By now you know that there are a lot of benefits to acquiring your NFA items through a properly prepared NFA Trust.
However, once you have your trust instrument in-hand, you are still faced with the daunting task of successfully navigating the application process with the BATFE. And this process has been made even more complex now that 41F is in effect.
In this article, I will walk you through the process starting from the moment you receive your trust instrument.
Let’s get started!
Step 1: Have your trust instrument notarized. This is crucial! Your trust does not come into existence until it is notarized. You will also need to sign and date any schedules attached to your trust.
Note: If the date your trust is notarized is later than the date on your ATF forms, this will be a problem since the entity submitting the application (the trust) did not legally exist on the date it supposedly submitted the form.
Step 2: Place the notarized original in a safe place after making as many copies as you need. This is no small task since you will need a copy to submit to the BATFE with any Form 4 or Form 1 application (which will NOT be returned to you), and a copy for each of the Joint Trustees, Successor Trustees, and Lifetime Beneficiaries. Additionally, you should place a copy in your range bag so that you have it with you at all times that you are in possession of a trust-owned NFA item.
Note: These copies should include all schedules as well as the main body of the trust instrument.
Step 3: Clearly identify the physical assets you initially transferred into the trust as trust property. You do this by taking a $10 bill and a single round of ammunition, placing them into an envelope with the name of the trust on it, and placing the sealed envelope in a secure place.
Note: The NFA items which are the subject of the application are not added to the trust until the application is approved.
Step 4: This is where the instructions diverge based upon the answer to one simple question, “Are you acquiring an existing NFA item or building a new one?”
If you are acquiring an existing NFA item then you should follow my guide for completing the new Form 4.
If you are building a new one (such as assembling an SBR or SBS or making a suppressor) then you should follow my guide for completing the new Form 1.
Step 5: Decide if you are going to add any non-NFA firearms into the trust.
The trust is perfectly capable of holding non-NFA items. However, most of my clients choose not to do so for two reasons:
1) Almost none of the benefits that a trust gives you for NFA items apply to regular firearms; and
2) Most people don’t like the idea of voluntarily notifying the ATF (via the copy of the trust that accompanies all Form 4 and Form 1 applications) of all the non-NFA firearms they own.
Note: Many clients have stated that they have been told they do not need to share their non-NFA asset list with the ATF. However, ATF Regulation 41F, which went into effect on July 13, 2016, makes it clear that any application must be accompanied by “complete and unredacted copies of [the] declaration of trust, with any trust schedules, attachments, exhibits, and enclosures.”
Consequently, most people hand-down their regular firearms in their will rather than intermingle them with their NFA trust assets. However, if you wish to add any non-NFA firearms or accessories to the trust at any time then I will be glad to help you with the update. Please contact me with a detailed list including Mfg, Model, Serial #, and Caliber and I will update your Schedule of Assets and send it back to you with instructions.