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The Truth About NFA Trusts

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There is so much misinformation on the Internet about firearm suppressors. Luckily, you found this blog...


Let me help set you straight on at least one thing; NFA Trusts.


I get emails all the time from prospective customers worried about obtaining a suppressor via an "NFA Trust" because they view it as a loophole. Just the other day, I got another classic email asking about this very thing, and I decided to take the opportunity to set the guy straight. So, I wrote him an email explaining the process of how a Trust works for buying suppressors. I realized later that it was probably better suited as a blog post so, I decided to share it with my blog readers. What you'll read below is most of that exact email. Yes, it's a lot of words, but if you really want to know the dirt on this subject, read on and become enlightened:


This may require a paradigm shift in your thinking....


Consider the 2nd amendment of our Constitution. With it intact, the Federal government CANNOT legally ban firearms and suppressors (they define suppressors as "firearms" as well). That's not to say that the Federal government doesn't infringe on the right of the people to keep and bear arms... they do that everyday. But, at the federal level, silencers are completely legal. Individual states, on the other hand, can pretty much do what they want, and some do, in fact, ban private ownership of silencers. Luckily for us, North Carolina is not one of them. In NC, if you can legally buy a handgun, you can legally buy a silencer... provided that you are a citizen of the USA.


So, when congress enacted the NFA (National Firearms Act) in 1934, they simply could not constitutionally ban silencers outright. So, they restricted them heavily and made them more difficult to obtain... but they didn't ban them. In the process of this, the Trust provision was born. Here is the NFA branch of the ATF's own words about. Notice the words in blue: 


9.4.2.2  Transfers of NFA firearms to persons other than an individual or an FFL and
special (occupational) taxpayer.  Section 479.85 of the Code of Federal Regulations requires
the ATF Form 4 or Form 5 application to properly identify the transferee.  Although transfers to
natural persons (individuals) must include a recent photograph, duplicate fingerprint cards, and a
certification from law enforcement, the NFA also defines a person to include a partnership,
company, association, trust, estate, or corporation.  The requirements for fingerprints,
photographs, and the law enforcement certificate specified in § 479.85 are not applicable for
transferee who is not an individual.


When an ATF Form 4 or Form 5 application is submitted to transfer a firearm to a partnership,
company, association, trust, estate, or corporation (collectively, an entity), the transferee entity
must be identified on the Form 4 using the complete, formal name of the entity, along with the
entity’s street address, city, and state.  The Form 4 or Form 5 must not include an individual’s
proper name, unless the proper name is a part of the entity’s name (e.g., The Irrevocable Trust of
John Doe, John Smith, Inc., etc.).  ATF requires that the Form 4 or Form 5 include
documentation evidencing the existence of the entity.  This documentation would include,
without limitation, partnership agreements, articles of incorporation, corporate registration, a
complete copy of the declaration of trust, schedules or attachments referenced in the trust, etc. If
the firearm being transferred is a machinegun, short barreled rifle, short barreled shotgun, or
destructive device and the transfer is from an FFL, a person authorized to act on behalf of the
entity must complete item 15 of the Form 4 and Form 5.
   
The Federal requirement is that the Transferee is over 21 years of age, a citizen of the USA, and NOT a felon... and reside in a state that allows private ownership of suppressors. It's really as simple as that, although there are even exceptions to those criteria as well... like, you actually do not have to be a US citizen to be able to legally possess a suppressor. But that's another story for another day.

It might help to try to look at the whole thing through the eyes of the Form 4 examiner. He or she looks at your Form 4 and makes sure that their requirements have been satisfied before approving it. Beyond the applicant's state law(s), they are looking for the requirements you just read about in the previous three paragraphs. Then they simply look at the applicant's state law concerning suppressor ownership, because it's totally kosher at the federal level. It makes no difference if the transferee is a Trust. They will approve the Form 4 if you give them the info they require. They are obligated to approve it because of their own rules. You have the 2nd amendment on your side and they know it.


A Form 4 examiner told me just last week that he knows that a lot of people go the Trust route in NC even if they KNOW their sheriff will sign because it's simply less hassle. No fingerprints, no photographs, no making a trip down to the sheriffs office. What a lot of people don't know is that the ATF does NOT conduct a NICS (National Instant Criminal Background Check System) check on the Trustee of the Trust, even though they can correctly presume that the Trustee will be the actual living person possessing the silencer. You may wonder, why doesn't the ATF run the criminal background check on the Trustee? Why, indeed...


