By now you have no doubt heard of the President’s latest efforts at gun control. There is a LOT of misinformation about it in the media (not surprising), so I thought I would provide a quick summary. For this post I am focusing on only the ATF’s final rule 41f (formerly known as rule 41p). In case you prefer the full text rather than a summary, you can read all 67 pages here.
ATF rule 41f will change the requirements for purchasing Title II NFA items (silencers, short-barreled rifles, short-barreled shotguns, and full auto). As noted above, 41f was previously known as 41p. Although I still do not support the rule, the final rule ended up being much better than the proposed rule was. Here is a quick list of the effects:
- Individual purchasers will no longer need their Chief Law Enforcement Officer (CLEO) to approve their application, but they will need to notify the CLEO that they are applying for a tax stamp for a NFA item before submitting their application and will need to include the notice in their application materials.
- In addition to the existing requirements, gun trust applicants will need to include the following with their application: (1) fingerprint cards, (2) passport quality photos, and (3) a “responsible person” form. These requirements apply to all current Trustees of the gun trust. In the case of gun trusts I draft, that will be the client and their Co-trustees. If someone else drafted your gun trust, you will need to check with the drafter for what is required or, if preferred, have me review and update the trust, as needed. The gun trust applicant will also need to notify the CLEO before submitting their application and include a copy of the notice with their application materials.
- Gun trust applicants may not need to do all of the above steps every time they apply. So long as the gun trust applicant had an application approved in the previous 24 months and there has been no change to the documentation (e.g., gun trust, responsible person forms, etc.) previously provided, the applicant needs to provide only the following, in addition to the Form 4 or Form 1: (1) certification that the information had no changed since the prior approval, and (2) identification of the application for which the documentation had been submitted by form number, serial number, and date approved. My recommendation would be to include a copy of the previously approved Form 4 or Form 1 (as the case may be) with the new application.
- The changes do not take effect until 180 days after the rule is published in the Federal Register. It was published on January 15, 2016, making the effective date July 13, 2016. The existing process remains in place until July 13, 2016, and all applications (Form 1 and Form 4) that are “in process” on or before July 13, 2016 will be process under the existing rules, not the new rules.
So, knowing that gun trusts are a significant part of my firearms law practice, what do I think of these changes? As you might expect, I think the changes for individuals are great because it is less burdensome, and the changes for trusts are completely unnecessary and overly burdensome. Is it the end of gun trusts? No way! First, from now until July 13, 2016 is a sweet opportunity to get a gun trust in place and purchase all the NFA items you want and can afford without having to deal with the overly burdensome requirements of the new regulation. Second, gun trusts (LLCs and Corporations too, if necessary) are still going to be the only way to allow multiple people to have access to an item. For instance, if I did not have a gun trust and instead I owned NFA items in my individual name, the mere fact that my wife has access to my gun safe without me present would be illegal. Although others can use a NFA item under the direct supervision of an individual owner, with individual ownership only the person to whom the item is registered via tax stamp is allowed to have access to it. With a gun trust, any Trustee can have access to and use the item without anyone else needing to be there and/or supervise. This has and should continue to be one of the main reasons to have a gun trust. The main effect I see the new regulations having on gun trusts is in the selection of Co-trustees. I think more often than not, the Co-trustees of a gun trust will need to be geographically close due to the logistical difficulties of long distance coordination of fingerprinting, etc., under the new regulation.
And with all regulations and laws, us firearms law and gun trust attorneys are already putting our heads together on ways to handle and work around the upcoming changes. Keep your eyes peeled for future updates, this is a rapidly changing area and I hope to keep you up-to-date through this e-newsletter.
If you or someone you know have any questions or would like to get a gun trust started (if you do not have one already), please contact me.
Michael Lichterman is an estate planning and gun trust attorney who helps families and firearm owners create a lasting legacy by planning for their Whole Family Wealth™. This goes beyond merely planning for finances – it’s about who your are and what’s important to you. He focuses on estate and asset protection planning for firearm owners (both NFA regulated and non-NFA regulated), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses and pet planning. He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.