Trusts Offer a Legal Loophole for Buying Restricted Guns

Gandalf,

Once you have the trust, do you still have to submit nfa paperwork to BATFE and pay the $200 tax for each NFA item?
That is how it was explained to me. The Times article implies that you don’t have to do that.

In my county, the LEO won’t sign, so everyone here who wants an NFA item has to go with a trust.

Thanks for any information that you can provide.

I first heard about gun trusts on the Dave Ramsey show. It was described as a way to put guns in a trust, so the family isn’t breaking the law by carrying them out of the house when someone dies, in case the guns are illegal because they are no longer “grandfathered” under the law when grandpa died.
And you can put the guns in the gun trust to hold them until sold or your heirs have grown old enough and jumped through the legal hoops to inherit them.
After describing this, Dave Ramsey joked that he just make Michael Bloomberg and a lot of other gun control nuts go nuts.

Once you have the trust, do you still have to submit nfa paperwork to BATFE and pay the $200 tax for each NFA item? That is how it was explained to me. The Times article implies that you don’t have to do that.

In my county, the LEO won’t sign, so everyone here who wants an NFA item has to go with a trust.

In order to purchase NFA Class III items (full auto, short barreled rifles & shotguns, suppressors, "destructive devices" and a class of items "any other weapon") an individual needs to fill out an ATF Form 4 completely, and submit it along with a certified check for the excise tax. If we are talking a flesh and blood individual that means mug shots, a fingerprint card, and a sign off by your chief LEO for your county or parish. The trust (or an LLC corporation) is in the eyes of the law a legal person. However this person has no "mug" to shoot, no fingers to print, and by some quirk does not require a sign off by the LEO. Cool!

In a word, yes you still need to fill the form 4 and pay the excise tax. You can skip the other gapharb. The times article has an agenda and they are trying to scare civilians into thinking machine-guns are under every bush.

Truth be told, there are very strict rules concerning NFA Class III items. If you are going to the range (any place off your own property) you need to have a copy of your Form 4 with the attached tax stamp. If you plan on moving within your state of residence, you must notify ATF of your new address. If you plan on moving out of state, notify ATF BEFORE making the move (some states ban Class III items). If you plan on selling your new toy, you must go through a FFL licensed to buy/sell NFA Class III items who does business in your state of residence. If you buy your items from an out of state FFL dealer, the items must then be transferred to a dealer in state before they can be transferred to your possession.

I hinted that trusts aren't the only game in town. You can set up an LLC corporation and make the NFA items your corporate assets. If your a gun shop, gunsmith, or licensed manufacturer that would be the way to go. However as an individual there are drawbacks. Corporations are registered with the state, trusts need not be, corps must file an annual report, trust don't, corps file taxes, trusts are below the radar.

When you set up a trust, you name a successor trustee who takes over at your death and takes over possession of you NFA items which removes a big headache for the executor of your will. If you had acquired your NFA stuff without the cover a trust or corporation provides it all must be returned to ATF for destruction upon your death. That is why all the current "gun control" bills being pushed are including a provision for ATF "registration", it will prevent you from leaving any guns to your kids or grand-kids.

If you decide not to set up an NFA trust, I would recommend, at a minimum, setting up a revocable trust to handle your assets (including your non NFA guns, ammo, magazines, &c.) instead of a will. Your successor trustee will distribute your assets to your heirs and assigns much like an executor but without the scrutiny of a probate court.

Regards,
GtG

PS If you buy a fully automatic, short barreled rifle with a suppressor that will take three Form 4s and three certified $200.00 checks. ATF considers each item to be a "firearm" with it's own serial number.

PPS If you set up multiple trusts the successor trustee may be the same person or different as you see fit. If you plan on living a long time you may want to add backup successors.

From my not super extensive reading of law and the framers intent

I understand that part. Same here.

So, theoretically as an un-infringed right, you should be able to have a select fire weapon and it would seem logical that you could also have an attachment like a grenade launcher.

Several years ago in England, a man was killed by a weapon disguised as an umbrella that injected a poison pellet into him. The purpose of such a weapon is murder, assassination. It's not an infantry weapon. Such a weapon has no moral purpose, as far as I know, in society. Is such a weapon covered by “The right of the people to keep and bear arms”?

And what about the "bear" part? Is a law an infringement when the law makes it a crime to bear a select fire weapon on or in someone's property if that someone forbids it? What if it's public property and the public, as the ultimate owners of public property and by means of popular vote, vote for a law forbidding the bearing of select fire weapons on public property?

It would not apply to crew served weapons mainly from the fact that said weapons are generally not individually portable.

