NFA Gun Trust Lawyer Blog

If you purchased a GSG 5 SD model with a barrel shroud (Fake Suppressor) ATF has now determined that this is regulated by the NFA and must be replaced.
To all retail customers:

On January 2010 American Tactical Imports Inc received official notification from the Bureau of Alcohol, Tobacco, Firearms and explosives that the original barrel shroud (aka: fake suppressor) supplied with your GSG 5 SD model must be replaced. It has been determined that this shroud is regulated under the National Firearms Act. American Tactical will provide a replacement shroud at no charge for each GSG 5 SD model sold or currently in inventory.

Consumers in possession of a GSG 5 SD model with the original shroud in place on the firearm are now in violation of the NFA. To avoid continued violation of the NFA, ATI asks that all persons in possession obtain a replacement shroud as soon as possible. We anticipate arrival of the new shrouds to begin by the middle of February 2010.

IMPORTANT: THE ORIGINAL SD MODEL SHROUD MUST BE RETURNED ACCOMPANIED BY THE FIREARM SERIAL NUMBER BEFORE A REPLACEMENT SHROUD IS ISSUED. THE DIAMETER OF THE SD SHROUD IS 1-9/16". DO NOT RETURN THE SMALLER CARBINE SHROUD.

WHAT TO DO:
If possible return your old shroud to the dealer where purchased and show him this notice. The shroud will be returned to ATI along with a list of serial numbers from the guns that the shrouds were removed. ATI will send replacements to the dealer for pick up at your convenience; ATI will be sending replacements as fast as logistics allow. If your dealer is out of business or difficult to reach, or you purchased your gun used, from a consumer, return the shroud directly by US mail or UPS to American Tactical Imports Inc. 100 Airpark Drive Rochester, NY 14624.

PLEASE TRY NOT TO CALL US. We will provide comprehensive information on our web site www.americantactical.us or by e-mail to atiexchange@americantactical.us

REMEMBER, INCLUDE THE FIREARM SERIAL NUMBER WITH EACH SHROUD OR A REPLACEMENT WILL NOT BE ISSUED.

This action IS NOT being instituted through any fault and is strictly due to NFA compliance. American Tactical will assume the responsibility to satisfy the requirements in an effort to minimize the impact on our customers and protect your investment.
We at American Tactical Imports Inc. sincerely apologize for any inconvenience caused by this unfortunate situation.

Sincerely,
Anthony DiChario
President C.E.O.

The ATF has recently made a decision to review Trusts for legal sufficiency. While this may slow things down for those using generic trust for NFA purchases (Quicken, Legal Zoom, Gun Store Trusts) I think its a good idea and will protect many from unknowingly violating the NFA.

We have seen several issues where the ATF is declaring trusts to be invalid that are in fact valid under various state laws. They claim they are not practicing law in those states and will not give legal advise. They suggest that you have the trust reviewed by a lawyer to tell you why it is invalid or make changes to the trust to make it valid.

If your trust was rejected by ATF we can help by reviewing and or amending the trust with our network of 75 attorneys in more than 40 states.

Today I received an email from someone who was forming a trust to transfer assets from their father's estate. There were NFA items in the father's estate. The person's estate planning lawyer had advised them that it was OK to transfer NFA firearms to a trust using a general assignment of personal property. A general assignment of personal property is a standard form that transfers all personal property not requiring a deed or special documentation to a trust and is commonly used with a standard revocable living trust.

Unfortunately his lawyer must not have been familiar with the NFA because no one should ever do such a thing. This would be a violation of the National Firearms Act, and subject the individual to confiscation of all firearms, 10 years in jail for each violation, and up to a $250,000 penalty for each violation.

At this time of the year, we are often short of time and rushing to take care of things before the holidays. Before making a mistake with an NFA firearm, learn about them and the additional restrictions placed upon the use, possession, transfer, and purchase of them in your state and around the country.

If you are going to ask a lawyer about an issue involving the NFA, make sure they understand the NFA and what a Title II firearm and Class 3 SOT license are. We all know firearms can be dangerous in the hands of the uneducated, here is an example where the uninformed can cause you a problem.

To contact a NFA Firearms Attorney, just email us or call us and we will be glad to help.

While ATF has previously stated that a certification of compliance is not necessary for trusts, they have now changed their mind or at lease in some cases. For this reason we are now recommending that you send in the 5330.20 with your Form 4 or Form 1 application to purchase or make a firearm restricted under the NFA.
We will create a sample Form 5330.20 to review. Here is a link to download a Certification of Compliance with 18 U.S.C. 922(g)(5)(B) ATF 5330.20

NFA 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.

