Navigating the Benefits and Pitfalls of NFA Firearms Trusts
Aricle by Elliott Berlin
In order to understand the primary motivation for most people to own firearms trusts, it is important to consider the types of firearms that people seek to own. Title II of the National Firearms Act (“NFA”) regulates the possession, ownership, and transfer of certain firearms, including short barreled shotguns and rifles, machine guns, and perhaps most importantly, silencers. These types of firearms are frequently referred to as Title II firearms or NFA firearms, and the terms are generally interchangeable. While a firearms trust may hold title to NFA and non-NFA weapons alike, many of the benefits of a firearms trust are much more crucial to the owners of NFA firearms.
Benefits of an NFA Firearms Trust
One of the primary benefits of an NFA firearms trust is the ease in which it allows NFA firearms to be transferred. An individual seeking to acquire an NFA firearm generally must submit certification of citizenship, passport photographs, and fingerprint cards to the Bureau of Alcohol, Tabaco, Firearms and Explosives (BATFE) for approval. Additionally, individuals must pass FBI background checks and receive the written approval of the Chief Law Enforcement Officer (“CLEO”) that has jurisdiction at the individual’s principal address. The CLEO signature requirement is often the largest hurdle and is simply impossible to obtain in many jurisdictions. However, when a trust seeks to acquire an NFA firearm, the BATFE does not require fingerprints, photographs, and most importantly, the signature of the CLEO. This provides a streamlined process for the acquisition of NFA firearms and increased privacy for the individuals seeking their possession.
The use of a firearms trust also protects individuals from accidental violations of the NFA. Under the NFA, possession, including constructive possession, of an NFA firearm that is not licensed to that individual is a felony punishable by up to 10 years imprisonment. 26 USC 5871. Constructive possession merely means that a person knowingly has the potential for access or control of NFA firearms outside the supervision of the registered owner of those firearms. For instance, a spouse or child who is home and knows the code to the family gun safe is technically in violation of the NFA when the licensed owner of the NFA firearm leaves the home with the firearm in the safe. However, when the firearm is held by a proper trust, any trustee or beneficiary may legally possesses and use the firearm. Therefore, accidental violations of the NFA can be avoided by naming other members of the household with access to the firearms as trustees or beneficiaries.
Finally, the use of a firearms trust provides privacy to the firearms owner and helps to avoid probate. Just as with a trust used for general estate planning purposes, the firearms held in a firearms trust also pass directly to the trust’s beneficiaries upon the occurrence of specified conditions (commonly the death of the settlor) without the need to open a probate estate. By avoiding probate, the trustee and beneficiaries are not required to file an inventory of the firearms with the court, which would otherwise be preserved as public record. Thus, the use of the firearms is uninterrupted by a potentially lengthy probate process and the privacy of the beneficiaries is maintained.
Selecting Proper Beneficiaries and Trustees
One major mistake that gun owners may make when setting up an NFA Firearms trust is naming improper persons as beneficiaries or trustees. The Gun Control Act makes it a criminal offense for certain “prohibited persons” to possess firearms. 18 USC §922(g). A prohibited person is defined as any person who:
Is under indictment or information in any court for a crime punishable by imprisonment for a term exceeding one year
Has been convicted of a crime punishable by imprisonment for a term exceeding one year
Is a fugitive from justice
Is an unlawful user of or addicted to any controlled substance
Has been adjudicated as a mental defective or has been committed to any mental institution
Is an illegal alien
Has been dishonorably discharged from the military
Has renounced his United States citizenship
Is subject to a court order restraining the person from harassing, stalking or threatening an intimate partner or child of intimate partner
Has been convicted of the misdemeanor crime of domestic violence
The use of an NFA firearms trust does not provide an end around the Gun Control Act. It remains illegal for these prohibited persons to possess a firearm. A firearms trust that names a prohibited person as a trustee or beneficiary is invalid on its face, and thus, any other trustee or beneficiary of the trust would potentially be in possession of contraband items. Therefore, settlors of an NFA firearms trust must take extra care to screen all potential trustees and beneficiaries prior to the trust acquiring firearms.
Posted on January 08, 2016