NFA Gun Trust Lawyer BlogIf you are purchasing a silencer, SBR, SBS, AOW, or Machine Gun from another individual a dealer is not required unless your state requires a dealer for a normal firearm transfer of the same class. Most states allow individual transfers for normal firearms and Title II firearms. Its best to check your local state laws for verification on this issues. If you are doing an individual Form 4 transfer, you can follow the sample form 4 and instructions found on our How to fill out an ATF Form 4 page. The only difference is that the seller will put their information where the dealers information is on the sample.
Articles Posted in FAQ’s
How is a NFA Gun Trust Different than a Revocable Trust
A Gun Trust is different than a typical Revocable Trust. While it is possible to hold other assets in a NFA Gun Trust, we recommend that only firearms be placed in the trust. There is no reason to subject your other assets to the liability associated with the improper use, possession, or transfer of these items. No other trust begins to deal with the many unique issues of Title II firearms ownership, possession, transfer, and use. The NFA Gun Trust has been reviewed and modified by more than 75 Estate planning and/or Firearms law lawyers who are licensed in more than 40 states. Whether your goal is to purchase a single silencer or hundreds of Title II firearms, our NFA Gun Trust can be easily modified to address your specific issues.
There are many problems in using a traditional trust when dealing with firearms. Its not enough for a beneficiary to reach a certain age prior to distributing an asset like you would do with a couch, picture on the wall, or bank account. You must ascertain the geographic location of the beneficiary, determine whether the items are legal in that state, determine if the beneficiary is legally eligible to receive, own, or possess the items, and most importantly determine if the beneficiary is mature and responsible enough to be in possession of the firearms. We all know that one of the most important things with gun ownership is training. We would never hand a gun to someone without providing them instructions on how to use it, but that is exactly what we do when we use a traditional trust. In addition, we put our family members and friends at risk when they carry out the instructions in the trust because most trusts instruct the successor trustee to break them law, when holding, purchasing, or selling assets by not pointing out how these simple actions will violate the NFA and create criminal and civil liabilities for our family members. Above is only one of the many areas that illustrate why a traditional trust is not suitable for firearms, much less Title II firearms.
In addition to the many protections created for your family, a NFA firearms trust can help you acquire class 3 weapons without the need for fingerprints or CLEO sign off. Many CLEO’s are refusing to look at Form 4’s and/or Form 1’s.
Benefits of an NFA Trust
While there are many benefits of an NFA Trust, I am often asked for some of the main benefits. I have a list of 10 of the main benefits of an NFA trust. The benefits vary based on each individual’s circumstances but most of these apply to everyone.
1) The ability to tell your representatives how to properly transfer these assets upon your death;
2) The ability to transfer assets to children even below the age of 18 at a later time while giving the trustee the ability to look at the child’s mental state, physical location, and age in addition to whether the child is legally able to own, possess, or use the firearms;
Form 4 Approval Times Appear to be Decreasing Again
Prior to November, the time to approve a Form 4 was less than 8 weeks. After November 20th, the number of people purchasing NFA items significantly increased and as a result the time to receive an approval on their ATF Form 4 or Form 1 increased to more than 6 months at their peak (26+ weeks).
Today I received a note from a client who obtained his approved Form 4 for his SBS only 59 days after submitting it to the BATFE. Hopefully this will be the norm and not the exception. Please let me know how long your Form 4 or Form 1 is taking for approval.
What is the ATF’s Phone number in reference to Trusts or Transfers of Title II firearms
If you are wanting to contact the ATF to find out your status or check on a NFA firearms transfer to an individual, trust, corporation, or entity please call them at 304-616-4500.
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.
How do I stop or cancel a Form 1 or Form 4 that has not been approved by the BATFE?
How do I stop the ATF from finishing the approval process on a Form 4 or Form 1?
Either the buyer (individual, officer, or trustee) or the seller can call the BATFE @ 304-616-4500 with the serial number of the items, speak to the examiner, and withdraw the application. The fee may not be refunded but your should ask about it. Apparently it is taking 60 (as of June 2009) days to transfer the file to the examiners and they cannot be stopped until the file is in the hands of an examiner.
You might want to stop a transfer, or change the application if you know that the documents you submitted are incorrect, need to be modified, you are moving to another state, or something has changed in a way that you can no longer trust the other trustees.
BATFE and Seizure From Invalid NFA Trust
Last week there was an issue where an individual was contacted by the ATF in an effort to seize his Title II firearms because of an irregularity with his Trust. A Gun Trust Lawyer® reviewed, amended, and restated the trust in question, creating a valid and enforceable trust that deals with the unique issues of NFA Firearms ownership, transfer, and possession. The BATFE had a justifiable reason to pursue the forfeiture action and the original reports on the subguns forum were accurate. After discussions with the BATFE and presentation of a valid Trust the BATFE decided to cease and desist their forfeiture action at this time and the individual is no longer in jeopardy of having his items seized, being arrested, or being fined. The BATFE and individual have requested that the details not be disclosed. The BATFE does not want to jeopardize similar ongoing investigations involving invalid trusts. We can state that the issues involved with this action have been covered elsewhere on this website.
If you created a trust with Quicken or Legal Zoom, you should follow Legal Zoom’s and Intuit’s advice and have your trust reviewed by an attorney to avoid potential problems. The creators of these programs did not anticipate that individuals would be using the documents in situations that could result in criminal liability.
You may choose to have the trust reviewed to determine if the trust is valid, or reviewed to see if there are issues with the NFA that are not dealt with in your trust, but either way it is important to have your trust reviewed by someone who is familiar with estate planning as well as the NFA.
Possession of SBR by Photographer or Marketing Company
Recently I was contacted by a photographer who was hired to do product shots for a manufacture of short barreled rifles. They wanted to ship the firearms to the photographer so that he could photograph them in his studio. The photographer was concerned about violating the NFA.
Although dealers and manufactures have the ability to transfer these restricted items, individuals and other companies who are not licensed by the ATF must comply with both the federal and state laws in place regarding possession, transfer, and use of these firearms.
Your possession of the SBR would violate the NFA, and potentially state laws. When you ship the items back to the manufacture you could be violating state and federal firearms laws. Generally, in situations like this, it might be best to go to the manufactures site and do your marketing efforts at their location to avoid violating state and federal regulations on firearms.
ATF and Invalid Quicken Trust – ATF approves INVALID Trust
Joshua Prince a 3rd year law student has written an article on the BATFE approving an invalid trust. Apparently an individual on Silencertalk.com received back two approved Form 1’s and on the back of one of his forms it stated “Consult counsel w/ the filing of your trust, proves to be invalid”
There have been several articles on why Quicken should not be used for creating a trust including an article by Mr. Prince which applies PA law to some factors I found as well as Using Quicken to prepare a trust: The good, the bad, and ugly!
Josh contemplates that while the trust is invalid no transfer can take place and the the assets in the trust could be subject to a forfeiture action and anyone in possession could be subject to criminal charges for invalidly being in possession of a Title II firearm without properly transferring the firearm.