While at the NRA Firearms Law Seminar in Nashville, ATF ‘s attorney William Ryan made some interesting comments about the ATF, NFA, GCA and Gun Trusts:
- A trust can be a beneficiary of a will or other trust and obtain a tax free transfer using a Form 5 if the trust or will is drafted correctly.
- A Trust can be a beneficiary of a will if there is an order from the probate court directing the distribution to a trust, otherwise one might have to transfer to an individual on a Form 5 and then pay $200 to transfer items to a trust.
- ATF is still reviewing the 9500+ comments filed on 41P.
- ATF is not concerned about an executor being a prohibited person. (This seems to conflict with the original reason for 41P in the first place.)
- ATF likes lawyer drafted trusts, most trust problems are from gun store trusts, free trusts, or trust form that individuals try to create themselves.
- ATF examiners do not know the law, and have often made mistakes that can be cleared up by having your lawyer contact their legal department.
- ATF has seen many trusts which name the same individual as the beneficiary. It would appear that all of those people are just copying the trust from someone else. They believe that one day this random person could inherit thousands of NFA firearms.
- Between 2003 and 2012 trust applications increased 80,000 %.
- ATF stated that Gun Trusts can purchase and own both Title I and Title II firearms (those under the GCA and NFA).
With the recent increase in poorly written online trusts that have become available, ATF feels there will be a big business in fixing them down the road for those who have unknowingly received the free or fill in the blank trusts.
One of the worst examples of an online trust we have seen is the Easytrust being promoted by Silencerco. According to them, there may be as many as 1000 people who have already received this trust which contains numerous problems. For a trust that is only 4.5 pages long, it appears to have even more problems than a Gun Trust drafted from Quicken. The list of problems is huge, but the biggest problems include:
- The trust permits NFA violations throughout the document.
- The trust permits any trustee to sell your guns without your consent.
- The Trust permits trustees to take away your gun rights if in their opinion you can’t handle your own affairs.
- The trust directs distribution to beneficiaries upon your death without any written permission (a violation of the NFA)
- The instructions incorrectly state that the trust needs to be registered in many states where it does not (seems to be similar to the problem we reported with the quicken trust)
- Directs you to obtain an EIN number for their trust when it is not necessary.
I guess you get what you pay for. Some people are only concerned about purchasing items and do not think about the consequences to themselves nor others. It is wise to do a little research on Gun Trusts and learn why you would want a Gun trust for all your firearms and not one limited to NFA Guns like Easytrust or many other trusts which are not supported by lawyers.
Joshua Prince, a PA Gun Trust Lawyer, has written about the ATF statements on his blog Shocking Statements/Concessions by ATF at the NRA Firearms Law Seminar