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.

Free 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.

The 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.

Prior to November, the time to approve a Form 4 was less than 8 weeks. After November 20th, the number of people purchasing NFA items significantly increased and as a result the time to receive an approval on their ATF Form 4 or Form 1 increased to more than 6 months at their peak (26+ weeks).

Today I received a note from a client who obtained his approved Form 4 for his SBS only 59 days after submitting it to the BATFE. Hopefully this will be the norm and not the exception. Please let me know how long your Form 4 or Form 1 is taking for approval.

If you are wanting to contact the ATF to find out your status or check on a NFA firearms transfer to an individual, trust, corporation, or entity please call them at 304-616-4500.

Prior to November, the time to approve a Form 4 was less than 8 weeks.  After November 20th, the number of people purchasing NFA items significantly increased and as a result the time to receive an approval on their ATF Form 4 or Form 1 increased to more than 6 months at their peak (26+ weeks).

Good news as I have recently heard from several of our clients that the Approval process is beginning to shorten.  Last week I heard from a client who stated that his NFA Firearms Trust approval time was between 4 and 5 months. 

Last week there was an issue where an individual was contacted by the ATF in an effort to seize his Title II firearms because of an irregularity with his Trust. A Gun Trust Lawyer reviewed, amended, and restated the trust in question, creating a valid and enforceable trust that deals with the unique issues of NFA Firearms ownership, transfer, and possession. The BATFE had a justifiable reason to pursue the forfeiture action and the original reports on the subguns forum were accurate. After discussions with the BATFE and presentation of a valid Trust the BATFE decided to cease and desist their forfeiture action at this time and the individual is no longer in jeopardy of having his items seized, being arrested, or being fined.  The BATFE and individual have requested that the details not be disclosed.  The BATFE does not want to jeopardize similar ongoing investigations involving invalid trusts.  We can state that the issues involved with this action have been covered elsewhere on this website.

If you created a trust with Quicken or Legal Zoom, you should follow Legal Zoom's and Intuit's advice and have your trust reviewed by an attorney to avoid potential problems. The creators of these programs did not anticipate that individuals would be using the documents in situations that could result in criminal liability.

You may choose to have the trust reviewed to determine if the trust is valid, or reviewed to see if there are issues with the NFA that are not dealt with in your trust, but either way it is important to have your trust reviewed by someone who is familiar with estate planning as well as the NFA.

Joshua Prince alerted me to a blog post on a developing situation he ran across on Subguns where an individual used Quicken to attempt to create a trust for NFA purposes.  Unfortunately the BATFE has now decided that his Quicken trust was invalid and is seeking to seize his MAC-11 and Silencer.  He could also be subject to a prison sentence of 10 years and $250,000 in fines.

This is a very unfortunate situation that could cost the individual severely. Its important to remember that just because the ATF approves your transfer, it does not mean that you are legally in possession.  This is the second situation involving invalid trusts and the ATF that we have seen this month. It looks like the ATF is beginning to look more closely at the trust documents they are receiving.

If you created a trust for NFA purchases in Quicken, Legal Zoom, or used another generic trust that was not reviewed before buy a lawyer before submitting it to the BATFE, you should contact a NFA trust attorney to review your trust for validity.  If you need help finding a local NFA Trust Lawyer we can help.  We work with attorneys in more than 40 states including Florida Gun Trust lawyers and South Carolina NFA lawyers to help review and create valid NFA trusts.

Note: At this time the link to the subguns has been taken down because of questions.  We believe this posting is authentic based upon correspondence with the individual but will update this post as the situation and our agreement with the individual (if any) allows.

The FBI Criminal Background Check System (NICS) reported a 24% increase in December over last year.  Over 1.5 Million checks was an increase of 42% over November and the highest number of checks in history.

As a result in the unprecedented demand for the ATF Forms 4473 (5300.9) part I which was revised in August 2008 is runing low on inventory.  To address this shortage  ATF has posted a notice on its Web site authorizing a temporary measure of allowing FFL's to photocopy form 4473 in its entirety.

Of course, an option is to use the electronic form, E-4473, available from the ATF.gov Web site.

Leonard Elliot's store was raided by the ATF almost 3 years ago.  After a 3 day trial he and his father were found not guilty on all counts.

JPFO has an audio interview with Leonard Elliott about his ordeal. To listen to this interview click the following link leonard-elliott.mp3 target=new