August 2009 Archives: NFA Gun Trust Lawyer Blog  

August 2009 Archives

August 31, 2009

Florida Man Arrested for Constructive Possession of an SBR

crime-tape.jpgNFA firearms and Constructive Possession. Some said it would never happen, but it seem that just recently Jesus Amador was arrested for possession / Constructive possession of an SBR.

Florida law does not allow individuals to possess the pieces to readily build an SBR, SBS, or Machine Gun unless permitted to do so under Federal law. While he may have been enticed by the police to take an action that he would not have taken, he eventually showed up to unknowingly sell the items to a police officer. Upon doing so 7 police officers at gun point slammed him to the ground and arrested him (as reported by Joshua Prince on his gun blog and by Mr Amador on Florida Gun Trader)

While some may say that this is a possession issue and not constructive possession, the fact is that constructive or actual possession are only ways to prove possession and as such there may be little significance between the two.

If you are going purchase, own, or use NFA firearms make sure you are protected by using a NFA Gun Trust that deals with these special firearms as Title II firearms and not as a traditional asset like a house, care, boat, bank account, or picture on the wall. If you do not believe there is a difference, call us and we will explain how they are different and why you need a gun trust for your firearms.

August 30, 2009

NFA Trusts: Silencer Manufacture Provides Invalid Forms to Clients for Title II Purchases

While many dealers provide Trusts and help clients fill our Trust Documents ( a violation of law in most states), this was the first time I had run across a Manufacture of Title II firearms who was providing trusts to clients. This Trust was not being completed by the Class 3 manufacture, but was a Fill in the blank form that was supplied by a silencer manufacture. It had a place to print your name, date, pick successor trustee's and sign. There was no place to witness ( a requirement in many states). While the trust appeared to be better than some forms we have seen, it will missing some of the schedules. The main schedule that was missing was the Schedule of Beneficiaries. It was not evident that one was necessary and as such the trusts we were reviewing did not contain them.

As we have discussed before, a beneficiary is an essential element to a trust and in most cases the failure to include a beneficiary who is different from the creator will cause a trust to be invalid.

This trust, as with many Quicken or Legal Zoom trusts failed to address the firearms and the many unique issues that arise when dealing with Firearms. If a valid trust would have been created, it could have transferred a bank account, chair, picture on the wall, or most any item without problem, but would have not been a good idea to use for a firearm.

In addition, because of the way the trust was structured, there was no way to include provisions to protect a spouse or other person who you would want to have access, use, or purchase their own NFA (Title II Firearm).

While the last gun dealer who was supplying invalid trusts was quick to respond, this manufacture seemed to take the attitude that it was the individuals responsibility to make sure they did the right thing, and that the form they supplied was not to be used, just a sample that they could start with.

When I suggested that the correct the form to at least allow their customers to make a valid trust, there was little interests and I would bet that nothing changes.

Remember just because the ATF approves a transfer to a trust, it does not mean your trust is valid, nor that you are legally able to possess the firearm. All it means is that if the trust is legal (which they do not guarantee) you can be in possession.

If you received your trust from a dealer, found it online, or tried to create a valid trust with legal zoom or quicken and would like it evaluated under your personal circumstances for validity and potential issues with the NFA and future transfers, Contact a NFA Trust Lawyer or Gun Trust Lawyer® to review your trust.

August 20, 2009

ATF Form 1 (5320.1)for SBR/SBS with multiple barrel lengths

When submitting a Form 1 to the ATF for a SBR or SBS with multiple barrel lengths, the ATF will no longer accept a Form 1 with multiple barrel lengths. It is recommended that you submit the ATF Form 1 (5320.1) with a single barrel length for approval. Follow this link for more information on how to fill out an ATF form1 (5320.1).

If you have additional calibers you want to list you should attach additional configurations in a letter attached to your Form 1 stating the caliber, barrel length, and overall length as related to the firearm listed on the Form 1.

Previously ATF accepted them by being listed in 4h on the Form 1 but no longer accepts this.

UPDATED 7/4/2013

August 18, 2009

How do I transfer firearms that I now own into my new NFA Gun Trust?

