NFA Gun Trusts

Written by: Wills, Trusts & Estate Administration

Under the National Firearms Act (“NFA”), there are 6 classes of weapons that are much more heavily regulated than traditional firearms (‘traditional’ firearms being:  revolvers, semi-automatic pistols, shotguns and rifles).  These six highly regulated classes are: (i) short barrel/sawed off rifles [‘SBRs’], (ii) short barrel/sawed off shotguns, (iii) fully automatic/select fire rifles [machine guns], (iv) suppressors [‘silencers’], (v) destructive devices and (vi) those falling under the “any other weapon” (AOW) classification [‘e.g. cane guns’]. These six categories of weapons are generally referred to as Title II weapons (sometimes referred to herein as an “NFA item”).

Unlike traditional firearms, for which no “registration” or “permit” is required for ownership, it is illegal for any person or entity to own a Title II weapon which is not registered in the NFA registry[1].  Additionally, transfers of such weapons must be approved and documented by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE), commonly termed the “ATF”.

(It is interesting to note that in April of 2014 Georgia passed comprehensive gun legislation, authorizing the use of suppressors [silencers] for hunting. Alabama followed suit shortly thereafter.  However, notwithstanding these state law provisions, suppressors are still governed by Federal law, and thus, the acquisition of a suppressor must still comply with BATFE requirements under the NFA.)

Many owners of Title II weapons purchase and own the items in their individual name.  This is permissible, even common, but can create problems upon the death of that person.  If an unauthorized transfer occurs at death, it is a felony and can carry a 10 year prison sentence and a $250,000 fine.  Additionally, if owned in one’s individual name, no other person may be in possession of the NFA item; however, using a NFA Gun Trust can allow for multiple “owners”.

The process to obtain a Title II weapon is to (i) file an application with the BATFE, (ii) submit fingerprints, (iii) submit a photo ID, and (iv) have the chief law enforcement officer (“CLEO”) of your county sign off on the application.  In some jurisdictions, this last requirement is difficult to near impossible, resulting in an effective ban on ownership of such weapons.

Prior to amendment of Rule 41f by the BATFE, the legal  way ‘around’ this cumbersome process was to create a NFA Gun Trust, also known as an  “NFA Trust”, or “Title II Gun Trust.”  After the amendment to Rule 41f in 2016, these requirements now also apply to Trustees of a Gun Trust, although a Gun Trust still provides numerous advantages over direct individual ownership.

The benefits of an NFA Gun Trust range from the control and eventual disposition of your weapons, estate planning benefits, having multiple authorized owners or users, and other benefits.  It is permissible for your NFA Gun Trust to own non-NFA firearms, though it is not required. Placing such non-NFA firearms in your NFA Gun Trust does not operate to “register” those non-NFA firearms, and there is no required filing or disclosure for the same.

Gun Trusts are not a “one size fits all”, and each trust should be specifically tailored to the needs of the owner.  Many of the provisions that will go in a Gun Trust are specific to Gun Trusts, and not found in traditional trust documents. (In other words, a traditional trust will generally NOT work as a Gun Trust.)  Your Gun Trust should be drafted by a competent attorney, experienced with Gun Trusts, as improper structure can subject the trust Grantor and the Trustee(s) to massive civil and criminal liability identified above.

[1] If an NFA weapon has ever been transferred “outside” of the NFA procedures, it is generally not curable.  Thus, if you have a custom built firearm or devise that falls under the NFA, or for example Mac-10 you acquired back when they were a hot item in the 1980s, or a self-built suppressor, and such item is not registered with the NFA, or has been transferred outside of such registry, its ownership is illegal.

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