun trust, which normally includes the power to alter, amend, modify, revoke, or terminate the gun trust and the power to add or remove co-trustees; and (2) the power to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the gun trust.

Since the definition of “responsible person” is described by the power given to an individual associated with a gun trust, the proper identification of each “responsible person” in a gun trust will depend on how each gun trust is actually written.

For purposes of defining the term “responsible person,” well-written gun trusts have the following characteristics:

• A Settlor is normally an individual who has the power to direct the management and policies of the gun trust, including the power to alter, amend, modify, revoke, or terminate the gun trust and the power to add or remove co-trustees. In addition, some of these powers may also be provided to a trustee of the gun trust.
• A Trustee is normally, an individual who has the power to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the gun trust.
• A Beneficiary does not have any of these powers. However, a beneficiary can also serve as a trustee, in which case, that specific beneficiary would have the power to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the gun trust, because he or she is a trustee–not because he or she is merely listed as a beneficiary.
• Successor trustees do not have any of these powers. However, a successor trustee may begin serving as a trustee at some point in the future, in which case the successor trustee would, at that time, have the power to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the gun trust.  In other words, a successor trustee does not have these powers until he or she actually becomes a trustee.

In our gun trust, only settlors and trustees would be considered to be “responsible persons,” while beneficiaries and successor trustees would not be considered as “responsible persons.”

In many of the gun trusts that we have reviewed, the gun trust allows individuals who are not serving a trustees the ability to use and possess the NFA firearms held by the gun trust. This means that those individuals will also be considered “responsible persons” who must provide fingerprints and photographs and notification to their own chief law enforcement officer.

If you have a gun trust from another gun trust provider, we recommend that you either amend and restate your gun trust to upgrade it to our design or simply purchase a new gun trust from us before your next Form 1 or Form 4 filing. You can always keep the previously purchased firearms in that old, outdated trust, and make any new purchases using a trust that gives you control over the individuals who will be considered as “responsible persons.” We now have two options available to our customers. To create a new gun trust, click here. To amend and restate an existing gun trust, check here.

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!