If you have regular firearms and your state allows you to transfer them to an individual without going through a dealer, you can fill out the assignment form that we supply with the NFA firearms trust. On the other hand if your state requires other steps to give or sell a firearm to an individual you will still have to comply with your state's laws when transferring the regular firearms into the NFA Trust.

With Title II firearms you have to deal with the same issues as above + the requirements under the NFA. If you are purchasing from :

1) an individual within your state, you can use the form 4 and no dealer is required on the federal level- unless your state would require a dealer to be involved with a regular firearm of the same type.
2) a dealer in your state, you can use the Form 4 and the dealer can fill out the documents.
3) a dealer in anther state, you must use a Class 3 SOT transfer agent within your state to take possession of the firearm, then they will act as a local dealer and follow the instructions in #2 above.
4) an individual in another state, you and the other individual must each use a Class 3 SOT transfer agent or dealer in your state. The two dealers can transfer the items between themselves with the proper documentation, and then you can pick up the item, upon approval from the ATF, from your in state dealer / transfer agent.

If you have questions regarding the NFA, Title II, Class 3, or Gun Trusts contact a Gun Trust Lawyer®

August 17, 2009

Update: - Free NFA Trust Form for Class 3, Title II purchases.

crime-tape.jpgI was contacted by the firearms dealer offering the Free downloads of the NFA trust and they have removed the links on their website. Since being contacted, by this dealer I have had reports of other dealers in Florida, Texas, Arizona, Utah, Nevada, and South Carolina who are offering Free trusts.  While I have not had a chance to review all of them, there have been several trusts that were not set up correctly and pose substantial risks to the clients, their spouses and families for Constructive possession of NFA firearms.

The question still remains as to what will happen to their clients and others who have downloaded the invalid trusts and submitted them to the ATF. Apparently the ATF has approved them. It should be noted that just because ATF approved a Form 4 or Form 1 Transfer, this does not mean you are legally able to possess the firearms. They are only approving the ability to transfer the NFA firearms to a legal entity described on the Form 4 or Form 1.

To read more on this topic see the original article Free NFA Trust Form for Class 3, Title II purchases.  This article was written by David M. Goldman a Jacksonville Estate Planning and Probate Lawyer at the Law Office of David M. Goldman PLLC  PLLC.

August 17, 2009

How to Fill out an ATF 5320.1 Form 1 for a NFA Trust

When filling out a Form 1 for the first time with your NFA trust it can be confusing. With an ATF Form 4, there is typically a dealer involved or someone who has done it before so there are not as many questions. I have created a page on How to fill out a Form 1 with a link to a 5320.1 Form 1 that you can download and a sample that is filled out that can be used as a guide. The page also includes instructions on what information should be contained in your Form 1.

August 17, 2009

Do trustees of the NFA Gun Trust have to fill out forms, be fingerprinted, or have a background check by the CLEO?

While a trustee needs to sign the Form 4 or Form 1, no additional paperwork is required because a NFA Gun Trust is being used. Other Trustee's do not need to sign the paperwork, if you are using a properly drafted NFA trust that authorized any Trustee to make the purchase without consent of the other trustees.

This is something that you may want to modify in your trust and should talk with a Gun Trust Lawyer® about.

In addition, the trustees do not have to include fingerprints or go through a background check by the CLEO as is required by an individual. NOTE: Most states and gun stores will run the NICS check on the person who is picking up the weapon, upon approval by the ATF.

August 14, 2009

Must I update the ATF if I modify my NFA firearms Trust or Gun Trust?

According to Mr. Howard, the section chief of the ATF, there is no requirement under the NFA or BATFE to update a modified Trust with the ATF when the people involved are modified. The only time that the ATF must be notified is if one of the Trustees becomes ineligible to be in possession of the items.

A properly drafted NFA trust should notify under which conditions a Trustee should resign, whom they need to notify, and the time constraints required under to avoid having the weapons seized and to avoid risk of jail time and monetary penalties.

To speak with a Gun Trust Lawyer®, Contact Us.

August 13, 2009

Free NFA Trust Form for Class 3, Title II purchases.

crime-tape.jpgFree NFA Trusts from your dealer - are they worth the paper they are written on, or could you face jail time for relying on bad advise from your dealer?

