Many people ask what is a NFA Trust and how is it different from a living trust or revocable living trust.  A NFA trust is a trust document that has been customized to deal with the specific legal issues surrounding the transfer, possession, and use of firearms that are restricted by the National Firearms Act.  These items include silencers, short-barreled rifles, short-barreled shotguns, machine guns, AOW's and destructive devices.  Many people do not know that in most states it is legal to own some or all class III firearms.

There are many types of revocable trusts.  We work with lawyers in over 30 states to provide the best protection for your family and friends though a NFA Firearms Trust.  Each trust is customized to deal with the unique issues of ownership and possession that are required for ownership in your state.  An interview process is necessary to determine who must be included in the trust, or how to make changes not to include those people.  In addition, it is important to determine the best way to allow others access to the weapons if you choose. 

When creating a trust for NFA items, it is important to make sure the trust is valid, you understand how to use the trust and what the trust does, how to make a purchase that does not create a technical violation of the NFA as well as how to avoid the common violations including constructive possession and transfer.  Many people believe that it is OK to let someone else use your Class 3 weapon if you are present.  A careful reading of the NFA show that the word transfer includes this type of action and thus is prohibited under the NFA.

In addition, when you fill out your Form 4 it is important to fill out the Form 4 correctly.  To download a sample Form 4 with instructions on what information needs to be filled out see our ATF Form 4 instruction page.

If you would like more information on how an NFA trust can help you, or to have your previously created Trust reviewed for compliance call us or fill out our contact form so that we can get you in touch with a NFA gun trust lawyer in your state.

Many People have asked, How to fill out a form 4 when making class 3 purchases.  Because of this, we have added a page on this topic.  Please see

How to Fill out an ATF FORM 4 For NFA Class 3 Purchases

If you need help forming a trust, please Contact to find a Gun Trust Lawyer in Your State.

The National Firearms Act defines what is criminal conduct.  The prohibited activities include but are not limited to:

1. Engaging in the business of firearms (manufacturing, importing, selling) without a license and tax;
2. Receiving a firearms in violation of the act;
3. Possessing a firearms in violation of the NFA;
4. Receiving or possessing a firearms not registered to yourself in violation of the NFA;
5. Transferring or making a firearm in violation of the NFA; or
6. Removing, changing, or obliterating a serial number of an NFA firearm.

Many individuals are under the mistaken belief that they can allow someone to shoot their NFA firearm when in their possession.  Although a dealer license allows this, the individual license does not and both individuals would be in violation of the NFA and subject to the criminal penalties as such.

If you would like someone else to be able to use or be in possession of your NFA firearms, you should consider a NFA gun trust or business entity to purchase or hold the item in.  For more information Contact a NFA Lawyer.

Violations of the NFA are punishable by 10 years in prison, forfeiture of all devices or firearms in violation, and the individuals right to own or possess additional firearms in the future.  In addition, there is a penalty of $10,000 for each of certain violations.

In addition, a willful attempt to evade or defeat a tax imposed by the National Firearms Act is also a felony which is punishable by up to 5 years in Jail and a $100,000 fine under the tax evasion statutes.  This penalty could be increased to $250,000 for individuals and $500,000 for corporations.

This means you could be looking at a maximum of 15 years in Jail and $510,000 in penalties for a violation.   Many violations can be avoided by proper ownership and knowing who can be in possession and use the Title 2 firearms which are restricted under the NFA.

There may be additional state penalties in addition to the federal one mentioned above.  A properly constructed NFA trust is the best way to own these items and permits the best flexibility as to possession and use.  Although a Revocable trust can provide benefits many individuals create invalid trusts or trusts that do not address the specific issues that relate to NFA weapons ownership and subject themselves to potential violations. 

To create a Valid NFA Firearms Trust that addresses your specific family situation, please CONTACT A NFA lawyer.

NFA TRUST FORMATION is a process of creating a Trust for the specific purpose of Purchasing Class III firearms and  transferring Class III firearms.  A NFA TRUST is specifically created to comply with the TItle II requirements in dealing with Class 3 firearms.  Class 3 Firearms are items regulated by the National Firearms Act ( NFA) and are typically sound suppressors, silencers, short-barreled shotguns or shotguns, and machine guns.