Well, the "bear" part might not apply for practical reasons, although six people might be able to bear a machine gun or a cannon in the same way six people bear a casket. But what about the "keep" part? According to the Constitution (the body itself, not the amendments), Congress has the power to grant Letters of Marque and Reprisal. Such letters were granted to ship captains or owners so that they could in effect conduct wartime operations during wartime. It seems to me that the clear implication is that crew served weapons, that is cannon, could be kept.

Thanks for the very helpful explanation of setting up a trust and your advice about setting up a revocable trust. I have seen advertisements from local lawyers here in Texas who specialize in creating NFA trusts. If I ever decide to get an NFA item, I will definitely get the assistance of one of these attorneys.

Just to be clear though, the Times implies that people using trusts don’t undergo a background check. When you submit the Form 4, (even though you don’t submit finger prints or a photo) I assume the BATFE does the background check before you get approved. I would assume they would also do it for the successor you name as well. After you establish the trust and start to buy multiple NFA items over time, do they conduct the background again for each purchase or only after the first NFA purchase after establishing the trust. I don’t mean to bug you about it. I just want to make sure I am clear about it. Thanks again.

I have seen advertisements from local lawyers here in Texas who specialize in creating NFA trusts. If I ever decide to get an NFA item, I will definitely get the assistance of one of these attorneys.

I had my trust done by David Goldman, I found his office through an Internet search. I found him to be highly competent in the area of trusts in general and specifically gun trusts. What follows is an excerpt from the Times article:

"David Goldman, an estate lawyer in Jacksonville who pioneered the use of gun trusts six years ago, said most dealers carried out background checks for restricted firearms... Mr. Goldman, who has prepared several thousand gun trusts and teaches courses on their use, said the trusts have many benefits, like ensuring that firearms were passed on responsibly when an owner dies, keeping them from falling into the wrong hands in a difficult divorce or helping to negotiate moves to other states that might have different gun laws."

“There was never a proper way of dealing with firearms with estate planning and whether beneficiaries were appropriate to receive them,” Mr. Goldman said."

Attorney Goldman gathers your background information and then provides a framework containing the necessary verbiage for a "gun trust". He has a network of Lawyers who practice in other states who "fine tune" the initial trust document to reflect the differences in trust law from state to state. When finished your trust is custom designed for you and the state in which you reside. I recall I paid about $600 for the package but that was some time ago.

Just to be clear though, the Times implies that people using trusts don’t undergo a background check. When you submit the Form 4, (even though you don’t submit finger prints or a photo) I assume the BATFE does the background check before you get approved. I would assume they would also do it for the successor you name as well. After you establish the trust and start to buy multiple NFA items over time, do they conduct the background again for each purchase or only after the first NFA purchase after establishing the trust.

The way an NFA purchase is done follows:
You first contact a licensed dealer of NFA Class III items and determine the items and prices of things you might want.

After you settling on your "wish list" you put them on "layaway" by committing money.

You fill out the ATF Form 4 (available on the Internet at the ATF website) Sections 1, 2, 13, 14, & 15 leaving the dealer portion blank, no mug shot, no fingerprint card, and no LEO sign-off. Sections 13 & 14 are very much like a 4473 asking if you are a "fugitive", an "illegal", under 21, &c. Section 15 asks (Do You) "have a reasonable necessity to possess the machinegun, short-barreled rifle, short-barreled shotgun, or destructive device described on this application for the following reason(s)" Fill in "add to my gun collection" or some such innocuous statement.

You go to your bank and get a certified check for the excise tax ($200 for automatic, short barreled rifle/shotgun, suppressor, destructive device, & $5 for any other firearm (novelty stuff)) made payable to the Bureau of Alcohol,Tobacco, Firearms and Explosives. You may also use a money order, do NOT use a personal check, it will only delay the processing time for your application. (Can you believe some applicants are so dumb as to try and pass a bum check to the ATF?)

We are almost done, next make a complete copy of your trust documents, signed and sealed by a notary public. You then mail your trust documents, Form 4, and check to your dealer.

Your dealer completes his portion filling in sections 3a, 3b, 3d, & 4 through 12. The dealer then forwards the package complete to the ATF for processing. I do not think that ATF does anything beyond having their legal staff review the trust document for errors and/or omissions of necessary verbiage. At one time processing was about 30 days. Those days are long gone and you could wait as long as 6 months. Check periodically with your dealer as to status as ATF does not notify you when they are finished. ATF notifies the dealer who may or may not call you to come in for a pick-up (it is necessary for you to pick up your item in person, no shipments allowed).