Well, per ATF rules, the Transferee is the TRUST, i.e. the legal entity, not the individual behind the Trust. So, technically, the Trust entity is actually the applicant on Form 4. And how do you conduct a background check on a legal entity like a Trust? The answer is, you don't. And that is why the ATF wishes that more sheriffs would sign off for INDIVIDUALS who apply on Form 4 so they can run the check on the actual person listed in section 2a on Form 4. Additionally, the instructions for NICS checks as recorded on Form 4473 for transfers of NFA items falls under the "Exceptions to NICS Check". It reads: "A NICS check is not required for... transfers of National Firearm Act weapons approved by ATF". This means, when you come to pick up your suppressor at your dealer's store, you probably won't get the background check from him at that point either. He is not required to run NICS, according to the law. So, when you apply for possession of a silencer on a Form 4 using your Trust as the Transferee, and you can end up acquiring the silencer without ever getting the background check at all. All perfectly legal according to the letter of the law.


Don't expect your local LEO to know much about this. Many sheriffs (at least, in NC) refuse to sign off on Form 4. Perhaps this is because they either "don't want any silencers in my county" or think that somehow they may be liable for any future actions of the individual they're signing for. I cannot presume to know the sheriff's personal reasoning behind their refusal to sign, but if those examples were the case, it is patently false on both accounts; first, when sheriffs don't sign, it just naturally forces the individual to create a Trust with which to apply on Form 4... so the guy's going to obtain his suppressor anyway despite the lack of CLEO signature (and lack of background check)... and second, the sheriff is not liable at all for any future actions of the applicant. They are simply NOT liable in any way, shape, form or fashion. Period. Just call the NFA branch of the ATF and ask them about that. Or better yet, get your sheriff to ask.




Another reason Trusts are so popular as opposed to say, corporations or LLCs, etc. is that there is no annual tax obligation with a Trust. It's cheap to set up and it's a one-time thing. No taxes to pay each year like other corporate entities.


I think that people get intimidated with the prospect of dealing with the federal government. In my experience though, the more I learn about the NFA world, the more I realize that knowledge is power. It's good to equip yourself with as much intel as you can regarding this subject. That's why I'm here... to help you learn. And to sell you silencers too, of course. I'm willing to bet a steak dinner that after reading this, you probably know much more about this process than the average sheriff or sheriff's deputy in NC.


One other thing about Trust.... very important. When you read stuff on the Internet like horror stories about "invalid" Trusts or running afoul of the law by not preparing your Trust properly, ask yourself: who is the source of that information? I'd bet dessert for that steak dinner that most of that talk originates from attorneys. More specifically, lawyers who want to draft $600 NFA Trusts for you. So, let's talk about that...


Have you actually researched the NFA Trust subject yourself, by talking to the SOURCE of the rules and regulations surrounding suppressor ownership, i.e. the NFA branch of the ATF? Be honest. I'm inclined to believe that most people will instinctively accept as truth whatever comes out of the mouths of lawyers... especially when the lawyer is representing YOU. So, based on what you read online about Trusts, it's reasonable to think that a lot of people believe that they must pay an attorney to draft their NFA trust, because if they create their own Trust, they could risking jail time or something. Nothing could be further from the truth. I'll explain...


The ATF is simply looking for a legal entity for which to transfer the suppressor. A Trust is a Trust, simple as that. Your Trust doesn't even need to indicate the suppressor as Property in Schedule A of the Trust. In fact, the suppressor shouldn't be listed in Schedule A until after the Trust has been approved and the Tax Stamp paid. Your Trust does need to indicate the proper individuals who will fill the proper roles when the Trustee/Grantor dies, etc. (mostly for tax reasons) but there isn't some kind of mystical quality to an NFA Trust. I'll say it again, a Trust is a Trust. Not to slight the authority and education of attorneys, but let's get serious here... what is an attorney going to do with a Trust for $600 that you, yourself can't do for $50 or less? We live in the information age... if you look hard enough, you'll find the tools you need to draft your own Trust. That's all I'll say about that because I'm not an attorney, and I certainly don't one accusing me of UPL (unauthorized practice of law).


If you have been researching this topic of NFA Trusts, it's very likely that you've come across a number of articles from the "gun trust lawyer" website or blog. Here are a couple important facts you need to know as you read what they have to say about creating your own Trust.


On those sites, you will probably see something that goes like this: "If you create your own Trust without employing an attorney to draft it, you're setting yourself up for financial and legal risk. When you create your own Trust, it could be improperly drafted, and even if the ATF approves it, they could deem it invalid after they've approved it. If that happens, you would technically be in violation of state and/or federal law by being in possession of an illegal NFA item and your silencer subject to forfeiture and possible fines and jail time". Wow, how's that for a scare tactic? Let's look at this a little closer...


