Story by Alex Kincaid • Photographs by Oleg Volk
[su_dropcap style=”flat” size=”5″]A[/su_dropcap]fter the new ATF rule affecting gun trusts was signed into law on January 4 2016, I quickly turned to my newly published book, Infringed, to see how much of the information would now be out of date. I devoted several chapters to explaining the possession and transfer of National Firearms Act (NFA) firearms and the benefits of gun trusts.
After reviewing all of the chapters with gun-trust specific information, I smirked to myself. Only one paragraph out of the entire book would need to be updated. Like much of the current gun-control measures, the new gun-trust loophole rule doesn’t accomplish much except to cause spontaneous, enthusiastic applause from those who believe the rhetoric.
A new mandate titled Rule 41F is going to take effect on July 13, 2016. This rule will make changes to the current laws surrounding National Firearms Act guns in gun trusts and the new paperwork required to transfer them.
It was asserted that Rule 41F will prevent gun violence, because it will require background checks “for people trying to buy some of the most dangerous weapons and other items through a trust, corporation, or other legal entity.”
The problem is, every person who uses a trust to purchase a firearm has always – even before this new rule – undergone a background check by completing Form 4473 at the dealer’s office
The problem is, every person who uses a trust to purchase a firearm has always – even before this new rule – undergone a background check by completing Form 4473 at the dealer’s office, just as with every other gun purchase in America. It is also worth noting that criminals do not create gun trusts or submit paperwork to the ATF to purchase a firearm. Even more, in a properly drafted gun trust, the trust terms specifically prohibit the transfer of firearms to anyone who is prohibited under federal, state or local law from possessing a firearm. In fact, one of the primary reasons I draft gun trusts for my clients is to help gun owners and their families obey the gun laws by working within the confines of our government’s parameters.
The “most dangerous weapons” referenced by the current Administration are firearms subject to the NFA – silencers, short-barreled rifles and shotguns and fully automatic firearms, to name a few. These firearms are rarely used by criminals. The mass shootings that have supposedly prompted this new rule did not involve NFA firearms.
Why doesn’t the new rule affect crime?
Because it targets law-abiding Americans, not criminals. Contrary to the proposed assertion that Rule 41F only succeeds in imposing a new tax burden on working Americans to the tune of at least $5.8 million a year, and imposing more bureaucracy on law-abiding citizens who wish to acquire NFA firearms, lawful purchasers of these items will now need to submit even more paperwork – photographs and fingerprints – to the ATF and yet more to local law-enforcement agencies – a notice that they are attempting to purchase an NFA firearm. All of this is in addition to the special ATF forms requiring personal information and undergoing the regular NICS background check, which has always been standard.
Targeting law-abiding citizens to effect gun control is not new. When Congress passed the NFA in 1934, it did so with the intent to tax certain firearms so they would be unaffordable. The authorities knew the criminals would not register their firearms. Instead, they intended to make the purchase of certain firearms so expensive, due to the new tax, that the average American could not afford to purchase them. In 1986, another law affecting citizens was passed – the Firearm Owners Protection Act (FOPA) completely banned civilians from possessing or transferring machine guns manufactured after 1986. This law was passed even though approximately 175,000 machine guns were in circulation at the time, and not a single one was linked to criminal activity. The new law, however, made the limited machine guns that could still be possessed and transferred unaffordable for most. Despite the inconvenient effects of Rule 41F, rest assured that the rule does not affect the heart and soul of gun trusts. It does not change the primary reasons for creating a trust to hold your firearms. The rule only creates an inconvenience that should prompt you to create a gun trust and purchase NFA firearms prior to the rule’s effective date of July 13, 2016.
The ATF has not weighed in on their interpretation of Rule 41F. This means that the laws are still not fully understood or in place.
Why do gun owners create gun trusts?
A gun trust is a special type of trust that is designed to hold all of your firearms and firearms-related accessories. Gun trusts make it much easier for your loved ones to handle your firearms should you become incapacitated or die, boosts your ability to share and transfer NFA firearms and helps ensure all state and federal laws are followed.
Gun trusts have become the planning tool for gun owners whose collections include NFA firearms. One of the primary reasons is the ability to share possession of the NFA firearms with other trustees. Unlike other firearms, unless restricted by your state’s laws, NFA firearms can only be possessed by the person to whom the firearm is registered. There is no exception for family members or other people with whom you live. If you leave your NFA firearm at home where it is accessible to other people, you and the other people in your home are violating federal law.
Most NFA gun owners are aware of this gun-trust benefit. But many gun owners are not aware that gun trusts are important tools for all gun owners, whether or not a collection includes NFA firearms.
