A NFA trust (also known as a gun trust, Title II trust, ATF trust, or Class 3 trust) is a legal trust that is used in the United States to register and own NFA firearms. A NFA trust allows prospective purchasers of NFA items to avoid some of the federal transfer requirements that would otherwise be imposed on an individual. Like other trusts, it allows for estate planning in inheriting firearms. In 2013, the ATF proposed new rules, often referred to as ATF Proposed Rule 41p, which, if adopted, would require all “responsible persons” of an entity being used to purchase NFA items to comply with the same procedures as individuals in obtaining NFA items. In an NFA trust, a responsible person is defined as “any grantor, trustee, beneficiary, … who possesses, directly or indirectly, the power or authority under any trust instrument, … to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the entity.” The ATF finalized the rule on January 15, 2016, to become effective six months later. The previous requirement for a “chief law enforcement officer” approval was eliminated, while all trust beneficiaries must now comply with the same restrictions as individual owners. Each day, the Bureau of Alcohol Tobacco, Firearms and Explosives (BATFE) approves applications for NFA firearms made by trusts. Our NFA Trust has become the solution of choice because it is designed particularly to protect gun owners and their loved ones.
Other legal entities, such as a corporation, require payment of fees to create them and annual fees and reporting to maintain them. Corporations must often submit their own tax filing even if they have no income. If you ever dissolve the corporation, NFA firearms owned by the corporation must be transferred to a new owner, and each transfer would be taxed.
One of the greatest dangers of personally owning NFA firearms is the legal restriction prohibiting anyone from handling your firearms outside your presence. If you ever had an emergency, no one could help you without facing serious legal risks. Under the legal doctrine of constructive possession, no one else may even have the opportunity to gain access to your NFA firearms. Practically speaking, this means your spouse would not be allowed to know where you hide the key to your firearms cabinet. Also, we believe estate planning is the most overlooked aspect of firearms safety. If anything happens to you, NFA firearms could create serious legal problems for loved ones who don’t understand the law.
As the Settlor of the Trust (sometimes called ‘grantor’) you may change, amend, or revoke your Trust, and you may add or remove Trust property. As life evolves and relationships change, your Trust can adapt to your needs. Your NFA Trust consists of an extensive package of documents prepared by Attorneys. It is a user-friendly solution, so you may best decide how any changes should be done in the future. You will not be forced to pay an attorney to change or maintain your trust. For those who do prefer a professionally drafted amendment to their Trust, attorneys provide these services at discounted rates to their own clients.
Our NFA Trust has been designed to exceed the typical state laws governing trusts nationwide. Also, the variation in states’ laws concerning trusts is manageable because most jurisdictions use the Uniform Trust Code as a model for their legislation. When you do relocate, we recommend a review of your legal affairs by a lawyer licensed in your new home state.
While the NFA Trust ensures your wishes concerning inheritance are respected, our document package will also provide guidance to help ensure your firearms are handled in a lawful and safe manner. For this reason, we recommend you use the NFA Trust to provide estate planning for your entire firearms collection. The Attorneys have designed this benefit mindful of your privacy. Your estate planning will not unnecessarily disclose the details of your trust property, and we can help you keep your firearms collection out of the probate court system.
Through your personal consultation with Attorneys, we will identify others who may lawfully handle your firearms if you are incapacitated, and someone to ensure you are protected. For example, if you’re hospitalized with mounting hospital bills, your ‘successor trustee’ may sell all or some of your trust property to support you. Equally important, your firearms will be safe, and the person(s) protecting your firearms will not be at risk of violating the National Firearms Act.
According to BATFE policy, you may use your NFA Trust to submit BATFE Form 1 to manufacture an NFA firearm or Form 4 to purchase one. In doing so, you will not be required to obtain the signature of your local Chief Law Enforcement Officer (CLEO) or to provide your fingerprints and mug shot. When answering the form’s request for the ‘maker’ or ‘transferee’, you will identify yourself in the capacity of Trustee of your Trust, and you will attach a copy of your Trust. Each day, BATFE approves numerous applications using trusts in this manner. You and your loved ones will also enjoy the benefit of Our NFA Trust user’s guide. For years to come, it will be a useful reference to help you manage your trust and use if for safe and lawful firearms ownership.
No. A Class 3 license is required for a gun dealer who sells you an NFA gun. If you are eligible to own an NFA gun, you may submit either BATFE Form 1 or 4 to obtain permission from BATFE.
Many of our clients already own NFA firarms, and they transfer their existing NFA firearms to their NFA Trust to enjoy the benefit of the risk management and estate planning offered by our services.
Your own revocable trust does not have a separate tax ID number. Any tax issues related to your trust would be addressed in your own personal tax filing just as they would if you did not have a trust. If your firearms often do not create tax issues for you, they are unlikely to do so once you create your trust.
One of the greatest dangers of using a flawed trust for NFA firearms ownership is the possibility of having a false sense of security. When BATFE approves your transfer application, they’re not declaring your trust legally valid. In fact, if a firearms owner or his heirs later discover his trust was never properly created, BATFE could penalize them for unauthorized ownership of NFA firearms. An attorney will ensure your trust is legally valid. If your attorney doesn’t fulfill his professional duty to you, he will be held accountable. Conversely, if your firearms dealer provides or recommends a trust, he is committing the crime of practicing law without a license. You will have no recourse if he provides you bad advice, and his own insurance will not cover legal malpractice. Generic trusts, do-it-yourself kits, or anonymous comments on the internet are inherently risky. Trusts typically found online are not designed specifically for firearms ownership, and they offer insufficient protection of your privacy, safety, or control over firearms. Furthermore, defects or faults in a DIY, dealer or form trusts are not revealed upon BATFE transfer application approval. Again, when the BATFE approves your transfer application, they’re not declaring your trust legally valid. Unfortunatley, these deficencies most frequently come to light as soon as you learn of criminal liabilities for violating firearms laws. Protect yourself and your family from unintentional violations of the NFA with an expertly custom-drafted gun trust from your attorney from North Carolina Gun Trust.
