A prevalent misconception exists among the general public, and the majority of gun owners, that silencers are illegal. Lump machine guns, short-barreled long guns into that questionable group, too. To the better informed, all the previously mentioned weapons can be legally owned by paying a $200 tax and filling out ATF Form 5320.4, also referred to as Form 4.
The most common manner in which to obtain restricted Class III weapons is to fill out the Bureau of Alcohol, Tobacco and Firearms (BATF) Form 4 and register the weapon as “individual” ownership. The second classification, Corporations, allows incorporated entities to own Class III weapons. A third registration method is to assign their ownership to a trust.
Creating a trust to own Class III weapons has risen in popularity over the past two years, owing to a couple of reasons. As a part of the background checks, the chief law enforcement officer in the community where you live is required to sign off on the Form 4. In some communities, the chief LEO refuses to sign off on a law abiding citizen’s Form 4. The second reason that trusts rose in popularity is the belief that Class III applications registering ownership to a trust got approved in less time. Before some ATF rule changes and trust registration took a fraction of the time compared an individual registration.
The popularity of creating a trust to take ownership of Class III weapons deserves a hard look to weigh the pros and cons associated with this choice. I will be right up front and say, I am not an attorney. For this reason, I am not making any recommendations that could be construed to be legal advice. I am merely presenting the views of two knowledgeable attorneys on the subject, as well as other experts on the subject.
Going beyond using a trust to own National Firearms Act (NFA) regulated Title 2 weapons, this method of ownership may be used in states where Title 1 weapons come under close personal scrutiny, too. (Title 1 firearms are the kind that you can go to Wal-Mart or the local gun shop to buy.) An attorney in your state should make that judgment, though.
Before diving into the issue of NFA trusts, examination of registering weapons under a corporation help clear the air. Some of the pitfalls of using a corporation instead of a trust include registration of the corporation on an annual basis that require fees from state and local municipalities, filing taxes and maintaining a board of directors. If the corporation is dissolved, dealing with the assets, such as NFA items, can be difficult legally.
A trust is an estate planning document. A trust lives on beyond the life of the person establishing the trust. To get an idea of the benefits of creating an NFA trust, I spoke with David Goldman, an attorney from Florida. He established GutTrustLawyer.com, and created a network of lawyers who specialize in creating NFA trusts.
“The biggest reason that people use trusts is that the chief LEO won’t sign off,” Goldman said. “One of our most frequent users for trusts is police officers. When budgets are tight and the officers want to arm themselves with short-barreled rifles, but their chief won’t sign off. Privacy is another matter.”
I don’t advocate allowing felons to own firearms. Certain legal judgments don’t take into account every case, though. And, with 50 percent of marriages ending in divorce, it complicates some gun ownership situations. “You don’t have to be engaged in criminal activity to be prohibited person,” Goldman said. “I had a client injure a child in a helicopter accident and was convicted of child endangerment, which made him a ‘prohibited’ person. If his 12 machine guns hadn’t been in a trust, they would have been lost.”
Stories abound of false charges brought by angry spouses embroiled in divorce proceedings. “I had a client throw a cup of water and he was charged with spousal abuse, and became a prohibited person,” Goldman added.
“Many people have family members or friends who are uneducated on the current status and interpretation of the Second Amendment,” Goldman said. “As a result many people feel that there is an interpretation issue surrounding what the Second Amendment means.
“While the Supreme court in a divided court found in favor of the individuals right to own a firearm, they unanimously found that the Second Amendment applied to an individual’s right to keep and bear arms and not to that of a state. We are at a time in history, when many of our rights involved in gun ownership are at risk. Even though previous administrations state that they support the Second Amendment, they do not support it. It has recently been interpreted and have they had an agenda posted on their website under urban plans to ban assault weapons. They tried to define an assault weapon as any firearm that have a removable cartridge.
“While some people are not “pro-firearms,” they still may believe in the ability for others to exercise their 2nd amendment right if they so choose. This is similar to people that are “pro-choice” on abortion issues, but do not impose their beliefs on others. In the United States, women have the right to choose (within limitations) and Americans have the right to own firearms (within limitations), without unnecessary burdens or restrictions from the State government. Whether or not you choose to possess the firearm is a decision that should be up to you just as other individual rights that are guaranteed to us in the US constitution.