Most NFA Trusts are formed to bypass a CLEO signature, but there are many additional advantages to purchasing class 3 firearms with a NFA Firearms Trust.  These include dealing with issues of constructive possession, transfer of the assets upon death, and avoiding many of the improper purchases and transfers that contain criminal penalties.

NFA trusts are private, no one knows about them unless you disclose the information
Mulitple people can be in possession or use the NFA class 3 firearms.
You can protect your spouse from potential criminal liability that is assocated with individual ownership.
No CLEO sign off is reqired, no fingerprintes
The time to acquire items is significantly reduced

Generally when creating a NFA trust, one must look to the laws of their state and how they affect the right to own a class III firearm.

What happens if you live in New York or any state where some Class III firearms are banned but plan to use and keep them in another state where they are legal?  Can you a resident of a state where the item is banned purchase, store, and use the items in a state where its legal.

According to the ATF,  an individual can purchase an item restricted by the NFA that is not permitted in the state of residence of the trustee, when the trust will be located, and item will be only used and maintained in states where it is legal.

This means a NY resident can purchase a class III firearm in PA when it is under a PA trust and the firearm is kept and used in PA.

Some NFA firearms collectors, who are not engaged in any firearms business, have been known to acquire a GCA license to deal in firearms and pay the NFA special tax to acquire NFA firearms for their personal firearms collections. This is not a wise thing to do and violates the National Firearms Act.

Most individual acquire NFA firearms for the following reasons:

(1) to acquire firearms from nonlicensees residing out-of-state;
(2) to circumvent requirements imposed on individuals to provide their fingerprints and photographs in order to receive NFA firearms and law enforcement certifications authorizing their receipt of such firearms;
(3) to purchase and use items that they are not legally able to obtain as an individual; and
(4) to avoid NFA transfer tax on firearms they receive from FFL's/SOT's.

Warning: These transactions violate the NFA and can only lead to trouble for the individual. In these instances, the individual has committed Federal felonies by falsely stating on a license application and special tax return that the collector intends to conduct a firearms business. Any NFA firearms received tax free by the collector are subject to transfer tax and the collector's receipt of the firearms tax free violated the NFA. As held in ATF Ruling 76-22, these transfers are unlawful and the firearms received are subject to seizure and forfeiture.

If you hold NFA restricted firearms that are of a personal use in nature, under a business license, you should consider creating a NFA Firearms Trust to hold the title to these items to avoid being in violation of the National Firearms Act.

Do you want to purchase a Class 3 item?  These include Silencers, Sort barreled rifles, and Machine Guns.  You need to check and see if you are allowed to own the weapon you desire.

1) Check your state to see if that weapon is permitted.
2) Check to see if your local CLEO (Chief Law Enforcement Officer) will sign a Form 4.
3) Determine who needs to be able to have the items in their possession.
4) Are you married?  If so does you spouse or anyone else know the combination to your gun safe?
4) Determine who is a backup person in case the people in (3 & 4) are not able to be in possession, choose not to be in possession, or die.
5) Determine who you want to have the items once you die.
6) Are these people under 18?  At what age do you want them to be able to use or take possession of the firearms?  Does the person in (5) have the ability to determine if it would be a good idea for your beneficiaries to take possession?  (both from a legal, maturity, and responsibility perspective)

Have this information as well as the addresses, counties, age (if under 21) and relationship when you contact a lawyer.  If you need help finding a lawyer familiar with Gun Trusts in your state, you can Contact us and we will put you in touch with someone licensed in your state.

General information on what items can be purchased in your state can be found under your state's link on this website or from a local gun dealer who sells the items.

Continue reading "How to set up a revocable living trust to purchase National Firearms Act (NFA) or Class 3 weapons" »

Constructive possession is a legal fiction to describe a situation where an individual has actual control over property without actually having physical control of the same assets. At law, a person with constructive possession stands in the same legal position as a person with actual possession.

