The National Firearms Act (NFA) regulates the possession, use, and transfer of several different types of weapons. These weapons are commonly referred to as “Title II” weapons and include machine guns, short-barreled rifles and shotguns, suppressors, destructive devices, and Any Other Weapons (AOWs). State laws may also further restricts the possession and use of these weapons. In Idaho, Oregon, and Washington, it is legal to own and use many NFA firearms as long as the NFA regulations are followed.
Under the NFA there are two ways to acquire Title II weapons, individually or through an entity. To obtain these items as an individual, a person must submit fingerprints, a photograph, pay the $200 application fee/tax, and obtain the signature of the Chief Law Enforcement Officer (CLEO) in the jurisdiction in which they reside. In some cities and counties, the CLEO signature is very hard, if not impossible, to obtain.
Even when an individual can obtain the CLEO signature, individual ownership is not the best way to own Title II weapons. Only the individual whose name the weapon is registered to will be entitled to use the items. Many firearms attorneys have argued that the ATF defines the term “unauthorized transfer” broadly and depending on the circumstances, may include handing a Title II weapon to a friend at the firing range or even allowing a spouse to have the combination of the safe where the Title II weapons are stored.
As a result of the drawbacks of individual ownership combined with the CLEO non-participation in the application process, many gun owners have resorted to forming an entity to purchase and hold Title II weapons. There are several advantages to using an entity to purchase and hold NFA items:
• No fingerprints are required.
• No photographs are required.
• No CLEO signature is required.
• In contrast to individual ownership, multiple people may use the weapons.
The question then becomes which type of entity is best to hold Title II weapons. The answer is a GunDocx™ firearms trust.
Corporations, LLC’s, and non-profit corporations can all be used to obtain Title II weapons. The problem with these entities is that they all require fees with the state. You must pay an initial fee to form the entity and a yearly fee to maintain it. Further, these types of entities are designed to earn money not to hold, share, and distribute assets.
A trust does not require any fees with the state. Because trusts are primarily an estate-planning tool, they are designed to hold, share, and distribute assets. While it is true that a person could use a free trust provided by a gun shop (which clearly meets the definition of “unauthorized practice of law”) or download one from a discount online source to obtain NFA weapons, these products do not protect a person’s family and friends adequately as the trustees are granted powers which would allow them to commit felonies in many different situations.
An Alex Kincaid Law firearms trust is designed for one purpose and one purpose alone, owning, enjoying, and eventually distributing firearms, ammunition, and accessories. Typically, a firearms collection is the product of one spouse’s interest. The other spouse tolerates this interest, but does not care nearly as much about the items that have accumulated. Due to death or disability, the disinterested spouse or other family member may be forced to manage and/or distribute the collection. Because of the vast amount of federal and state regulations pertaining to both NFA and non-NFA weapons, a disinterested spouse may make a mistake as to the applicable laws. A violation of the applicable laws usually results in the commission of a felony.
Because Alex Kincaid Law firearms trusts are designed with this scenario in mind, there are detailed instructions to guide a trustee in handling the assets as well as an overview of applicable laws and regulations.
An Alex Kincaid Law firearms trust is also designed to allow for multiple users of the items held by the trust. This is in direct contrast to a standard/generic revocable living trust. The Alex Kincaid Law trust specifically allows for any named trustee, successor trustee, and any named beneficiary to have the ability to use the trust assets. There is even a provision that will deem any person that you are shooting with a beneficiary of the trust. The trust also allows for the formal appointment of beneficiaries for a limited duration with a set expiration date. An “automatic beneficiary” and a “limited duration beneficiary” have no rights for inheritance unless they are also listed as a “remainder beneficiary.”
An Alex Kincaid Law firearms trust also has many standard trust features such as avoiding the probate process for your firearms and the public record that it would create. There is also the ability to create and update a tangible personal property memorandum which grants different people specific items of a collection.
To learn more about our different gun trust options, please compare the options available on our Gun Trust Design Sheet.
If you have any questions or would like to learn more about firearms trust, please do not hesitate to contact Alex Kincaid Law.