Common mistakes when completing a Form 20

Posted on July 8, 2018 by John Pierce

Whenever you need to temporarily or permanently transport a Short-Barreled Rifle (SBR), Short-Barreled Shotgun (SBS), Machinegun, or Destructive Device (DD) across state lines, you will need an approved ATF Form 5320.20 (more commonly known as just Form 20) before doing so.

Because we often do not have the time to resubmit a Form 20 before a shooting competition or move, it is important that you do not fall victim to some of the more common errors that can occur with this form (especially when the items are owned by a trust).

Mistake 1)  Putting the wrong name for the registered owner

In box 1 of the Form 20 it asks for the name and address of the registered owner.  If your NFA items are owned by a trust then this should contain the name of the trust and not your name. If this is wrong the Form 20 will be denied.

Solution:  We are going to learn a single rule that will solve almost every problem with the Form 20.  “It should match the corresponding field on the approved Form 1 or Form 4 for the item in question.”

Mistake 2)  Mistyping the Manufacturer, Model, Caliber, Serial #, OAL, Etc.

The ATF matches these Form 20’s to the National Firearms Registration and Transfer Record (NFRTR).  Therefore, if you do not provide them the information as it was entered your Form 20 will be denied.

Solution:  The information for each item should match the corresponding field on the approved Form 1 or Form 4 exactly (and this is true even if you have subsequently come to believe that the approved Form 1 or Form 4 is incorrect, at least until such time as the information is corrected in the NFRTR).

Mistake 3)  Leaving a required field blank

Other than the fields listed above, there are fairly few required fields.  Make sure to answer the remaining fields as follows:

  • For temporary transportation, Box 3 From and To Dates must be filled in and should not exceed 365 days in length.
  • For permanent transportation, Box 3 From and To Dates must be filled in and should contain projected start and end dates for transporting the items.
  • For temporary transportation, Box 5 should contain: “Target practice, sporting events, and all lawful purposes” .
  • For permanent transportation, Box 5 should contain: “Permanent change of address”.
  • Boxes 6 and 7 must be filled in for both temporary and permanent transport.
  • Box 8 should contain something similar to one of the following (depending on circumstances): “Personal conveyance”, “Common Carrier”, or “Air Carrier”
Posted in Administrative Law, ATF, BATFE, Destructive Devices, Federal Law, Form 20, Interstate Move, Interstate Travel, Machine Guns, NFA Trusts, SBR, SBS, Short Barreled Rifles, Short Barreled Shotguns | Comments Off on Common mistakes when completing a Form 20

Can your aircraft be owned by your living trust?

Posted on July 8, 2018 by John Pierce

Just as is the case with automobiles, the answer to this question is “Yes it can!”

However, unlike an automobile registration where the trust itself is the registered owner, the FAA requires that one or more trustees register the aircraft in their own name with ‘as Trustee‘ appended.

The FAA requires the following when registering an aircraft as trustee of a trust:

  • An affidavit showing that each beneficiary under the trust is either a U.S. Citizen or a resident alien. This includes each person whose security interest in the aircraft is incorporated in the trust. If any beneficiary under the trust is not a U.S. Citizen or a resident alien, the trustee or trustees must provide an affidavit stating the trustee is not aware of any reason, situation, or relationship that would give the non-citizen a share of control greater than 25 percent to influence or limit the exercise of the trustee’s authority.  If I drafted your trust then I will prepare your affidavit for you free of charge.
  • A certified true copy of the complete trust instrument (in Virginia this is known as ‘copy certification’ and may be done by any Notary)
  • A bill of sale signed in ink or containing an acceptable digital signature from the present registered owner to the trustee(s) of the trust in their capacity.  If I drafted your trust then I will also prepare this bill-of-sale for you free of charge.
  • A completed Aircraft Registration Application (AC 8050-1) showing the trustee as applicant and containing an acceptable digital or ink signature of the trustee(s)
  • The $5 registration fee.  Make checks payable to Federal Aviation Administration.

IMPORTANT NOTE:  When transferring ownership into a trust, do not forget to contact your insurance provider.

Posted in Aircraft Trust, FAA | Comments Off on Can your aircraft be owned by your living trust?

Can your automobile be owned by your living trust in Virginia?

Posted on July 8, 2018 by John Pierce

This is a questions that I am often asked and the answer is “Yes it can!”  But that is only the beginning of the discussion.

The follow-up questions that you should be asking (and the respective answers) are:

1)  Should I put my car in just any trust?

No.  In order to maximize the benefits of placing your automobile into a trust you will want one that is properly drafted for the purpose.

2)  How do I transfer an individually-owned automobile into my trust?

You must complete the Assignment of Title by Owner section on the existing title.  You will place the trust name in the buyer field and the phrase ‘Placing in Trust‘ in the Sale Price field (see example below).

You will then need to complete the Application for Certificate of Title and Registration (VSA 17A) in the name of the trust in your capacity as Trustee.

Make sure that you select ‘Owned by an Individual’ on the second row (assuming the vehicle is not actually used for business purposes).

