NFA Gun Trust Lawyer Blog

Some dealers are currently providing trusts to their customers to avoid the Chief Law Enforcement Officer (the “CLEO”) sign-off that is required for individual purchasers of Title II Firearms. When a non-lawyer dealer fills out or creates a trust for an individual they are violating their state’s unauthorized practice of law (“UPL”) statutes. Many dealers and manufactures are providing generic trusts that do not address the unique issues of the NFA and often do not comply with the state requirements for proper execution. In the past, the ATF has accepted many of these invalid trusts and approved the transfer of these firearms. Unfortunately for such individuals, if the trust is invalid, the possession that has been approved did not take place, and the individual or individuals who are in possession or using the items are in violation of the NFA. These dealers are taking a big risk in providing improper trusts to their customers. They are not only violating the state UPL statutes, but can also be liable for violating the NFA, in addition to civil liability for the bad advice which results in the consumers’ property loss, civil penalties, and/or criminal prosecution.

Be careful when copying a form or getting a trust from someone who is not a licensed attorney. Many individuals ask why we work exclusively with local licensed attorneys in each state. We do this to maintain the quality of our documents and to make sure that a licensed attorney in your state reviews the documents and makes changes based upon your local state laws.

If you want to create your own Gun Trust without a lawyer, there is a real online Gun Trust that can be created in less than 10 minutes.

Many individuals are using Quicken, LegalZoom, or traditional revocable trusts to purchase firearms regulated by the NFA. A traditional trust is not appropriate for the purchase, transfer, or use of NFA firearms because of the unique characteristics of these firearms. A typical revocable trust is created to protect an individual from others who might abuse their powers and detrimentally affect their interest in the property that is owned by the trust. These traditional trusts are problematic for holding assets regulated under the NFA because they do not consider the penalties and legal obligations of those involved with the trust in relation to state and federal laws. As lawyers we have a duty to become knowledgeable and competent in the areas in which we practice or associate with someone who can provide the knowledge necessary to provide the legal service we are offering. A lawyer who provides a traditional trust to a client with the intent of purchasing, holding, transferring, or using NFA firearms opens themselves up to a malpractice claim because the traditional trust instructs individuals to take actions which violate the NFA. While this may not be apparent during the grantor’s life, the violations often come to light upon the death or incapacity of the grantor.

During the life of the grantor, while the problems may be minimized, there are still potential problems with a traditional revocable trust when used to hold NFA firearms. Most gun dealers and lawyers do not understand the importance of purchasing the items correctly or protecting others from constructive possession. While the ATF does not appear to be prosecuting individuals for the improper purchase or storage or sharing of these items at this time, there is no intent required in the NFA and a policy change could subject many individuals, their families, and friends to the penalties involved in a NFA or state violation.

UPDATE If you want to create your own Gun Trust without a lawyer, there is a real online Gun Trust that can be created in less than 10 minutes.