When an individual purchases a class 3 firearm, they are the only one who is able to be in possession of the item. They have a duty to safeguard the use and possession of the restricted firearm from all others.

This includes their friends, spouse, children, or anyone else.  Generally the individual accomplishes this by placing the restricted class 3 firearms in a gun safe.

What happens if their spouse or someone else knows the combination to the gun safe?  That person is in Constructive possession of the item.  In addition, the rightful owner, is in violation of improperly transferring the item to the other.  Both people can face criminal penalties which include jail time, monetary fines, and confiscation and destruction of the items.

How Do I Protect Myself From Constructive Possession?  One way is to make sure that no one ever has the combination to your gun safe, or has access to the items.  You should not let other people use, handle, or have the ability to be in possession of the items.

Another way is to provide the ability for others to be in constructive possession. This can be done using a business entity such as a corporation, LLC, or NFA Gun Trust.  The trust can be written in such a way as to allow another or several individuals to be in possession of the items.

This may sound simple, and generally it is, but there are many things that need to be discussed prior to including someone as a co-trustee on a Gun trust.  A few of the issues include:

You should Contact  and discuss the concept of Constructive possession with a Gun Trust Lawyer before creating or modifying NFA Gun Trust.

If you live in a city in where the Chief law Enforcement Officer (CLEO) will not or easily sign a Form 4, there are several solutions.
Class 3 Weapons include suppressors, , short barrel rifles, machine guns, and other destructive devices.

The most common solution is to create a NFA revocable trust to hold title to the firearm or class 3 items. A NFA Gun Trust, Class 3 Firearms Trust, Florida Limited Liability Company, or Florida Corporation is a legal entity established under state law.

For NFA purposes many individuals prefer the a Revocable Trust over a corporation or LLC because the cost is far less on an ongoing basis. Business entities typically have state filing fees of around $150 a year. In addition there are the costs of tax preparation, compliance and filings with the IRS. In Florida and many other states Revocable Trusts like the NFA or Firearms trust do not require any disclosure or public filings. This means the ownership, control, and management is private. Although most Florida Revocable or Living Trusts can hold firearms or other class 3 items, many are not properly setup to deal with the issues involving firearms and other items which are regulated by the National Firearms Act (NFA). If the NFA is violated, the people in possession, and who transferred the items are subject to criminal charges, substantial fines, and forfeiture of not only the class 3 items in question but all firearms in the possession or ownership. ($250,000 penalty, 10 years in prison, and forfeiture of items) The gun or firearms trust must give the Trustee instructions and special powers so that they can legally manage for unplanned events. Weapons and other assets in a Firearms Trust can not be distributed like other assets upon the death or incapacity of the person who placed the items in the trust(The Grantor or Settlor). There are many advantages to a firearms trust, if you own or plan to purchase a class 3 items you should contact a lawyer who is familiar with these issues and can design a trust to protect you and your family from liability. If you are in Florida you can contact me and if you are in another state I would be happy to get you in touch with a lawyer in your state who can provide information on NFA Gun Trusts.

Violators may be fined up to $250,000, and imprisoned up to 10 years, or both.

In addition, any vessel, vehicle or aircraft used to transport, conceal or possess an unregistered NFA firearm is subject to seizure and forfeiture, as is the weapon itself.

Basically, there are 2 ways that an individual (who is not prohibited by Federal, State, or local law from receiving or possessing firearms) may legally acquire NFA firearms:

1. By transfer after approval by ATF of a registered weapon from its lawful owner residing in the same State as the transferee.
   

2. By obtaining prior approval from ATF to make NFA firearms.

[27 CFR 479.62-66 and 479.84-86 ]

In addition, a Corporation, LLC, or Firearms Trust may acquire NFA Firearms that are nor prohibited by Federal, State, or local law.

To create a NFA Trust Contact a Gun Trust Lawyer

This blog is dedicated to providing information to help residents of every state understand the current laws and regulations related to the purchase, sale, possession, and transportation of Guns and other weapons regulated by the NFA. In addition, we will attempt to put you in contact with a lawyer in your state who can help in the purchase, manufacture, possession, or transfer of Silencer, Short-Barreled Rifle, Short Barreled Shotgun, Machine Gun, Destructive Device, or Any Other Weapon regulated by the NFA.

