Gun Trusts: Get Yours Before the Rules Change!
If you want to own a suppressor (a silencer) or any firearm regulated by the National Firearms Act of 1934 (“NFA”), you have to submit an application to the Bureau of Alcohol, Tobacco, Firearms, and Explosives. These items are serialized and the Bureau keeps track of who owns what. You submit your application on BATFE Form 4, along with your check for $200 to pay for the tax stamp. The application requires a fingerprint sample, a passport-style photograph, and the approval of the chief law enforcement officer in your community. Of course, the possession of the item has to be permissible under state law. Possession of suppressors is legal in Ohio, Kentucky and Indiana.
Huntertown Arms “Guardian” on an HK P9s.
For people in many communities, however, getting the approval of local law enforcement was a problem. While suppressors have many advantages in terms of hearing protection, reduced recoil, and diminished disturbance of game, many law enforcement officials saw suppressors as the tools of assassins in Hollywood movies and refused to sign applications submitted for their approval. Enter the “gun trust.”
A trust is a relationship where one person—the Trustee—holds property for the benefit of another person—the Beneficiary. The person who creates the trust is usually called the Grantor. Trusts have been around for centuries. People use them for a wide variety of purposes, to provide for children or people with special needs, for charitable reasons, to facilitate the transfer of assets at death, etc. A trust can also be created to take ownership of NFA items and firearms—the “gun trust.”
In a gun trust, the Grantor creates the trust and transfers the NFA items to it. The gun trust becomes the legal owner of the NFA item. The document that creates the trust will name the Trustee and the Beneficiaries. The Trustee and Beneficiaries are lawfully permitted to possess and use the items owned by the trust.
The gun trust was useful in the past primarily because the approval of the chief law enforcement officer was not required. But even if your local Sheriff or Chief of Police is willing to approve a Form 4 submitted by a law-abiding citizen, the gun trust still offers several advantages compared to the purchase of an NFA item.
On an administrative level, the gun trust dispenses with some of the red tape associated with an individual application. With a trust, for example, no photographs and fingerprints need be submitted. More importantly, the gun trust protects your family in the event of your untimely death. For example, if a person who lawfully purchased a suppressor later dies, the spouse or roommate could be deemed to have “constructive possession” of the suppressor in the house because they have “dominion and control” over it. The BATFE calls such people “accidental felons.” Possession of a suppressor without a tax stamp is a felony punishable by up to ten years imprisonment.
A gun trust enables you to avoid that risk. Gun trusts should be created with multiple beneficiaries so that the “survivor” who “constructively possesses” the NFA item will be possessing it legally. The Beneficiary can then decide whether to dispose of the item legally by transfer or otherwise. In the alternative, the gun trust can be amended to adapt to the change in circumstances.
All that said, the rules are changing. Last month, President Obama announced his plan to implement gun control measures using his executive powers. One of those measures was the promulgation of “Rule 41F” by the BATFE. This Rule becomes effective on July 13, 2016. Without attempting to recite the 248 pages that appeared in the Federal Register, suffice it to say that Rule 41F makes some significant procedural changes.
Rule 41F creates obligations for “Responsible Persons” under the trust. A Responsible Person is broadly defined to include any person who has a right to possess the NFA item. Since possession is the whole purpose of the gun trust, the Grantor, the Trustee and all the Beneficiaries will likely be deemed “Responsible Persons” under the Rule. After July 13, 2016, when a gun trust acquires an NFA item, each Responsible Person in the trust will be required to do the kinds of things that individuals must now do: submit fingerprint cards, photographs, etc. While the approval of the chief law enforcement officer will no longer be required, the Responsible Person must still give that officer a copy of the application.
The good news is that Rule 41F is not retroactive. Any application that is approved—or pending at BATFE—before July 13, 2016, will be grandfathered in under the former rules. Accordingly, if getting a suppressor or NFA item (pre-1986 automatic weapon, short-barreled rifle, etc.) is on your bucket list, now is the ideal time to get a gun trust and put that plan in motion.
There are gun trusts that are offered for sale on the internet. Be wary. There’s a reason they publish a small-print disclaimer along the lines of “GunTrustsЯUs does not offer legal advice, recommends you consult an attorney, and will not be responsible for the use of this form by any person.” For example, most of these online purveyors will claim “Valid in All 50 States.” Really? Good luck trying to use your gun trust in the 11 states that prohibit private possession of a suppressor. If there’s a state law that’s the same in all 50 states, I don’t know what it is; but I’m willing to bet it has nothing to do with gun trusts.
So recognize that the gun trust is an important legal document that will protect you, your family, and your significant investment in NFA items. This is not the place to cut corners with a generic, one-size-fits-all document prepared by someone you’ll never talk to.
If you would like more information about these issues, please contact Scott Thomas. Scott has helped firm clients create and revise gun trusts tailored to their needs. He welcomes the opportunity to work with you to protect your NFA item. His direct line is 859.578.3862. You can email him at [email protected]. If there is a particular topic you would like to see addressed in a blog, please send Scott an email with your ideas.