The Obama Administration is pushing for regulatory changes to NFA trusts

Posted on August 23, 2013 by John Pierce

Today The Hill’s regulatory blog reported that the Obama Administration is putting its weight behind regulatory rulemaking to close what they are calling the “gun trust loophole.”

While this administration likes to describe any lawful activity with which it disagrees as a ‘loophole’, the current usage of ‘gun trusts’ is neither a loophole nor a problem.

Rather … it is a solution to a problem that the ATF has known about for some time and has, until now, been unwilling or unable to correct.

Under current ATF regulations, an individual who wishes to purchase an NFA item must submit an application that includes fingerprints, photographs, and a signed statement from the chief law enforcement officer (CLEO) in the applicant’s jurisdiction stating that the CLEO has been informed of the proposed purchase and is not aware of any legal reason the person should not possess the item.

However, in many jurisdictions, the CLEO simply refuses to sign the application, effectively banning all of those in that jurisdiction from legally acquiring NFA items. Rather than fixing this issue, the ATF has allowed this backdoor ban to continue for many years and it is this problem that has given rise to the ‘gun trust’ (or NFA trust) phenomenon.

Why?  Because under current regulations a corporate or trust entity which acquires an NFA item must still submit an application but the fingerprint cards, photographs, and most importantly, CLEO sign-off are not required.

And while the CLEO sign-off backdoor ban was the impetus for the NFA trust movement, it is really no longer the sole reason that these versatile instruments are so popular amongst NFA collectors.

Attorneys across the country have produced instruments that provide significant benefits to the settlor in addition to a simplified application.  A properly formed NFA trust will help protect your NFA items from unforeseen changes in your personal situation, enhance the usability of the items by others you choose, and simplify the passage of the items to your beneficiaries outside of probate.

The proposed rule would do nothing to negate those benefits.  It would simply do 3 things:

1)  It would extend the CLEO sign-off to trusts and corporate buyers as well as individual applicants;

2)  It would require fingerprints and photographs of every “responsible person” in a trust or corporate entity be sent when the applicant is not an individual in order to standardize these requirements.

If this proposed rule becomes law, it will effectively allow CLEO’s to once again enact a de-facto ban on NFA ownership by law abiding citizens.

NFA items are expensive, already heavily regulated, and virtually unheard of in criminal hands.  In fact, to the best of my knowledge, there have only been two crimes committed with NFA items during the last 79 years and one of those was a killing by a law enforcement officer that was later ruled a homicide.  This despite the fact that there are over a quarter of a million legally owned pre-1986 machine guns in the ATF registry and untold tens of thousands of AOWs and suppressors.

Passage of this proposed rule would do nothing to enhance safety but would only add additional bureaucratic roadblocks in front of law-abiding collectors and swamp ATF staff who are already overwhelmed.  The result would be a drastic increase in the processing time for NFA applications and a collapse of the booming suppressor industry.  It is this, I suspect, that is the true goal of the administration.

NFA collectors and gun rights advocates are advised to keep their eyes on this proposed rule. If the report in The Hill is correct, we should expect to see the notice and comment period commence on or around November 20th … and comment we shall!

Posted in ATF, BATFE, NFA Trusts, Regulatory Rulemaking | Comments Off on The Obama Administration is pushing for regulatory changes to NFA trusts

Form 1 … We have a problem

Posted on August 20, 2013 by John Pierce

Pay_To_The_Order_OfWhen completing a Form 1 application for the manufacture of an NFA item on which you will be paying the applicable tax, the text accompanying Question Number 1 always causes confusion for the new collector.

“So what exactly is so confusing?”

Well … For starters, it tells you to make your check or money order out to ‘The Department of the Justice’.

When first reading this, everyone immediately says to themselves “What’s the deal with the awkward wording?  Is it really supposed to be The Department of the Justice?”

The answer of course is “No.  It is not.”

“So how did that wording make it onto the Form 1?”

While I cannot say for sure, most NFA collectors seem to agree that when the text was updated from ‘The Department of the Treasury’, someone just deleted ‘Treasury’ and replaced it with ‘Justice’.

