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There are four benefits to creating a Gun Trust:
A Gun Trust is a legal document created to allow the ownership of certain firearms or other items that are regulated by the NFA, the federal law that governs the manufacture, possession and use of certain guns and gun accessories.
The Gun Trust is created by a person referred to as the Grantor.
Once created, the Trust files an application and pays a tax to the ATF to register the NFA regulated firearm. The Gun Trust cannot take ownership of the NFA regulated firearm (or transfer an NFA firearm) prior to the approval of the application by the ATF.
The Gun Trust allows the Grantor of the Trust, as well as those individuals named as Trustees, to lawfully use and possess the NFA regulated firearm. Anyone using or possessing an NFA regulated firearm or other item without proper registration with the ATF could be guilty upon conviction of a federal felony.
Example: A husband owns an NFA-regulated suppressor that fits on his concealed carry handgun. The husband has a concealed carry permit issued by his state, and the suppressor is properly registered in his name with the ATF. The Husband has the appropriate Tax Stamp.
Say the husband normally (and legally) leaves the suppressed handgun in his vehicle for his personal protection, but is driven to work by a colleague on a given day. If the wife drives the vehicle by herself not knowing that the NFA regulated device is in the vehicle, the wife could be violating federal law for having possession of that NFA regulated device without proper registration. She may be committing a federal felony offense, for which significant jail time could be required upon conviction!
However, if the husband had created a Gun Trust and properly registered the suppressor in the name of the Trust and listed both himself and his wife as Trustees of the Trust, his wife would not be subject to criminal prosecution under this example. She would be authorized by the Trust to use and possess that NFA regulated device.
Our Gun Trust is written so that the Grantor lists him or herself as the initial Trustee of the Trust. Our Gun Trust then gives the Grantor two option regarding Co-Trustees:
Here is why this option is available.
If the Grantor knows in advance who will be permitted to use, possess or borrow the NFA regulated firearm to be owned by the Gun Trust, the Grantor can choose to list those individuals as Co-Trustees in the Trust document. For example, if the Grantor wants his two sons (and only his two sons) to be able to use and possess the NFA regulated firearm, the Grantor can list his two sons as Co-Trustees in the Trust document. The two sons will be required to sign the Gun Trust and have their signature notarized. These two Co-Trustees will then be required to submit to background checks and provide information to the ATF (e.g. photo, fingerprint cards, information) as part of the firearm registration process. Once the ATF issues the Tax Stamp, both of these Co-Trustees (as "responsible persons") can use and possess the NFA regulated firearm.
However, if the Grantor does not know (or is not sure) in advance who will be permitted to use and possess the NFA firearm that will be registered to the Trust, the Grantor can simply indicate in the Gun Trust that there are no other Co-Trustees of the Trust. In doing so, only the Grantor would be required to sign the Gun Trust and have his or her signature notarized – and only he or she would need to submit personal information to the AFT as part of the registration process.
Then, after the gun trust is created and the application for registration for an NFA firearm is submitted to and approved by the ATF, the Grantor can add or appoint additional Co-Trustees to the Gun Trust. The new Co-Trustees would not have to submit any documentation to the AFT nor be subject to a background check. The ATF has published FAQ information that states:
Q: Will new responsible persons, added after the making or transfer, be subject to the same requirements?
A: Once an application has been approved, no documentation is required to be submitted to ATF when a new responsible person is added to a trust or legal entity. However, should a responsible person change after the application has been submitted, but before it is approved, the applicant or transferee must contact the NFA Branch for guidance.
The Grantor would use the "Appointment of Co-Trustee" form to name the Co-Trustees. This form is provided with the Custom Silencer Company Gun Trust. With this document, additional Co-Trustees are appointed without having to amend the Trust. The Grantor and the Co-Trustee simply sign this form and have their signatures notarized. And with this form, the Grantor can give the Co-Trustees the general authority to possess and use the NFA regulated firearm as is provided in the Trust document, or can provided a more limited/specific or short term access and right to use the firearm.
Of course, if the Trust desires to acquire a new NFA regulated firearms after the Co-Trustees are appointed, the Co-Trustees must provide the ATF with their personal information (and be subjected to a background check) when the Trust submits an application to register the new NFA firearm. Or, the Grantor can remove these Co-Trustee from the Trust prior to submitting an application to the ATF to register a new firearm and then add them back after the new application is approved – but during the time the application is pending, these individuals will not be able to use or possess the existing registered NFA firearm owned by the Trust (since they would no longer be Co-Trustees of the Trust and would not, therefore, be "responsible persons" under the NFA).
Note that if the Grantor chooses to name Co-Trustees after a firearm is registered to the Trust (so that these Co-Trustees are not required to submit information to the ATF and are not subject to the background check), the Grantor MUST ENSURE that none of the individuals are "prohibited person" (i.e. a person with a felony, a fugitive from justice or one who has been declared mentally defective). If the Grantor names Co-Trustee that are "prohibited persons" and permits those individual to possess and use the NFA regulated firearm, the Grantor may be committing a serious crime which could lead to significant prison time.
Weapons and other items regulated by the NFA are generally known as Title II firearms. More specifically, federal law (26 U.S.C. 5845; 27 CFR 479.11) defines the following items as regulated under the NFA:
Additional information regarding NFA regulated firearms is available from the ATF.