Recently I was contacted by a client who's gun dealer provides their clients a free Revocable Trust to purchase NFA items. After reviewing the Free NFA Gun Trust Form, I was shocked to discover that there was no way this trust could create a valid trust. A trust by definition must separate beneficial and legal ownership of the assets that are held in the trust. If this is not done, there is no trust. If there is no trust, any transfer to the trust is a violation of the NFA whether or not approved by the ATF. If you are in possession of a NFA firearm and your trust is not valid, you have committed multiple violations of the NFA each of which is subject to a 10 year jail sentence, $250,000 in fines & forfeiture of the firearms.

While some people are interested in only acquiring the firearms, many are interested in protecting their family and friends from illegal purchases, transfers, possession and other activities that would subject them to 10 years in jail and $250,000 penalties associated with each NFA violation for a trust.

The following are potential problems with the trust that is provided to clients for free. They really do not matter since the trust is invalid but it may help many of you evaluate similar trusts that are posted on the Internet. You may want to download a copy this Invalid Generic NFA trust.doc review with a few of the basic problems found in the trust.

Starting with the top This trust is setup up for 1 creator and trustee. This will expose many families to violations of the NFA for constructive possession IE- your spouse uses, wants to use, has access to, or knows the combination to the firearms safe. - A violation of the NFA. In addition, it allows no one else to use the firearms or be in possession of them other than the individual.

Why include NFA in the name, this only makes the trust's purpose recognizable by others in dealing with the NFA but not a major flaw.

The Insert name here leads people to create long trust names and can cause problems with identification. Lets assume I create the David Michael Goldman Revocable Living Trust dated August 10, 2009 and my wife is in possession of a firearm that is transferred to the trust, how do police know that my wife (who is not David Michael Goldman) is legally able to be in possession, since most police incorrectly believe that these items are illegal to begin with, the chance that she will be detained until proper possession can be proven is much greater than if we used a different naming schema for the the trust.

Please note, the document I have lined to does not create a legal trust and should never be used. Once an item is illegal, it can not become legal through a future transfer.

Part 2
This is problematic for the trustee and grantor as any trustee can purchase NFA firearms. if the trust is revoked all those in possession are illegally in possession and subject to the criminal penalties associated with violating the NFA. In addition it allows someone acting under a power of attorney to potentially revoke the trust (assuming it was valid to begin with.)

Part 3
Children's sub trusts are only created once the settlor dies, this does not make sense that the trustee - presumably the owner because of how you structured the trust will be the trustee. Also this trust gives no guidance to the trustee about how to accomplish the transfer without violating the NFA. There is no mention of what these trusts are nor how to create them. This is language taken from a quicken trust and shows the danger of copying a trust from someone else. A NFA trust should rarely discuss children's sub-trusts as the concept does not make sense in relation to firearms, restricted transfer, illegal ownership by minors and many other factors.

Part 4
This creates a very long name to engrave and use on Form 4's or Form 1's

<Insert Your Name Here>, trustee of the <Insert Your Name Here> NFA Trust, dated <Insert date of trust here Month day, Year.>

Part 5
Tells a trustee they can buy sell lease make alterations to NFA items with no guidance or indication that specific procedures need to be followed or the trustee and buyer or seller will all be subject to the penalties of violating the NFA.

This trust does not name a successor trustee nor a beneficiary nor describe how they will be selected.

This document will not create a legal trust, and anyone who has used this document to create a trust and purchased items subject to the NFA is illegally in possession of the Title II firearms - regardless of the approval from the NFA. The NFA approval assumes a valid trust and does not guarantee that a trust is in place.

If you have used this trust or a similar trust I would suggest contacting a Gun Trust Lawyer® and amending and restating your trust before the ATF comes knocking on your door as they have for others.
See this article and this article this article and this article on problems with quicken and legal zoom.

August 13, 2009

If the NFA trust "owns" the firearms, who may use them?

Any current Trustee of the NFA trust may use the firearms. A properly drafted NFA trust will have provisions that make a trustee ineligible to serve if they are disqualified for one of the legal reasons a person cannot be in possession of an Title II firearm under the NFA.

August 12, 2009

May I or should I place other firearms / weapons in the NFA trust (rifles, shotguns, pistols, knives)

One of the most common questions regarding the formation of a NFA trust is whether it is a good idea to put other firearms or weapons in the trust with the Title II firearms.