Gun trusts are important for all gun owners, because they prepare you and your loved ones for your death and incapacity by responsibly addressing your firearms and keeping your affairs out of the court system. Planning for the possibility that you will be incapacitated (whether from age or accident), even if temporarily, is important for everyone. It is even more important for gun owners, because if you don’t plan, then government has a plan for you. The government’s plan is a public, expensive, judge-controlled system that will take away your right to own a firearm.
All gun owners should try to avoid the court system if they are incapacitated or die by creating general estate planning documents and a gun trust.
One of the primary reasons to have a gun trust is the ability to share possession of NFA items such as this AWC silencer. (AWC SILENCERS)
What does a properly drafted gun trust look like?
When properly written, gun trusts are powerful asset protection and estate planning tools. A well-drafted gun trust will achieve the following for the gun owner who creates the trust:[su_box title=”” style=”glass” box_color=”#5d889a” title_color=”#ffffff” radius=”4″]
1) Ensure that friends and family can lawfully possess and transfer trust-owned firearms during the gun owner’s lifetime;
2) Create a private plan that completely avoids the court system for all firearms if the gun owner becomes incapacitated or dies;
3) Assists gun owners in sharing NFA firearms with other law-abiding gun owners;
4) Helps the successors and heirs understand the gun owner’s desires related to all the trust-owned firearms;
5) Helps the ones you care about to comply with firearms laws when they possess or transfer the firearms;
6) Assists the gun owner to own firearms in more than one state; and
7) Ensures that neither gun owner nor any loved ones commits an accidental felony. All of these gun-trust benefits are not affected by Rule 41F. [/su_box]
How Will Rule 41F Affect Gun Trusts?
A $200 tax stamp is required when transferring any NFA-categorized firearm or instrument.
Rule 41F only affects gun trusts that will hold NFA firearms. If your trust holds or will acquire NFA firearms, know that anyone who is listed as a responsible party of the trust will need to provide additional information for the government registry.
All questions about the new rule cannot yet be answered. This is because the ATF will be issuing further guidelines in the future. These guidelines will explain the ATF’s interpretation of Rule 41F. Until these guidelines are issued, some questions about how Rule 41F will affect trusts remain unknown. For now, we know the following:
If your gun trust was prepared by my office, we may suggest a few revisions, but your gun trust is still a great tool and will not be invalidated by the new rule. Under Rule 41F, the only responsible parties in our trusts are the trust’s current trustees and the grantor (creator) of the trust. We are creating a method (and waiting for the ATF guidelines) to make the future acquisition of NFA firearms as seamless as possible for our clients. We will be updating you with more direction as soon as we believe the advice to be solid and unchanged by the new ATF guidelines.
♠ If you do not have a gun trust, now is the time to get it done and submit paperwork to the ATF for any NFA firearms you have been hoping to acquire. If you submit the paperwork prior to July 13, 2016, you will not need to submit an extra set of fingerprints or a photograph, or send a notice to your chief law enforcement officer (CLEO);
♠ If you acquire NFA firearms after July 13, 2016, you will need to submit a photograph, fingerprints and a CLEO notice, but you do not need to update the ATF when adding more trustees to your trust (responsible parties) after you receive your tax stamp. So, if you create a trust and submit an application to acquire these “most dangerous weapons” prior to the rule taking effect on July 13, then you will not need to provide additional information unless you make another purchase after adding responsible parties to your trust. There is no need to update the ATF when adding responsible persons (more trustees) between applications.
♠ My colleagues and I are actively working on materials to update trusts, advise if your trust needs to be updated, and provide future guidance on utilizing a gun trust.
♠ If you have a trust provided by a gun shop or an online form, we can assist you in reviewing your trust to determine if any changes need to be made. For people who purchased an NFA trust from a gun shop or someone who isn’t a lawyer, you are likely in need of a lot of assistance.
In summary, the undesirable affect on most individual gun owners of the proposed rule is that anyone considered a responsible person on a gun trust must submit a photograph, fingerprints and send notice to law enforcement to receive or make an NFA firearm.
Sharing the possession of NFA firearms through a gun trust remains a wonderful benefit of a properly drafted trust. However, our gun trusts are designed to provide this benefit and so much more: They are legal gun safes that will alert unknowledgeable citizens and attorneys to the restrictions on the transfer and possession of firearms, they outline a plan for the gun owner’s death and also for the gun owner’s incapacity, and they create a dynasty trust for the gun owner’s children. ASJ
Posted in Industry Tagged with: Alex Kincaid, Gun trusts, Legal Gun trusts, NFA, Oleg Volk, Rule 41F