By now you know that there are many benefits to using an NFA trust to acquire your NFA items.
However, once you have your trust instrument in-hand, there is still much work to be done.
In this article, I will walk you through the process starting from the moment you receive your trust instrument.
Executing The Trust
Step 1: You must 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 is a problem. The entity submitting the application (the trust) must legally exist on the date it supposedly submitted the form.
Step 2: You should 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 number of copies. You will need one copy to submit to the BATFE with any Form 4 or Form 1 application. Please note that this copy will NOT be returned to you. You will also need a copy for each of the Joint Trustees and Successor Trustees. Additionally, you should place a copy in your range bag. That way, you will have it with you at all times that you are in possession of trust-owned items.
Note: These copies should include all schedules as well as the main body of the trust instrument.
One additional note: While it is not required, I highly recommend that you scan in all 17 pages of the signed and notarized trust and email a copy to me to be added to your client file.
Step 3: You should 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.
Adding NFA Assets to the Trust
Step 1: 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 NFA item (such as assembling an SBR or SBS or making a suppressor) then you should follow my guide for completing the new Form 1.
Adding Non-NFA Assets to the Trust
Step 1: You should decide IF you are going to add any non-NFA firearms into the trust.
Your NFA trust is perfectly capable of holding non-NFA items. However, you should be aware that 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.
All non-NFA items and accessories you wish to have owned by the trust should be placed on a printed list to be stored with the trust (see the notes on Schedule A of your completed trust) but only IF you want to add your non-NFA items or accessories to the trust. I have a sample spreadsheet you can use to track your collection available for download.
By automatically incorporating all listed items, you no longer need to update your Schedule A every time you buy or sell a non-NFA item.
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, contains this requirement. It states 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 it is easy to do so. If your trust was drafted since July of 2019 then your Schedule A will contain language allowing you to attach a detailed list of non-NFA items. If your trust was drafted prior to this date, then I will be glad to provide an update to your Schedule A with the latest language.