Ask yourself, why would the ATF, after approving your Form 4 on a Trust, decide at some point in the future to reopen your file and determine that your Trust is invalid? Seriously... why would they have any reason to do that? Like I said earlier in this article, they've already looked at every level of regulation governing your (or your Trust's) legal ability to possess the NFA item. Once the ATF has determined that your Trust meets their protocol, and that private suppressor ownership is legal in your state, they will approve your From 4, affix the tax stamp, and that is the final word.


Let me repeat that: Your approved Form 4 on YOUR Trust and paid tax stamp is the final word from the ATF. You now legally possess the NFA item despite what your local law enforcement says or thinks.


That statement comes straight from the chief NFA examiner, with whom I have personally spoken to on several occasions. So, it seems that the official position of the ATF is that once that stamp of approval (pun intended) has been given, you now legally own the suppressor. I don't want to presume upon ALL the intricacies of the law, but if the governing body on suppressor ownership (NFA branch of ATF) specifically says that you are approved to take possession of your suppressor... how could you be in illegal possession of the suppressor? I think that's a fair question.


So, back to the idea of your "homemade" Trust being deemed invalid. Notice that the lawyers like to use terms like "...When you create your own Trust, it could be improperly drafted..." and "... they could deem it invalid after they've approved it." Notice the word "could". That is classic lawyer speak. Sure, the ATF could... but do they really? Or better yet, HAVE they EVER deemed a Trust invalid after the fact? Remember, this information is coming from someone who wants to charge you $600 to draft your Trust.


So, are you ready for the facts? I called the NFA branch of the ATF and asked them straight up... have you ever deemed a Trust invalid after the fact? The answer: Never, except for one Trust which was set up in a foreign country and should have never been approved in the first place. So, for all of you reading this who meet the criteria to own NFA items in the first place, i.e. a citizen of the USA, etc. the official answer from the ATF is NEVER. They have never deemed a Trust invalid after they've approved it. 


That's not to say that for some reason the ATF might not approve your Form 4 on a Trust for some other reason, but it is almost an impossibility that they will decide that your Trust is invalid after they've already approved it. Sure, those lawyers probably don't like it that I'm telling you the truth, and essentially calling them liars, but frankly, I don't care what they think.


One other rumor that I'd like to clear up. Some people think that if they "go behind the backs" of their sheriff and get a silencer via a Trust, the sheriff might get mad if he finds out you have it and he might come confiscate your silencer. Well, he might get mad, but who cares about that? He's just an elected guy. Vote him out of office next election. But he can't come and take your silencer away. Not unless you're a felon. So, play by the rules, stay clean, and you're golden.








So, I hope that answers some of the common questions that people have about NFA Trusts. Now back to what I said at the top about a paradigm shift in your thinking regarding firearms and suppressors...


It is simply this: Any "loophole" in firearm/suppressor ownership is actually the norm in our country based on our founder's view of firearm ownership and the provisions they gave us in the 2nd amendment. You really ought to look at it this way. We live in a constitutional Republic... a country of laws. The first two amendments of our Constitution were written down not because those rights didn't already naturally exist; they absolutely did, it's because our founders wanted to "chisel them in stone" so-to-speak... to make a permanent record of the mind-set of the country at the time of its founding. They knew that without these two precious freedoms; which are essentially, the right to speak out against the government if it exceeds it's limitations, and the right to resist the government with arms if it tries to replace personal liberty with statism, we would quickly become no different than the dictatorial countries we had just escaped from, with little to no freedom preserved for the individual.


But, because of so many rules imposed on us over the years in an attempt to circumvent the 2nd amendment, many of us now forget why it exists in the first place. Whether they're truly aware of it or not, many people are actually now sympathetic to a government who would like to see the people censored and disarmed. Because so many anti-liberty influences are being spread around today, we have actually come to frown on any backdoor ways to obtain firearms. We forget that what we view as a "loophole" today only came about after a steady eroding of our God-given rights and provisions of the 2nd amendment. We forget that any infringement of our gun rights is actually the antithesis of normal in the US. Sadly, restriction and regulation have become the new normal.


Call me crazy, but I think the Constitution is still relevant. And I'm a student of history too, so it's easy for me to see the inevitable path of our country if we continue to disregard personal freedom and liberty; specifically the right of the people to keep and bear arms. It's happened to many other countries.... it is irresponsible to think that we're immune to it. But, I digress.

Buy silencers, aka suppressors while you still can! 

~ Eric Morton, Owner
NC SILENCER
This little nugget of info has been brought to you by NC SILENCER, Quietly Arming Average Americans since 2010. Any comments or questions about this article are welcomed. 
The information contained in this article is intended for general information purposes only and in no case should be relied upon for decisions with legal consequences. Any legal decision should be made only after consultation with competent legal counsel in which the specific facts of your particular situation are fully discussed and disclosed.

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