State by State NFA laws
another State by State NFA law database
Order ATF forms (from ATFs website)
Title II.com (auto fill in Forms) be sure to print front and back on the same sheet of paper
Revocable Living Trust transfers (from SIG Forum)
How to set up a Trust
Trust info from Small Arms Review:
Visit SAR on line at: www.smallarmsreview.com
Special Guest Writer Bob J. Howell
Use of the Revocable Trust to Purchase NFA Items
It is my distinct pleasure to introduce to you a special guest contributor this month. The following article was authored by Mr. Bob J. Howell. Mr. Howell is a practicing attorney in Florida experienced in Trust and Estates Law He brings his wealth of knowledge and experience in the area to this piece, which examines the use of the revocable trust as a means of purchasing NFA items. Please enjoy Mr. Howell's unique perspective as he explores an important area of Estates and Firearms Law.
"My CLEO (Chief Law Enforcement Officer) says he won't sign off on any Form 4s, now what do I do?" This is something that many in the NFA community have heard time and time again. Despite the best efforts of many to explain the true meaning of the signoff provision of the Form 4, there are still many CLEOs who do not understand the meaning of the signoff or do not want to understand for personal or political reasons. For many years, the standard reply to this question as been to advise the potential buyer to set up a corporation. While this method of purchasing NFA items has been in widespread use for many years, there is an alternative: the Revocable Trust.
A Revocable Trust is a legal entity established under state law, like a corporation, and as such, a Trust can hold title to real and personal property. Some are familiar with the use of a Revocable Trust for Estate Planning. However, many are unfamiliar with the use of a Revocable Trust to purchase and own NFA items. The NFA in 27 CFR §479.11 specifically defines a Person (i.e. someone who is authorized to purchase NFA items) to include Trusts as well as Corporations. Therefore, absent a state law in your particular jurisdiction prohibiting same, you may purchase and own NFA items through a Revocable Trust.
Aside from being merely an alternative method of purchasing an NFA item, the Revocable Trust provides many benefits over a Corporation or LLC. In states where a Trust is not required to be registered, a Trust will provide a more private method of ownership. In the author's home state of Florida, there is no requirement to register or record a Revocable Trust. Therefore, the existence and terms of the Trust are known only to those whom you choose to tell. This is generally not the case with a Corporation. In a casual conversation with someone at the range who is new to NFA and has questions about it, you might explain the legalities and process for purchase and ownership as well as how you purchased them through your corporation because the local CLEO refuses to sign. A quick search through the state's Division of Corporations website using your name or the name of the Corporation can yield a wealth of information. Through such sources, a stranger can find out information such as what corporations you are an officer of and the registered address of any such corporations. If you use your home address as the registered address of your corporation, the person performing the search now knows where you live and where you may store your NFA items.
Another area where a Trust may be more desirable is cost. With the cost of initial filing fees and annual corporate fees, your cost for the corporation may exceed the cost of setting up a trust either initially or over time. As an example, an individual in Florida wants to purchase a .22 suppressor from a dealer for $300. As his CLEO will not sign the Form 4, he sets up a Corporation to purchase the suppressor. Filing fees to set up the corporation (absent any cost of legal assistance or cost of a corporate book) were $70. The annual corporate filing fee is $150 and is paid every year the corporation is active. Five years later he still has the suppressor, but with annual fees he has paid $820 in initial filing and annual fees and will continue to pay $150 per year for as long as he wants to keep the suppressor. This is a lot of money for a $300 suppressor. Filing fees and annual fees for Corporations or LLCs may be different in your state, but the point is that once the Trust is established there are generally no further fees to maintain it.
In a typical Revocable Trust where you act as your own Trustee, there is no separate Federal tax return to be filed and any profit or loss incurred by the trust is passed through on your individual tax return. With a Corporation or LLC, you may be required to file state or federal tax returns, depending on your jurisdiction and the activities of the corporation. This too can be an added expense that using a Trust may avoid.