Patience is required throughout the whole process. To answer your questions Re: background checks, I will again excerpt from the Times article:

"Jim Bueermann, the president of the Police Foundation, a research organization in Washington, said...that he was especially concerned about the loophole in A.T.F. regulations that made it possible to buy restricted firearms without a background check and that he thought most Americans would find this shocking. The A.T.F.’s regulations, in fact, exempt trusts from background checks, as noted in the Federal Firearms Regulations Reference Guide, known as the White Book, and on the forms for gun sales that dealers file to the agency. (In one publication, its handbook on the National Firearms Act, the agency does say that the trust representative who picks up a restricted firearm at a dealer must have a background check, but that deviates from what the regulations require, the A.T.F. confirmed.)" Ie, the regs say no but they do it anyway, that's the ATF alright!

"Mike Campbell, a spokesman for the Bureau of Alcohol, Tobacco, Firearms and Explosives, which enforces firearms regulations, confirmed that under current regulations, background checks were not required for the buying of restricted firearms through trusts. The agency, he added, was aware of the loophole and was reviewing changes to close it."

So, as it stands currently there is no ATF background check of the purchaser of the NFA item(s). That may change but then again it may not. The reason I say that is that when you submit the paperwork to acquire an NFA item you are not buying the item for yourself. You are acting as the Trustee of your gun trust and as such you are an agent of the trust, purchasing items for the trust which is then the owner of said items. The incorporeal Gun Trust is a legal person and is the owner of it's assets. Since it has no physicality, it has no background to check! Saying otherwise would twist the law into a pretzel and stand it on it's ear.

When you drop by your dealer to pick up the new toy, he will have you fill out a 4473 which is routine for "over the counter" sales. For the most part it is done to keep his inventory records and "bound book" up to date. (If there are demonstrable errors or omissions he could loose his FFL.) When you are filling it out he may run you through the NICS background check, some do and some don't. In any event, you should pass as I assume this isn't your first brush with NCIS and you have purchased other guns and completed the check successfully. He will probably stick you another $15 to $20 for the process, don't argue, you are now in possession of goodies to turn your shooting buddies green with envy. Just a word, legally you can not allow them to so much as touch your new toy, what you do in the woods is your business.

I almost forgot, when you are buying NFA items like a short barreled rifle and a suppressor. that's two Form 4s, two $200 checks and probably only one copy of the trust documents. If however, the rifle is select fire, that adds a third Form 4 and another check. Every item is considered separately, not as an assembly. In ATF's eyes every NFA item is a firearm and requires a separate serial number.

Regards,
GtG

PS I'm not a Lawyer, but I did stay in a Holiday Inn Express once...

PPS Full auto, the fastest way to turn ammo into pure fun...

Thanks, Gandalf. That is the best explanation of the process I have ever seen. I will be saving your responses for future reference.

Several years ago in England, a man was killed by a weapon disguised as an umbrella that injected a poison pellet into him. The purpose of such a weapon is murder, assassination. It's not an infantry weapon. Such a weapon has no moral purpose, as far as I know, in society. Is such a weapon covered by “The right of the people to keep and bear arms”?

I remember that, it was during the cold war, he was a Bulgarian dissident I believe. I do not believe that under a strict interpretation it would be liberally allowed. Hypothetically, it could be "permitted", but it is not a common individually borne weapon. Even if we hypothesize a world where for some reason war became so onerously dangerous or economically infeasible that stealthy "assassination wars" took place on a frequent and large scale, the weapons involved would mainly be individually offensive in nature and probably regulated by the state.

And what about the "bear" part? Is a law an infringement when the law makes it a crime to bear a select fire weapon on or in someone's property if that someone forbids it? What if it's public property and the public, as the ultimate owners of public property and by means of popular vote, vote for a law forbidding the bearing of select fire weapons on public property?

While I see no reasoning that prohibits an individual from barring armed folks in their premise it is for the most part irrational on their part, save maybe a bar or a gaming establishment and even then I think that could be managed privately.
I do see it as being legal for the local populace to bar weapons from certain public buildings, but not open air places like "streets and sidewalks. Additionally, public buildings that bar responsible personal weapons bearers their arms should be strictly liable financially for their medical care and familial income replacement (in case of death) in the event their are subsequently killed or injured within the building through assault.

Well, the "bear" part might not apply for practical reasons, although six people might be able to bear a machine gun or a cannon in the same way six people bear a casket. But what about the "keep" part? According to the Constitution (the body itself, not the amendments), Congress has the power to grant Letters of Marque and Reprisal. Such letters were granted to ship captains or owners so that they could in effect conduct wartime operations during wartime. It seems to me that the clear implication is that crew served weapons, that is cannon, could be kept.

I agree with that, particularly in the context of responsible patriots, though in today's age we might need to leave that further down the road. Politicians obviously regulated the larger scale destructive devices for their own protection. Politicians could give 2 craps for citizens for the most part. I personally think their wholesale frenzy to regulate self loading rifles is due in part to their subconscious realization that they will have royally screwed the Republic, possibly to its end, in the very near future and they'd like to minimize the citizen pay-back seekers in the aftermath...