If you are a lawyer in and interested in helping clients in your state preserve their rights to purchase class 3 items please contact us.

If you are interested in a NFA Trust to purchase Class 3 items and would like to find someone to help in the preparation of a Gun Trust you should contact a NFA Gun Trust Lawyer.

THE NATIONAL FIREARMS ACT
TITLE 26, UNITED STATES CODE, CHAPTER 53 INTERNAL REVENUE CODE

The National Firearms Act (NFA) is part of the Internal Revenue Code of 1986. All administration and enforcement of the Internal Revenue Code, with the exception of the NFA, is by the Secretary of the Treasury. The ATF administration and enforcement was transferred to the Department of Justice under the Homeland Security Act of 2002.

Teh Attorney General is now in charge of all administration and enforcement of the NFA, were transferred to the Attorney General. The definition in Section 7801(a)(2), Title 26, V.S.C., we chagned to provide that references to the term "Secretary" or "Secretary of the Treasury" in the NFA shall mean the Attorney General.

Chapter 53 - Machine Guns, Destructive Devices and Certain other Firearms is broken in to several sections
Subchapter A Taxes
Part I Special Occupational Taxes

§ 5801 Imposition of Tax
§ 5802 Registration of importers, manufactures, Dealers

Part II - Tax on transferring firearms

§ 5811 Transfer Tax
§ 5812 Transfers

Part III - Tax on making firearms

§ 5821 Making Tax
§ 5822 Making

Subchapter B General Provisons and Exemptions
Part I - General Provisions

§ 5841 Registration of firearms.
§ 5842 Identification of firearms.
§ 5843 Records and returns.
§ 5844 Importation.
§ 5845 Definitions.
§ 5846 Other laws applicable.
§ 5847 Effect on other laws..
§ 5848 Restrictive use of information.
§ 5849 Citation of chapter.

Part II - Exemptions.

§ 5851 Special (occupational) taxes.
§ 5852 General transfer and making tax exemption.
§ 5853 Transfer and making tax exemption available to certain governmental entities.
§ 5854 Exportation of firearms exempt from transfer tax.

Subchapter C - Prohibited Acts

§ 5861 Prohibited acts.

Subchapter D- Penalties and Forfeitures

§ 5871 Penalties.
§ 5872 Forfeitures.

Download The National Firearms Act in PDF

The National Firearm Act of 1934 was enacted in reaction to activities of gangsters and outlaws of the time. The original law was passed as tax legislation in order to discourage ownership of certain firearms and destructive devices without creating an outright prohibition of the items. The tax on the weapons of $200 was a substantial amount of money in 1934. Because criminals were unlikely to register their NFA weapons, the government was able to use the possession of the weapons without proper tax as a tool to arrest and stop criminal activity. At the time the enforcement of the NFA was the responsibility of the Department of the Treasury.

The National Firearms act controls the ownership, transfer, and possession of a limited set of devices which include machine guns, silencers, short barreled rifles, and short barreled shotguns by requiring federal registration and a tax stamp for each device owned or transfered. The tax stamp is acquired in the registration process and requires specific paperwork. This paperwork referred to as a form 4 or form 1 typically requires a signature of local law enforcement, fingerprints and a payment of the $200 tax. Later the tax on 'any other weapons was changed to $5. The tax is payable at manufacture and each time the NFA device changes ownership except when it is inherited or a dealer acquires the device.

The NFA also required serial numbers on firearms and made it unlawful to alter them. The process had the effect of registering all manufacturers, importers, and dealers.

In 1986, the Firearm Owners Protection Act made the manufacture of new machine guns for the non-government agencies illegal. Machine guns manufactured prior to 1986 can continue to be bought and sold. The limited supply of these devices has cause the prices to rise on a yearly basis.

Currently the National Firearms Act is administered by the National Firearms Act Branch of the BATFE or the ATF as it is often referred to.