A Trust also has the benefit of being able to manage or distribute the Trust assets upon your death or incapacity. If you own NFA items in a Corporation and die, then your interest in that Corporation, and accordingly the assets held by the Corporation, will likely be subject to Probate. For those not familiar with Probate, it is the court authorized procedure where the assets of a deceased person are collected; their debts are paid, and the remaining assets are distributed to their beneficiaries pursuant to the terms of their will or in absence thereof, pursuant to the terms of state law. The duration and cost of this process may vary from state to state, but it is generally not cheap. By placing NFA items into a Trust, you can direct where those items are to go upon your death without fear of the high cost of probate. Revocable Trusts are a common tool used by estate planning attorneys across the country to help their clients avoid probate. The author has prepared many trusts for individuals, as part of their general estate plan, which they have used for the dual purpose of avoiding probate on their estate as a whole as well as to purchase NFA items.
Like a Corporation, there are no fingerprints or photos submitted with a transfer to a Revocable Trust. However, like a corporation, you must submit proof of the existence of the entity (be it a trust or corporation) with your Form 4. While many practitioners will advise the purchaser to simply submit a Certificate of Trust (typically a short one page notarized document confirming the existence of the trust and identifying the Trustee) as proof, the author recommends that you submit a full copy of the trust itself to avoid any questions from ATF as to the legitimacy and existence of the Trust. While some are uneasy about submitting a copy of their Trust with the Form 4, the author has had no issues with this practice. Additionally, as the Form 4 is essentially a tax document, the Form 4 and the documents accompanying it would be deemed private tax information between you and the ATE The last question the author is often presented with when discussing a Revocable Trust for NFA ownership is the subject of a professionally prepared Trust versus a self-prepared document. Depending upon the complexity of the Trust provisions regarding the management and distributions of the NFA items and whether the Trust is also being used for general estate planning purposes, in many areas the cost can run as little as a few hundred dollars. It has been the author's experience that many of the forms and computer programs available for drafting trusts and other legal documents provide just enough information to be dangerous. Like a wise man has said, you get what you pay for. While doing it yourself may save a few bucks, doing it wrong can cost you quite a bit more in legal fees or even your freedom. The author generally provides a prospective client with two pieces of free advice when asked about do-it-yourself documents. One is that you do not have to use the author, but do yourself a favor and use an attorney with experience in Trust preparation. The other is that if the cost of correctly preparing the documentation scares you, perhaps NFA is not the hobby for you.
Use of the Revocable Trust of NFA purchases is not new but rather is something that many were, until recently, unaware of. The Author has seen an increasing number of questions about its use on various websites along with an increasing number of well intentioned but misleading or incorrect answers. This article is intended to address many of those questions and provide an overview of the general traits and benefits of using a Revocable Trust for NFA ownership. Before proceeding however, you should always seek competent legal advice in your jurisdiction to determine if it is right for you.
Mark Barnes is an attorney with over 20 years experience. He began his career in public policy serving in both the legislative and executive branches of federal government. His firm, Mark Barnes and Associates, is located in Washington, D. C. and has been specializing in all aspects of federal firearms law since 1993. He can be contacted at MarkB17@aol. com. l. 10 No. 6• March 2007
The NFA Branch’s address in Martinsburg, W.Va. for all correspondence EXCEPT Form 4s:
National Firearms Act Branch
244 Needy Road
Martinsburg, West Virginia 25405
Form 4 applications must be sent to the BATF/Atlanta at the following address:
Bureau of Alcohol, Tobacco, Firearms and Explosives
National Firearms Act Branch
P.O. Box 530298
Atlanta, GA 30353-0298
The Atlanta facility forwards the Form 4s to W.Va. for processing after the $200 transfer fee is deposited.
All other correspondence and phone contact should be made directly with the W. Va. branch.
BATFE/W.Va. phone numbers:
(304) 616-4500
(304) 616-4501 (fax)
NFA Branch personnel assigned to Martinsburg info:
Branch Chief
Kenneth Houchens
Specialists
Denise Brown
Janice Fields
Amy Stely
Scott Robertson
Dejuana McConner
Section Chief (Examiner Supervisor)
Rob Howard
Dawn Henson
Examiners
Andrew Ashton
Ted Clutter
Nicole Dudash
Jason Frushour
Barbara Payne
Daniel Pinckney
William Shipman
Sandra Snook
Secretary
Sue Ann Schaus
Customer Service contractors:
Lora Evans
Tim McCauley
Anton Wood