Generally as long as you would want those items to go to the same beneficiaries, there is no problem in putting non NFA firearms or other items with similar concerns in the same trust. Under no circumstances should you place regular assets like your personal bank accounts, stock accounts, or real estate inside a NFA trust or trust that is designed for NFA purposes.

A properly prepared NFA trust will have provisions that make the risk of abuse by a trustee or successor trustee to great. The flexibility that is necessary to deal with the unique issues of firearms ownership, transfer, possession as well as the potential risk of criminal liability make us recommend that only firearms and other related property is in the trust.

Remember a traditional trust is not appropriate for NFA firearms. While you can purchase NFA or Title II firearms using a normal trust, the trust often has trustees and successor trustees take actions which will create criminal and civil liability. If you want to know if a NFA trust is appropriate for your circumstances, please Contact a Gun Trust Lawyer®

August 11, 2009

Firearms Sites

There is a new site with information on many firearms related websites If you get a chance, take a look at our page under the federal firearms law section and if you like what we are doing let others know by give us a rating with or without comments.

August 5, 2009

Constructive Possession: NFA Trusts vs Individual Ownership

777968_alcatraz.jpgThe NFA defines who can own a Title II firearm as a natural person, corporation or trust.... When an individual makes application to own a Title II firearm they are the only person who can be in possession or have access to the firearm. This creates a problem for many individuals who are married, have others who know the combination or how to gain access to the items, or want to allow others to use the firearms, even in their presence.

Joshua Prince has written and excellent analysis of the case law surrounding constructive possession and the US v. Turnbough case which stated that the Government may establish constructive possession by demonstrating that the defendant exercised ownership, dominion or control over the premises in which the contraband is concealed. Joshua goes on the state that if a spouse or other person does have the combination to the safe where the NFA firearms are kept it would be virtually impossible for the prosecutor to show that the other individual knowingly has the power to exercise dominion and control over the firearms.

The real problem occurs when another does have access to the items or can exercise dominion and control over the NFA firearm because the prosecutor can then charge that individual with constructive possession. In US v. Turnbough, an illegal firearm was in Turnbough's home and the court of appeals found that a reasonable jury could have found that he, his live in girlfriend, and her child could conclude that all three parties exercised dominion and control over the gun and the possession could be either sole or joint.

While there are not any constructive possession cases involving NFA firearms this does not mean that the BATFE could not bring a charge of constructive possession against a spouse or other person who could exercise dominion and control over an NFA firearm.

Remember that there is no intent element to violate the NFA. Like speeding, you do not have to intend to speed to be charged with speeding.

So how can you protect yourself, your family, and your friends? If you use a NFA trust or other allowable business entity to own the items, you can allow others to be in possession, use, purchase, and know how to access the firearms.

There are many downsides to using a business entity to own NFA firearms. In most states, there are yearly state fees associated with the entity. In addition, you must deal with loss of privacy, EIN's, and federal tax compliance for the entity. The ATF only recognizes those on the official state records as having access to the items. The entity will be subject to probate upon the death of any owner. There are typically costs associated with updating the state records to allow for changes in possession and it takes time to make these changes. There are no provisions in a business entity to deal with incapacity or death in determining whom the beneficiaries are, where they live, if they are qualified to receive the items, directions on how to properly transfer the ownership and items, and most importantly if the beneficiary is mature and responsible enough upon your death that you would want to put the firearms in their hands.

Because a trust deals with these items on a regular basis, a NFA Trust (different than the traditional Quicken, Legal Zoom, or lawyer prepared revocable trust) can provide the ability to easily add, remove, or modify the users, owners, and purchasers as well as deal with the unique issues of firearms ownership that are not present in other types of ownership.

We work with more than 75 lawyers in over 43 states that can help you design a NFA trust to meet your specific needs and goals. Our NFA trust does not use a schedule of assets so your other firearms that are placed in the trust do not become know to the ATF upon the purchase of a Title II firearm from a Class 3 dealer or individual.

If you have any question on how a NFA trust can help you purchase Title II firearms and protect your family and friends from the criminal penalties associated with improper possession, purchase, use, or transfers please contact a Gun Trust Lawyer® and we would be happy to answer your questions. In Florida please contact our Florida Gun Trust Lawyer®.