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Five Things to Know about Gun Trusts and New Federal Rules


Lindsay Wheeler, JD
High Sierra Legal

Submitted by Lindsay Wheeler, J.D., High Sierra Legal

The Bureau of Alcohol, Tobacco, Firearms, and Explosives finally published the long-awaited ruling regarding the rule change in regards to Title II weapons and NFA Gun Trusts. The new rule will go into effect on July 13, 2016. All applications that have been either approved, or are in process on July 13, 2016 will be processed under the existing rules.

What is a gun trust?

Simply, a gun trust is created to receive (or purchase) and manage certain federally restricted but legal-to-own, firearms. It is conceptually no different from other trusts.

The trustee of a gun trust holds the trust property as a fiduciary for one or more beneficiaries, the trustee takes legal title of the trust property, and beneficiaries enjoy the equitable title to the trust property.

With gun trusts, the trust property typically consists of restricted firearms regulated under federal law (Title II Firearms). The gun trust is the legal entity to which any firearm is registered.

The trustee and beneficiaries may use the firearms owned by the trust under conditions both specifically dictated in the trust instrument and prescribed by federal, state and local firearms laws.

Gun trusts are not illegal, and their use for estate planning purposes does not exploit a loophole in the applicable federal firearms laws.

In fact, the purchase or ownership of restricted firearms by trusts is specifically contemplated by, and permitted under, federal firearms laws.

Trusts provide neither a means to purchase illegal firearms nor an avenue to circumvent laws that prohibit specified individuals from owning, possessing, or using firearms. In addition, no party associated with a gun trust–settlors, trustees, or beneficiaries–is insulated from any criminal liability for violating firearms laws.

Finally, gun trusts cannot bypass any of the applicable waiting or “cooling-off” periods mandated before the purchase of a firearm is completed. Therefore, nothing in and of itself is legally wrong with gun trusts purchasing firearms.

ATF 41F Ruling

Here is the ruling in its entirety if you want to read through all 248 pages: https://www.atf.gov/file/100896/download

An NFA gun trust will still remain one of the most effective ways to own NFA weapons given the ability of the trust to have multiple people use the same weapon. A gun trust provides great estate planning benefits.

The 180 days before the AFT 41F rule takes effect is an opportunity to get your trust in place and to send in your application, taking advantage of the exemption from the rule for the lifetime of your trust.

Five Points of the New Ruling

  1. The ATF 41F ruling won’t be enforced until 6 months after (July 13, 2016) it has been published in the Federal Register. It was published on January 15, 2016. Read it Here
  2. A Chief Law Enforcement Officer (CLEO) signature requirement will be removed for those registering as an individual. There will be a notification requirement, but the CLEO will no longer have the power to prevent your NFA purchase.
  3. All pending applications dated before the enforcement date will be grandfathered in under the existing rules (page 198).
    If registering under your NFA Trust, once the 41F Rule goes into effect, you’ll need to submit both fingerprints and passport photos for every “responsible person” with the application.
  4. Once you receive approval under the new rules, you’ll be exempt from having to submit fingerprint cards or photographs for 2 years from the date of the most recent approval.
  5. It is in your best interest to do an NFA Gun Trust now, prior to the 180 days. As long as it is postmarked before July 13, 2016, that NFA item will be exempt. (page 164). All applications postmarked prior to the effective date of the rule will be processed under the current regulations. The same is the case for any applications that have a pending status at the time the rule is implemented.

You will still need to continue to provide proof that a valid NFA gun trust exists and a complete copy will need to be provided when purchasing or transferring Title II weapons.

Contact High Sierra Legal now to set up your Nevada NFA Gun Trust to take advantage of the 180 day period: 775-378-1275.

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