Change in Law Affects Gun Trust Reporting

The National Firearms Act (NFA) is a federal law that regulates certain types of weapons requiring owners to report the acquisition or transfer of the weapon to the Bureau of Alcohol, Tobacco, Firearms and Explosives or ATF. Some of the weapons that are regulated include:

  • (1) Short barrel or sawed off shotguns;
  • (2) Machineguns
  • (3) Any silencer; and
  • (4) Destructive devices

As an individual applicant, if you own or want to transfer one of these types of weapons, you are required to register them with the NFRTR, the central registry, and disclose your identity and address to local authorities to ensure compliance with state and local laws. Local authorities would also need to sign off on your individual application.

Many legally savvy and Second Amendment purists, however, would circumvent individual reporting requirements by putting the ownership of NFA weapons into a living trust, so that technically no individual owned the gun, but rather was trust property. Guns owned by trust would bypass individual reporting requirements and law enforcement approval.

Trust Defined

A living trust is a testamentary instrument that divides certain property rights whereby a trustee holds the legal title to property for the benefit of another, called the beneficiary, until the happening of some event. Essentially, it allows one to transfer ownership of property to a legal entity, as opposed to an individual, called a trust.

There are all kinds of reasons to create a trust depending on your personal circumstances and needs. For example, living trusts can provide asset protection from creditors, provide control and structured distribution of wealth to a loved one, or sometimes allow you avoid estate taxes or provide other tax benefits. In other cases, a trust can be set up to divert NFA reporting requirements, that is until recently.

NFA Gun Trust Loophole Shut

Effective July 13, 2016, Rule 41F requires responsible persons, which includes “gun trusts” and other legal entities to comply with the same reporting requirements as individuals. In particular, a gun trustee will have to provide photographs and fingerprints when applying to hold or transfer an NFA firearm.

The new regulation represents a victory for proponents of stricter gun control measures who argue that the old rule allowing individuals to opt out of disclosure rules could be a security threat. Second Amendment absolutists say that the federal government is infringing on their privacy and ability to own guns without Uncle Sam keeping a watchful eye.

One thing is for certain, the use of gun trusts had been steadily climbing–from 2009 until 2012, the number of gun trust applications exploded from less than 1,000 to over 40,000.

Now, the new rules say that background checks are now required and the trustee will have to send their application to the chief law enforcement officer and put them on notice.The latest ATF rule change is yet another brick in a deeply divisive issue in American politics today.

Contact the Law Offices of Charles Kurmay if You Need an Estate Lawyer to Help You Set Up a Trust in Connecticut or New York.

At the Law Offices of Charles Kurmay, our skilled and experienced attorneys routinely assist clients in probate matters, which range from regular estate administration to very complex probate litigation. We regularly litigate in the Probate and Superior Courts in Connecticut as their jurisdiction frequently overlaps and in New York as well. We help clients plan their estates, drafting wills and trusts while helping with tax and Medicaid planning to protect the wealth hard working people have earned over the course of their lives and to help prevent the disaster that we are discussing here.

With offices located in Milford, New York City, South Norwalk, and León Spain, we truly are a local firm with a global reach.

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If you need a trust and estate planning lawyer in Connecticut or New York , please call us at (203) 380-1743. We are available to talk anytime.

Id. Does Final Rule 41F Change Current NFA Regulations Does Final Rule 41F Change Current NFA Regulations