But the awkward wording is not the only problem with this text.  What generates far more concern for the observant applicant is that this text directly conflicts with the instruction sheet which accompanies Form 1.

On the first page of the instruction sheet, the instruction regarding remittance reads as follows:

g. Remittance. If the application is subject to the making tax, a check or money order, made payable to the Bureau of Alcohol, Tobacco, Firearms and Explosives, in the amount of $200.00 must be submitted with the ATF Form 1. Do not send cash.

Based upon the experience of countless friends, my recommendation to my clients is to make all payments payable to BATFE.  No one to my knowledge has ever encountered a problem with having such a payment rejected.

Disclaimer:  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 states. You should always consult an attorney licensed to practice law in your state who is familiar with NFA trust planning before making decisions about your own estate plan.

Posted in ATF, BATFE, Estate Planning, Form 1, NFA Trusts | Comments Off on Form 1 … We have a problem

NFA Myths: Do you have to be 21 to buy NFA items?

Posted on August 20, 2013 by John Pierce

18_NFAOnce again a client has asked me the age-old question “Do you have to be 21 to buy NFA items?”

The answer, as is often the case with legal matters, is “It depends.”

In fact, the National Firearms Act (NFA) does not speak to age at all.

The Gun Control Act of 1968 (GCA) does impose a minimum age of 21 in order to purchase NFA items but only when the purchase is being made from a licensed dealer.

This leaves a number of ways for someone who is at least 18 years of age, and who is not otherwise prohibited from possessing an NFA item under state law, to legally acquire NFA items.

  1. They may acquire them in an intrastate transfer from an individual, trust, or non-dealer corporate owner.  Having said that, even in jurisdictions where the CLEO is NFA friendly, you might have trouble getting the CLEO to signoff for an 18 year old.  So I would definitely recommend using an NFA trust.
  2. They may manufacture an NFA item (such as an SBR) using a lower receiver that they legally own.  The ATF has actually issued a determination letter on this topic.
  3. They may acquire them as part of an inheritance.  This would generally occur on a Form 5.

Owning an NFA item is a serious responsibility and many NFA trust clients still direct their successor trustees to not distribute to beneficiaries until they reach the age of 21. But that is a matter of the settlor’s wishes and not a prohibition built into federal law.

Disclaimer:  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 states. You should always consult an attorney licensed to practice law in your state who is familiar with NFA trust planning before making decisions about your own estate plan.

Posted in ATF, BATFE, Estate Planning, Form 1, Form 4, NFA Trusts | Comments Off on NFA Myths: Do you have to be 21 to buy NFA items?

NFA Myths: Did I agree to 24/7 warrantless inspections?

Posted on August 17, 2013 by John Pierce

ATF_Agent_SearchOne of the most common myths that I hear about owning NFA items involves the supposed ability of ATF officers to search your home at any time of the day or night without the need for a warrant.

Let’s just make this crystal clear.  This myth is not true!  You did not waive your 4th Amendment rights when you decided to legally own an NFA item.

“So where does this myth come from?”

I believe the myth originates from the fact that the ATF has the right to inspect the premises and inventory of an FFL holder (class 3 or otherwise).

However, even in that case the right to inspect is not 24/7 nor is it unlimited.  The ATF only has the right to conduct this inspection during the FFL’s normal business hours.  In addition, to quote from the BATFE’s own compliance fact sheet, “With certain exceptions, the GCA allows ATF to conduct one warrantless, annual compliance inspection of a federal firearms licensee (FFL).”

Owning an NFA item comes with a number of responsibilities.  But allowing the ATF unfettered access to your home is not one of them.

Posted in ATF, BATFE, Fourth Amendment, NFA Trusts | Comments Off on NFA Myths: Did I agree to 24/7 warrantless inspections?

Using Your NFA Trust

Posted on July 30, 2013 by John Pierce

Using your NFA trust

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.

NOTE:  Some of my clients reading these instructions were directed here when I restated their existing trust.  The following steps are equally applicable to a trust that is being created and one that is being restated.

Executing The Trust

Step 1:  You must have your trust instrument notarized.  This is crucial!  Your trust does not become effective until it is notarized.  You will also need to sign and date any schedules attached to your trust.

