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  • Cody Fenton, JD

3 Important Reasons to Have a Gun Trust

What is an NFA Gun Trust and why should you consider one? Before that question can be answered, it's important to have a basic understanding of what NFA firearm ownership entails.

Firearms and the National Firearms Act

There are two classifications of firearms that can be legally owned in the United States. First, Title 1 firearms include long guns (rifles and shotguns), handguns, and frames or receivers. There are several requirements to being able to legally own a Title 1 firearm, and if you meet those requirements you can go to any licensed gun dealer in your state to purchase a Title 1 firearm. The second classification, Title 2 firearms, includes machine guns, sound suppressors (silencers), short barreled shotguns, short barreled rifles, destructive devices and "any other weapons," as defined in the National Firearms Act.

NFA firearms, also known as "Class 3 Firearms," are heavily regulated by both federal and state law, and must be purchased from a Class 3 Dealer. In order to purchase a NFA firearm, a person must complete all necessary NFA applications and paperwork, pass an extensive background check, pay a $200 tax for each NFA firearm purchased (also known as a "tax stamp"), and register with the NFA registry maintained by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). In addition, when submitting the application and paperwork, you must also submit two passport style photos and two fingerprint cards.

Implications of Rule 41F

On January 4, 2016, the Attorney General signed ATF Final Rule 41F, which amended the regulations for the purchase and transfer of NFA firearms. With respect to legal entities and trusts, Rule 41F defined who is considered a "responsible person," and requires that all persons who are deemed to be responsible persons to submit to the extensive background check, submit two passport photos, and submit two fingerprint cards.

In addition, responsible persons, must submit all necessary NFA forms as well as a Responsible Person Questionnaire Form (Form 5320.23). Finally, Rule 41F replaced the Chief Law Enforcement Officer (CLEO) certification requirement with the CLEO notification requirement. Now, the applicant and all responsible persons must forward a copy of the completed application to the CLEO of the locality in which the applicant, responsible person(s), or transferee is located.

NFA Gun Trusts and You

So what is a NFA Gun Trust and how can you benefit from having one? An NFA Gun Trust, like any other trust, is established to hold title to assets and to assist with transferring assets, in this case NFA firearms. An NFA trust must meet the requirements of a regular trust, in that it must have a grantor, a trustee, and a beneficiary. With respect to the trustee(s), and in some cases the beneficiaries, this person or persons will be considered responsible persons and must complete the requirements mentioned above.

How you set up the trust and what power and authority you give to those named in the trust will determine who is a responsible person.

Advantages of the NFA gun trusts are as follows:

  • Privacy with respect to ownership of NFA firearms;

  • All persons named in the NFA gun trusts are entitled to use and lawfully possess the NFA firearms acquired by the trust;

  • Trustee(s) and successor trustee(s) have the power to transfer NFA firearms without worrying about violating the law (assuming the trustee(s) or successor trustee(s) complies with all transfer requirements).

If you are interested in acquiring a NFA firearm and think that a NFA gun trust might be for you, you should contact a local attorney knowledgeable in this area of the law. Working with an attorney who is knowledgeable on NFA gun trusts can help to ensure that your wishes are being carried out, that all federal and state laws and regulations are being complied with, and that you and your loved ones are able to lawfully possess and enjoy NFA firearms.

If you have any questions about NFA gun trusts or other matters, please feel free to contact us.

*This article is intended for information only and is not intended to be construed as legal advice. The choice of a lawyer is an important decision and should not be based solely upon advertisements.

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