A growing number of shooting enthusiasts are creating legal trusts to acquire machine guns, silencers or other items whose sale is restricted by federal law — a mechanism that bypasses the need to obtain law enforcement approval or even undergo criminal background checks.
The trusts, called gun trusts, are intended to allow the owners of the firearms to share them legally with family members and to pass them down responsibly. They have gained in popularity, gun owners say, in part because they may offer protection from future legislation intended to prohibit the possession or sale of the firearms.
Until July 13, 2016, the current (i.e. old) rules are in effect. You can set up a trust and transfer your firearms into it with minimal paperwork. To use the old rules, your transfer application (Form 4) or making application (Form 1) must be postmarked by Tuesday July 12, 2016. We do not suggest pushing off your purchase for this long, but if you do, be sure to send the paperwork via certified mail so you can prove when it was sent and received.
July 13th and Beyond
Trusts will still be able to buy or make firearms (including suppressors) after July 12, 2016. However, applications submitted on or after the 13th of July will require additional documentation. While this will not prevent you from acquiring new firearms, we certainly realize that the inconvenience may warrant going ahead and purchasing firearms prior to July 13, 2016.
New Forms and Paperwork for Transfers
For all transfers on or after July 13th, including making applications, every “responsible person” (to be discussed in a later post) will have to submit:
- a Form 23 including a 2″x2″ photograph of the “responsible person”; and
- duplicate FBI Forms FD-258 fingerprint cards.
These documents on the “responsible persons” will be in addition to the Form 4 (or other appropriate forms) and documentation necessary to show the existence of your trust. The photographs must be taken within the past year and show the bare head of the “responsible person.” Essentially, these are the same style photographs used for passports, and any passport quality photographs should suffice.
The FBI Form FD-258 fingerprint cards are the same fingerprint cards commonly used for concealed weapons permit. These can normally be acquired at a local police station, but many CWP instructors also complete these cards. Read more here.
- NFA Trust
- Schedule A to NFA Trust
- Certification of NFA Trust
- Letter to Bank to Open Checking Account in name of NFA Trust
- Appointment of Co-Trustee
- Acceptance of Co-Trustee
- Instructions for Distribution of Trust Property (NFA Weapon(s)) at time of death
How it works
First, you are going to meet with an attorney that is going to set you up with the necessary documents and instructions.
After the attorney, you are going to go to a bank and seed an account with whatever you feel necessary equal to (or beyond) the minimum. Expect to put in at least $10, though some banks may require more. You are going to fill in your Schedule “A” sheet with the bank information, which is the first property of the Trust and that is the basic requirement to stand it up, making it legal.
Next it is time to go buy your NFA Item. First, transfer the money to your Trust bank account. Then go to your favorite dealer, fill out the paperwork, and pay with the money in the Trust account (you want to set up a clear audit trail and provide some additional protection from “piercing the corporate veil“). You will also submit a COPY of all of your documentation to the BATFE (to include the bank account information).
Now you play the waiting game. You should expect your first submission to take a little longer than future transactions. That is because the BATFE is going to have to do a full review of the submitted documentation. And they are a bureaucracy. With normal people that have poorly funded departments and huge workloads and the stigma of their agency. I’m not defending the BATFE nor making excuses. You should just have an understanding of who, and what, you are about to form a relationship with and set your expectations accordingly.
One of two things will happen. You will be green lighted, the BATFE will send back a copy of your documentation with the tax stamp information filled in as the next line items on your Schedule “A”. You take that and put it into your binder in a sheet protector along with the rest of your documents (and DO NOT remove the old pages as your Trust is a living document). Congratulations. You now have a Title II item registered to your Trust. Follow the laws and have fun.
The other potential outcome is that you will be rejected. It could be an error in the organization documents. It could be the stars did not align the day it was reviewed. Whatever the reason is, it doesn’t matter–you just need to fix it if you want the Trust. If you went cheap and bought your documents off the internet, you may be hosed. You will probably have to consult a local lawyer to get the problem sorted out, which will likely involve redoing the documents from scratch (I don’t think many lawyers would take documents procured from the internet and then back them up). And, yes, you will likely have to start the several month waiting period again. If, on the other hand, you went the route of a consulting a local attorney, then great, you are a step ahead. You have an ally in your court that should stand behind the documents that were drafted for you. They may even have a relationship with the local BATFE office, and be able to set up a meeting to sort out the issues.
It is a good idea to carry a copy of your Organization Documents with your NFA items. Not all law enforcement personnel are versed in NFA issues and may take issue with your possession of an SBR or suppressor. Having your documentation on hand can go a long way to smoothing out any issues (though it may not entirely prevent them). For ease of carrying the docs, I would suggest scanning them in to digital format (any time you have a change to the documents), printing out a small copy (most printers will let you print several pages on a single sheet of paper, or you could have a local copy shop do it), and then having it laminated or in a sheet protector. Think of it like carrying your car insurance and registration when you are driving a car. Put it in your range bag, and update it as you make changes.
If any of you readers have experiences with setting up a Trust, either good or bad, please leave a comment below. The above represents my experience setting this up and working with a specific attorney (and thanks again to Keith Findlay for reviewing this article for accuracy); your experiences may differ (though I would hope not too much)…