“A person cannot purchase a machine gun without a background check just by using my trust. The Gun or Firearms Trust merely prevents the local CLEO (Chief Law Enforcement Officer) from arbitrarily denying fully qualified individuals the ability to exercise their constitutional right to purchase a firearm. An NFA or Gun trust does not make it easier for a criminal to purchase a firearm because criminals do not purchase legal machine guns, silencers, and SBRs because of the ease in which these items can be tracked back to the purchaser.
“Besides allowing individuals to protect their right to purchase firearms, my trust provides protections for the families and friends of gun owners that are not available with individual ownership. Through the traditional purchase route, many individuals would be at risk of criminal activity and prosecution for permitting a friend, spouse, parent, or child use or to have access to the items. In addition, individual ownership does not deal with important issues, such as incapacity or death of the firearm owner. Likewise, a gun trust addresses the transfer of these firearms to heirs that may not be eligible to receive them, such as children or people living in a state where Title II firearms are not permitted. As a Gun Trust Lawyer, I have seen many individuals who were forming corporations, trusts, and LLCs that were generic in nature and did not address their needs. Due to these errors, they placed their families, friends, and children at unnecessary risk. A risk that can be avoided with an adequate NFA gun trust.”
After a long conversation with Mr. Goldman, I related my interest in setting up an NFA trust with fellow writer, shooter and attorney Jason Wong. We sat enjoying a drink across the camp house table at a ranch in Wyoming a few years ago. “You have to be careful when setting up an NFA trust,” Wong said. “I’ve talked to several people who want to take Will Maker software and create a gun trust. There are too many variables in state law to just create a trust in this manner. You run the risk of creating an invalid trust.”
Wong summarized his caution best in a recent article on Tactical-Life.com. “In some jurisdictions, local chief law enforcement officers will refuse to sign the Form 4 certification, and it can be nearly impossible to complete the form,” Wong said. “In these instances, some buyers have resorted to using corporations, limited liability companies, or a trust to avoid the law enforcement certification requirement. When a non-person entity (i.e., a corporation, limited liability company, or trust) is used to purchase NFA firearms, the requirements for a photo and law enforcement certification are waived by ATF.
“If the buyer is self-employed, he may have already formed a corporation or limited liability company. In other cases, buyers often form corporations and trusts solely for the purchase of NFA firearms. If a buyer lives within a jurisdiction where a law enforcement certification is difficult or impossible to obtain, he may wish to explore one of these options. Buyers should speak with a lawyer about potential advantages and risks when considering the use of a corporation or a trust. Potential risks include the loss of all firearms possessed by a corporation or trust if the formation and administrative procedures required of the entity are not followed properly.”
“Depending on the state, it can be as easy as signing a piece of paper and have it witnessed and notarized,” Goldman said in regards to completing a NFA trust. “We participate in the fees for providing the information and federal guidance and the local attorney handles the state issues. It can take 24 hours to turn them around to another attorney, but it usually takes a week.”
Checking on the cost of establishment, I find it common for estate trusts to run in the $1,500 range. “In some states, we try to find attorneys in the $750 range,” Goldman said.
“There are only 12 examiners who review NFA applications,” Hollister said. Ten years ago the NFA application examiners were reshuffled from categorizing based upon the first letter of the last name of the applicant to being divided by state of applicant. Hollister’s speculate that individual Form 4 approval would be faster than before, and that came to fruition.
If you are in the market to purchase a silencer, machine gun, short-barreled rifle or other NFA weapon, consider all the options carefully. If you choose to form a trust, ensure that you weigh carefully the do-it-yourself route. I used a local attorney to set up mine.
You Might Also Like:
Legally Armed
Gun Storage at Home & On The Road
Tips for Training First-Time Shooters
Safety First: 4 Basic Rules of Firearm Security
Handguns A to Z
More About Jay Langston