Most of 41P is gutted by change to CLEO Notification

Tonight we found a copy of the proposed final rule for 41P.  It can be downloaded from this link 41P final.pdf

In general, most of what the public was concerned about was removed from 41P by changing the CLEO Certification requirement that was proposed for trusts to be a CLEO Notification.

It will not take effect until 180 days after publication in the Federal Registry so there is still time to purchase items under the existing rules and more reason than ever to create your Gun Trust now.

When 41F the new name for 41P takes effect it will not be retroactive.  That is all applications submitted under the current rules will continue to be processed. In addition, there is no requirement to comply with the new rules for previously approved applications or legal entities like Gun Trusts.  On page  198 ATF states “The final rule is not retroactive and therefore the final rule will not apply to applications that are in ‘pending’ status, or to previously approved applications for existing legal entities and trusts (Gun Trusts) holding NFA items.”

While I am still reading the 248 pages, so far here are the highlights.

  1. The final rule only requires that the applicant maker or transferee, including each responsible person for a trust or legal entity, provide a notice to the appropriate State or local official that an application is being submitted to ATF
  2. The final rule also adds a new section to ATF’s regulations to address the possession and transfer of firearms registered to a decedent. The new section clarifies that the executor, administrator, personal representative, or other person authorized under State law to dispose of property in an estate may possess a firearm registered to a decedent during the term of probate without such possession being treated as a “transfer” under the NFA. It also specifies that the transfer of the firearm to any beneficiary of the estate may be made on a tax-exempt basis.

Amendments to§ 479.62 proposed to change the following for Trusts:
1. Provide that all information on the Form 1 application must be furnished for each responsible person of the applicant;
2. Each responsible person must comply with the identification requirements prescribed in the proposed§ 479.63(b); and
3. Require the applicant (including, if other than an individual, any responsible person), if an alien admitted under a nonimmigrant visa, to provide applicable documentation demonstrating that the applicant falls within an exception to 18 U.S.C. 922(g)(5)(B) or has obtained a waiver of that provision.


Additionally, amendments to a Form 1 or Form 4, where the applicant is a trust, or corporation, proposed to:

1. Provide that the applicant must be identified on the Form 1 / Form 4 application by the name and exact location of the place of business, including the name of the county in which the business is located or, in the case of a trust, the address where the firearm is located. In the case
of two or more locations, the address shown must be the principal place of business (or principal office, in the case of a corporation) or, in the case of a trust, the principal address at which the firearm is located;

2. Require the applicant to attach to the application:

• A completed ATF Form 5320.23 for each responsible person. Form 5320.23 would require certain identifying information for each responsible person, including each responsible person’s full name, position, Social Security number (optional), home address, date and place of birth, and country of citizenship;
• 2 x 2-inch passport style photographs of each responsible person taken within 1 year prior to the date of the application;
• Two properly completed FBI Forms FD-258 (Fingerprint Card) for each responsible person. The fingerprints must be clear for accurate classification and should be taken by someone properly equipped to take them; and
• In accordance with the instructions provided on Form 5320.23, a certification for each responsible person completed by the local chief of police,.sheriff of the county, head of the State police, State or local district attorney or prosecutor, or such other person whose certification may in a particular case be acceptable to the Director. The certification for each responsible person must be completed by the CLEO who has jurisdiction over the area in which the responsible person resides. The certification must state that the official is satisfied that the fingerprints and photograph

Beneficiaries not not considered responsible persons
Therefore, the Department believes that it is not necessary to positively identify a beneficiary as a “responsible person” within the definition unless they meet the definition of a responsible person. – The ability to poses a NFA firearms, would make the beneficiary a Responsible person under the new definition when implemented.

NOTE: Some of the poorly written trusts we have reviewed permit beneficiaries to have possession.  Those trust, would require beneficiaries to treated as a responsible party under 41F and have the same requirements as a trustee.


What about a Successor Trustee, are they are responsible party?

Under some trusts it is possible that a successor trustee would be considered a responsible person, under our trusts, they Successor Trustees have no rights as a successor trustee until they become a trustee and as such would not be a responsible person.

There is no requirement to update the ATF with changes in responsible persons after an application.

Page 124: Department is not requiring in this final rule that new responsible persons submit a Form 5320.23 within 30 days of any change in responsible persons.

So what does all this mean, most of the benefits for a trust will remain intact and a properly drafted Gun Trust is still the best way to purchase, own, possess, and transfer NFA firearms. Watch this page for more updates over the next few days

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