Recently a few of our clients have had questions about whether they need a “Gun Trust.” The Law Offices of Paul R. Poulsen has experience implementing NFA Gun Trusts. Most law firms have never heard of an NFA Gun Trust, let alone ever drafted one. If you want to know more about NFA Gun Trusts please contact The Law Offices of Paul R. Poulsen at 801.763.9293 or online at www.prplaw.net
What is an NFA Gun Trust?
NFA Firearms (also called Title II Firearms) are guns and other items regulated by the National Firearms Act (the “NFA”). The NFA regulates the sale, use, possession, and transfer of machine guns, short-barreled shotguns and rifles, silencers, destructive devices, and AOWs.
Individuals, business entities, and trusts are permitted to purchase NFA firearms if allowed by state law. To obtain permission to transfer or make these items, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (the “BATFE” or “ATF”) requires completion of a Form1 or Form 4 along with payment of $200 for a tax stamp.
An NFA Gun Trust is an entity created to own NFA Firearms.
Why have an NFA Gun Trust?
· No CLEO Signature Required
The ATF requires that all individuals obtain approval from their Chief Law Enforcement Officer (the “CLEO”) as part of the application process to obtain a Title II firearm from another individual or Class 3 dealer. If using an NFA Firearms Trust to purchase a weapon, the Form 4 does not require the CLEO’s signature.
· No Fingerprints or Photographs are Required
When using an NFA Firearms Trust to acquire Title II firearms, no fingerprints or photographs are required. This is a cost savings and can also significantly decrease the time required to take possession of the items.
Individuals who submit their ATF forms to their CLEO are often concerned about who will have knowledge of their firearms. They also express concerns that they will come under additional scrutiny because the police will have knowledge that they are in possession of these more restricted firearms. With an NFA Firearms Trust, neither the CLEO nor the police are given notice that you will be in possession of or own the NFA firearms.
If you become incapacitated your family or friends are the ones who step forward to help you. In doing so, they may come in contact with the restricted items and put themselves at risk of violating the NFA without knowledge. An NFA Firearms Trust helps protect these individuals from violating the NFA by providing them clear instructions on what they are and are not permitted to do.
When you die your individually owned firearms may be part of your “probate estate.” Probate proceedings may be necessary to transfer your guns under your will or to your heirs and are part of the public record. Since a family member or a friend usually handles probate proceedings, it is important not to unknowingly place them at risk of violating the NFA. With an NFA Firearms Trust, your firearms are not subject to probate or public record. Your beneficiaries will be protected because they will receive guidance on how and under what circumstances the items can be legally transferred to others. If you have children, an NFA Firearms Trust has specific provisions to protect them and make sure they do not receive the property if they live in a location where it is illegal to possess NFA firearms, and most importantly they are mature and responsible enough that you would want them to have the firearms.
· Co-owners and Authorized Users
If you use an NFA Firearms Trust to purchase Title II firearms, you can designate additional owners and authorized users. You can eliminate the risk associated with an improper constructive possession with a simple signature authorizing that person to be in legal possession of the items. This can help protect you and your family from the penalties of violating the NFA.
· Reducing Risk of Legal Changes
Many groups are attempting to limit the ability to transfer firearms to their family or friends. With an NFA Firearms Trust an adult child, family member, or friend can be made a co-owner of the trust. While the ownership of the NFA Firearms Trust can be changed, the NFA Firearms Trust is still the registered owner of the firearms and no transfer has taken place under the NFA.
· Penalties for Violating the National Firearms Act can be Severe.
Each violation of the National Firearms Act subjects the owner to forfeiture of all weapons, 10 years in prison, and fines of up to $250,000. An NFA Firearms Trust provides guidance to the creators, managers, and beneficiaries of the trust to help them avoid violating the NFA.
THE LAW OFFICES OF PAUL R. POULSEN IS A LAW FIRM WITH A FOCUS ON ESTATE PLANNING. PLEASE CONTACT US FOR A FREE CONSULTATION.