You will then  take the your trust instrument, title with completed assignment section, and application to your nearest DMV office to complete the process.

3)  Do I have to pay use-tax when I transfer an individually owned automobile into my trust?

Not if you have a properly drafted trust.

To transfer the automobile without being subject to use tax you will need to complete a Purchaser’s Statement of Tax Exemption (SUT 3).

In the Statement of Exemption section you will write the following:

Transferred to a trust for which I am a beneficiary

Then, in the paragraph number section below the Statement of Exemption reference paragraph 23.

Important Note:  If I didn’t draft your trust then you should consult with the attorney who drafted it to insure that your trust allows you to avail yourself of this Exemption.

4) If my trust owns my automobile, will it qualify for Personal Property Tax Relief (PPTR)?

Yes. Per the Virginia DMV’s guidance, “[A] qualifying vehicle ([as determined by] Va. Code 58.1-3523) is determined by the Commissioner of the Revenue (COR) of the county, city or town where the vehicle is garaged. In order to qualify for the tax relief, the motor vehicle must be owned or leased by a natural person or held in private trust and be used for nonbusiness purposes.”

That is why your answer to the checkbox on the VSA 17A above is so important

5)  Is there anything else I need to do when I transfer my automobile into a trust?

Yes.  Do not forget to contact your insurance provider.  By federal law the insurance itself will not change but your policy needs to reflect the new ‘owner’ of the automobile.

Please contact me if you would like to discuss the estate planning and privacy benefits of having a living trust hold your automobiles.

Posted in Automobile Trust, DMV, Estate Planning, Privacy, Virginia Law | Comments Off on Can your automobile be owned by your living trust in Virginia?

Who is my CLEO?

Posted on July 5, 2018 by John Pierce

Prior to the implementation of 41F, trust applicants were not subject to the Chief Law Enforcement Officer (CLEO) sign-off that was required of individual applicants.

As part of 41F, this requirement was changed from an affirmative ‘sign-off’ to a mere ‘notification’.  However, the notification requirement was then extended to apply to all ‘responsible persons‘ of an NFA trust.

Therefore, my trust clients often ask the question:

“Who exactly is my CLEO?” 

In Virginia, this question is further complicated by the fact that we have independent cities which are separate and distinct political subdivisions from the counties which surround them (which is not the case in many other states).

So … to answer this question, one must first determine whether they are a resident of an independent city or merely a county.  To do this, you may use the Locality Code Lookup tool made available by the Virginia Department of Taxation.

The good news is that once you have identified your jurisdiction, you have a number of choices which all meet the ATF definition of ‘CLEO’:

“the local chief of police, sheriff …, head of the State police, or State or local district attorney or prosecutor are acceptable”

While any of these are acceptable, I would recommend that you notify either the police chief or the sheriff in your jurisdiction.  Since 41F removed the sign-off requirement and only requires notice, the selection of which party to notify is no longer critical.

IMPORTANT NOTE:  As mentioned above, if you live in an independent city, you are NOT part of the surrounding county and officials serving there are NOT your CLEO.

Disclaimer:  As always, this information is presented for educational purposes only and does not give rise to an attorney-client relationship. Additionally, I am licensed to practice law in the Commonwealth of Virginia and this answer may not be appropriate for other jurisdictions.

Posted in 41F, ATF, CLEO Notification, Form 1, Form 23, Form 4, NFA Trusts | Comments Off on Who is my CLEO?

Can I purchase a stripped lower from an out-of-state dealer?

Posted on May 25, 2018 by John Pierce

I was recently contacted by a gun owner who attempted to purchase a stripped lower from an out-of-state dealer and the dealer refused the sale.  The dealer had completely confused the issue by telling him that stripped lowers must be sold as ‘pistols’.

The dealer was 100% correct that non-residents may not purchase frames or receivers from a licensed dealer.  However, their explanation as to why was just plain wrong.

Let’s see if we can untangle the issue …

  1.  18 U.S.C § 922(b)(3) makes it a crime for a dealer to sell any firearm, other than a rifle or shotgun, to a non-resident.
  2. Frames and receivers are neither handguns nor long guns.
  3. Therefore, frames and receivers do not fall withing the exception for rifles and shotguns and cannot be sold to non-residents.

The ATF covered this in the following 2009 Open Letter to FFLs.

Download (PDF, 104KB)

The part of the answer from the dealer that was wrong is his assertion that frames or receivers must be sold as ‘pistols’.  This is not correct at all.  The 4473 recognizes this distinction in box 16 and the associated instructions for this field.

Download (PDF, 903KB)

Receivers should always be transferred on a 4473 as an ‘other’.  This gives you maximum flexibility as to what may be built from the receiver.

Posted in 4473, 80% Lower, ATF, ATF Guidance Letters, BATFE, Federal Law, FFL Issues, Interstate Firearm Transfers, Non Resident Issues, Purchasing Firearms | Comments Off on Can I purchase a stripped lower from an out-of-state dealer?