All transfers of ownership of registered NFA firearms must be done through the federal NFA registry, and all NFA regulated firearms must be registered with the ATF.
Before a person, Trust or other entity can lawfully transfer or manufacture an NFA regulated firearm or accessory, that person must first submit an application to the ATF (Form 1 for the manufacture of a firearm: Form 4 for the transfer of a firearm) and pay a Stamp Tax associated with the application.
The Stamp Tax must be paid to the ATF for each NFA regulated item. If the Grantor is transferring an NFA item to the Gun Trust, the $200 Stamp Tax must be paid along with the ATF application. The application must describe the specific firearm that is sought to be registered to the applicant.
As part of the application process, the ATF will conduct an extensive background check on each "responsible person" named in the Trust (i.e. the Grantor and each Trustee named in the Trust). This process requires each "responsible person" to complete and submit with the application document a photograph (2" x 2" taken within the year prior to the date of the application), fingerprints, and ATF Form 5320.23.
Upon approval of the application by the ATF, the firearm described on the application is registered to the Gun Trust.
For the purpose of a Gun Trust, a "responsible person" is defined by the ATF to be "any individual who possesses, directly or indirectly, the power or authority to direct the management and policies of the trust to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity. In the case of a Trust, those persons with the power or authority to direct the management and policies of the Trust include any person who has the capability to exercise such power and possesses, directly or indirectly, the power or authority under any trust instrument, or under State law, to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the Trust."
In particular, Grantors and Trustees of a Gun Trust are specifically considered responsible persons (in contrast, a Beneficiary of a trust is generally not considered a "responsible person" if the Beneficiary does not have the ability to exercise the powers or authority described above).
As stated above, as part of the ATF application process each responsible person (i.e. the Grantor of the trust and each person named as Trustee in the Gun Trust document) must complete ATF Form 5320.23 and submit it with ATF Form 1 or 4 and finger print cards and passport photos. These documents must be submitted to the ATF and the Chief Law Enforcement Office (CLEO) of the applicant's county. According to the ATF, the CLEO is the local chief of police, county sheriff, head of the State police, State or local district attorney or prosecutor.
If the transferee named in the ATF application for registration is not a licensed manufacturer, importer, or dealer and is a Trust, the ATF considers the Trust to be located at the primary location at which the firearm will be maintained.
Naming several Trustees in the Trust allows different people to use, possess, store and transport the same NFA firearms. By simply adding an eligible person as a Co-Trustee, the owner of the NFA weapon can authorize these persons to legally use any NFA weapons that the Gun Trust owns.
A properly executed Gun Trust will avoid probate, and while alive the Grantor can direct how the weapons will be held or distributed.
The Trust is revocable and can be amended at any time during the Grantor's life. The Grantor can change beneficiaries, assign new weapons to the Trust, sell or transfer any weapons held in the Trust, etc.
When possessing or shooting the NFA weapon, the Trustees should always have a copy of the ATF Tax Stamp for each NFA firearm, as well as a copy of their Gun Trust, including all amendments, if any, and some photo identification.
Minor children can be named as Beneficiaries of NFA Gun Trust property but cannot legally possess any NFA regulated item until they are at least 18 years old and/or be able to lawfully to possess a firearm under state and federal law.
Our Gun Trust does not use a "schedule" to list all Trust property. Rather, the Grantor will transfer NFA regulated items to the Gun Trust using a separate Assignment Form - but this Assignment Form cannot be used until the AFT has approved the registration and issued the Tax stamp. The Assignment Form is included in the Custom Silencer Company Gun Trust package, but it is NOT part of the Gun Trust; it merely offers proof of transfer of ownership of property to the NFA Trust. By eliminating the schedule of firearm ownership from the Trust itself, the Grantor and Trustee are not required to provide a list of all firearms owned by Trust when making later application for new NFA regulated items - because the ATF requires the entire Trust, including schedules, to be submitted as part of the application process for each NFA firearm being registered to the Trust.
If an owner of an NFA regulation firearm creates a Gun Trust and desires to transfer the firearm to the newly created Trust, the transfer will require the submission of ATF Form 4, the background check and the payment of the $200 stamp tax. (Since the Grantor is the owner of the firearm, the Grantor can maintain possession of the item while the transfer is being processed by the ATF.)
Our Trust is valid in all 50 states, meaning that the document complies with all federal law and regulation pertaining to NFA Gun Trusts. NOTE however, that some states and metropolitan areas will have specific restrictions on NFA items that can be owned or possess by the Gun Trust or Trustees, so make sure that you review and follow all state and local laws and regulations.
Gun Trusts are private documents, but must be submitted to the ATF with the appropriate application for registration.
Further, some states require that Gun Trusts be registered in the county in which the NFA regulated firearms are possessed. These states include Alaska, Colorado, Hawaii, Idaho, Michigan, Missouri, and North Dakota.
Some states have optional filing requirements, including Florida, Maine and Nebraska.
States in which Notary Requires Witness: Alabama, California, Delaware, Florida, New York and Louisiana.
When the Grantor dies, the Trust continues to own the property that has been assigned to the Trust. Those named as Trustees can continue to possess and use the NFA regulated firearms owned by the Trust.
Our blog contains a NFA Gun Trust tutorial series on how to complete you gun trust, add trustees at a later time, add new guns and NFA items ETC.