Places that offer notary services include your local bank and UPS/FedEx stores.  I do NOT suggest using online options or services that have you digitally sign the document since the ATF has recently started denying applications where the trusts are digitally signed and the ATF does not recognize the validity of the signing certificate.  It is best to simply avoid the issue and have it manually notarized.

You will only need to have one original copy of the trust notarized and may then make additional copies from that original.

Step 2: You should place the notarized original in a safe place after making as many copies as you need.  Do not give your original to the gun store or mail it to the ATF!

How many copies should you make?  You will 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.

While the advent of the eForms system has largely eliminated the need for paper applications, I should note that you will also need one copy to submit to the BATFE with any paper Form 4 or Form 1 application that you may submit.  Please note that this copy will NOT be returned to you.

Note: These copies should include all schedules as well as the main body of the trust instrument.

While not legally required, I HIGHLY recommend that you email me a scanned PDF copy of all 17 pages of your signed and notarized trust in case yours is ever lost or destroyed.  This would also allow me to provide a copy to your family if you passed unexpectedly and they could not find an executed copy. 

Email the PDF of the Notarized Trusts to: [email protected].

You will also need this PDF version to use the eForms system.

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

IMPORTANT:  If your FFL is using a kiosk or the eforms system then the data entered there will create your Form 4 and you do not need to do a separate one.  You also do not need to do a Form 1 if you are buying an item.  Those are only required if you are making your own NFA item.

Both Form 1 (making an NFA item) and Form 4 (acquiring an NFA item already in existence) are now supported in the eForms system.  I highly recommend that you take advantage of this and not submit any paper applications unless absolutely necessary.

If you are buying an NFA item and doing an eForm 4, the FFL will guide you through the process.

Finally, if you made the mistake in the past of acquiring NFA items in your individual capacity, I have a detailed guide to the process for moving individually owned items into the NFA trust using eForms.

And as of January 2026, you may also do the individual-to-trust process via eForms.

What to do When You Receive an Approved Tax Stamp

While not legally required, I HIGHLY recommend that you email me a PDF copy of any approved tax stamp you receive to be added to your client file. 

This will allow me to provide a copy to you if yours is lost or destroyed or to your family if you pass and they cannot find one or more tax stamps.

Email the approved tax stamps to: [email protected].

After all of your items are approved, if you want to add one or more Joint Trustee to the trust (who can have unattended access to the items while you are alive) then email [email protected] with their FULL legal name and ask me to “Add them to Schedule B” and I will do that update as well.

Adding Non-NFA Assets to the Trust

Your NFA trust is perfectly capable of holding non-NFA items.  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).

With the upcoming Virginia Assault Weapons Ban, it is crucial to have all items that meet their definition of ‘assault firearm’ documented as having been owned prior to July 1, 2026 so that they fall under the grandfathering provisions of that bill.

I have a sample spreadsheet you can use to document 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.

IMPORTANT NOTE: If your trust was drafted prior to July of 2019 then your Schedule A  will not contain language allowing you to attach a detailed list of non-NFA items.  If you have the older version then I will be glad to provide an update to your Schedule A with the latest language free-of-charge.

Naming Specific Beneficiaries for Specific Items

While it is generally preferable to allow all assets to transfer to your beneficiaries as a class with the determination of equal distribution falling to the discretion of your Successor Trustee, some clients wish to exercise control over the distribution of specific items.

If you have one of my trusts drafted or updated after April 2nd, 2026, you will note that Schedule D of your trust incorporates an optional Letter of Instruction which you may download, fill out, sign and attach to your trust for this purpose.

If your trust does not contain this provision and you would like to add it free-of-charge, please reach out to my office and we will refresh your schedules.

While not legally required, I HIGHLY recommend that you email me a PDF copy of any such Letter of Instruction you execute to be added to your client file. 

This will allow me to provide a copy to your family if you pass and they cannot find it.

Email the executed Letter to: [email protected].

Posted in ATF, BATFE, FAQ, Form 1, Form 4, NFA Trusts | Comments Off on Using Your NFA Trust