The Future of Gun Trusts

The Inconvenience of Rule 41F

After the new ATF rule affecting gun trusts was signed into law on January 4th, I quickly turned to my newly published book, Infringed, to see how much of the information would now be out of date.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 (the 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 the rest of the Obama administration’s 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.

In stride with his campaign to “do something,” the President 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, 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 disingenuous and unrelenting assault on the American gun owner.

The “most dangerous weapons” referenced by our President are firearms subject to the National Firearms Act (most commonly silencers, short-barreled rifles and shotguns, and fully automatic ffirearms).  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 President’s assertion, Rule 41F only succeeds in imposing a new tax burden on working Americans to the tune of at least $5.8 million dollars a year and imposing more bureaucracy on law-abiding citizens who wish to acquire firearms subject to the NFA.  Lawful purchasers of NFA firearms via a trust will now need to submit even more paperwork (photographs and fingerprints) to the ATF and even more paperwork to local law enforcement agencies (a notice that the person is attempting to purchase an NFA firearm) in addition to completing special ATF forms with personal information and undergoing the regular NICS background check.

Targeting law abiding citizens to effect gun control is not new. When Congress passed the National Firearms Act 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 these items.  In 1986, another law affecting law-abiding citizens was passed – the Firearm Owners Protection Act 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 can still be possessed and transferred unaffordable for many Americans.

Despite the inconvenient effect 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 13th.


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 if you become incapacitated or die, boost your ability to share and transfer NFA firearms, and help 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 trust 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 by 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, the 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.  If you want to avoid the government’s nose in your affairs, you must take action.  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.


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:

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 to 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.



How Will Rule 41F Affect Gun Trusts?

Rule 41F only affects gun trusts that will hold NFA firearms.  If your gun trust does not hold NFA firearms, you will not be affected by the new Rule.

If your trust holds or will acquire NFA firearms, be aware that anyone who is deemed a “responsible party” of a trust when the trust submits paperwork to acquire an NFA firearm 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 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 effect gun 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 trustee’s 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 will 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 13th, 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.
  • I am working on materials for my clients to update some trusts, advise you if your trust needs to be updated, and provide you with future guidance on utilizing your gun trust.  However, keep in mind that we are still waiting for the ATF to issue its own “guidance” on how it will interpret its own, new Rule.  Any advice on these details prior to receiving these ATF guidelines is premature.
  • If you have a trust drafted by another attorney 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 a form NFA trust from a gun shop or non-lawyer, you are likely in need of a lot of assistance.  Now would be a good time to get a real gun trust and make sure you are in good shape to deal with Rule 41F.

In sum, the undesirable effect on most individual gun owners of the proposed rule is that a “responsible person,” which includes any individual possessing, directly or indirectly, the power to direct or cause the direction of the management, policies, and practices of the legal entity, insofar as they pertain to firearms, must submit a photograph, fingerprints, and send notice to law enforcement to receive or make an NFA firearm.

Sharing possession of NFA firearms through a gun trust remains a wonderful benefit of a properly drafted gun trust.  However, our gun trusts are designed to provide this benefit and even 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.

You can purchase an Alex Kincaid Law Gun Trust online by clicking the “Get Your Gun Trust Now” button on our website!  We prepare Idaho, Oregon, Washington, Utah, Colorado, & Florida gun trusts within 24 business hours.  Cost is $500.00.  All of our Gun Trusts are complete incapacity and death plans that will keep your affairs out of the court system and allow you to share NFA firearms with other law-abiding Americans.