How to Create, Maintain and Run a NFA Gun Trust

Creating and executing a NFA Gun Trust with our NFA Gun Trust services is quite simple.  We have been providing NFA Gun Trust services for many years.  But we always seem to get asked.  How do I create, maintain and run a NFA Gun Trust?     

To start off lets describe what exactly a trust is.  A trust is a fiduciary arrangement that permits a trustee to hold property on behalf of a named beneficiary or beneficiaries.  Trusts are created to provide legal protection to the settlor's property within the trust and to ensure that the property within the trust is distributed to the beneficiary or beneficiaries to the trust.  In the case of our NFA Gun Trusts, the property within the trust would be NFA Firearms [Title 2 firearms] or non-NFA Firearms [Title 1 firearms].  Our NFA Gun Trusts are revocable trusts that can be changed or terminated by the settlor during his or her lifetime.  Some NFA Gun Trusts might be irrevocable trusts, in which the trust cannot be changed after the settlor establishes the trust, or becomes irrevocable upon the death of the settlor.  We describe both below: 

Revocable NFA Gun Trust:  A NFA Gun Trust that is revocable is no different than any other revocable trust, except it contains language specific to and related to the National Firearms Act.  A revocable trust is the most common and generally the preferred route for NFA Gun Trusts.  A revocable trust can be changed at any time and can be amended if you have second thoughts about your trust or would like to add or remove co-trustees later, etc.  

Irrevocable NFA Gun Trust: A NFA Gun Trust that is irrevocable is no different than any other irrevocable trust, except it contains language specific to and related to the National Firearms Act.  A irrevocable NFA Gun Trust is not common and generally not the preferred route for a NFA Gun Trust.  A irrevocable trust cannot be changed after the trust has been signed and executed.  A NFA Gun Trust's contents may change over the lifetime of the settlor, which makes a irrevocable NFA Gun Trust not the preferred route.  Note:  After the settlor passes away or after a specific amount of time a revocable NFA Gun Trust may become irrevocable.

If you have any questions about which NFA Gun Trust is appropriate for you, you can reach out to us or you can reach out the other many NFA Gun Trust sources that are out there, or consult a local NFA Gun Trust Lawyer.  

Before we get into the how to's on getting your NFA Gun Trust setup, let's discuss the benefits and disadvantages to creating a NFA Gun Trust.  Below is an excerpt from our full article, "Why choose a NFA Gun Trust instead of filing individually for your ATF Form 1, ATF Form 4, or ATF Form 5?".  This article describes in more detail the options that you have for filing for your ATF paperwork as an individual versus a NFA Gun Trust. 

Filing with an NFA Gun Trust:  If you are going to apply for a ATF 5320.1 Form 1, ATF 5320.4 Form 4, or a ATF 5320.5 Form 5, with a NFA Gun Trust you will be required to fill out a ATF 5320.23 Responsible Person's Questionnaire for each responsible person named in the NFA Gun Trust.  This means that every responsible person named in the NFA Gun Trust will be required to submit the two fingerprint cards, a ATF 5320.23 Responsible Person's Questionnaire, and a passport photo.  In our NFA Gun Trust a responsible person is the settlor and any co-trustee(s).  Note: This maybe different in other NFA Gun Trusts.  

Benefits of filing with a NFA Gun Trust:

• Multiple Co-Trustees:  You can name multiple responsible persons, a.k.a co-trustees in our NFA Gun Trusts.  This allows them to use, transport and have access to the NFA items that are owned by the NFA Gun Trust. 
• Amendments:  The NFA Gun Trust can be amended.  Meaning you can add or remove co-trustees to the trust, change the successor trustee, add or remove beneficiaries, etc.  This adds flexibility to the NFA Gun Trust and is a major advantage of having a NFA Gun Trust.  We include these NFA Gun Trust amendments with every purchase.  Amendments only have to notarized.  Once notarized they are considered to a part of the original trust and must be sent to the ATF with your next NFA purchase.  Amendments allow you to dd or remove co-trustees to the trust without having to pay for a new $200 tax stamp.  
• CLEO: No CLEO signature is required. 
• Heritage:  NFA items that the trust owns can be passed down, and require the ATF Form 5 to do so, below describes this process if the NFA items that are being transferred to the beneficiary or beneficiaries that were named in the trust.   

j. Estates, Trusts, and Other Transfers by Operation of Law. When a firearm is being transferred from an estate by bequest or intestate succession (see 27 CFR § 479.90a), or by other operation of law to a beneficiary or other authorized recipient, ATF Form 5 is used to effect the transfer. The executor, trustee, or other person appointed to dispose of property shall provide documentation of the legal status of the person entitled to receive property, and shall identify that person in item 2a. In the case of an estate, item 3e shall be completed to reflect the decedent's information. If the transfer is to someone other than to a person identified under operation of law, the transfer is subject to transfer tax and ATF Form 4 shall be used. 

Excerpt taken from the ATF 5320.5 Form 5

For registered NFA firearms in the estate, the executor should take action as soon as possible to arrange for the proper registration of the firearms. Possession of an NFA firearm not registered to the possessor is a violation of Federal law and the firearm is subject to seizure and forfeiture. However, we do allow the executor a reasonable time to arrange for the transfer of the registered firearms in a decedent’s estate. This generally should be done before probate is closed.It is the responsibility of the executor of the estate to maintain custody and control of the firearms and to transfer the firearms registered to the decedent. The firearms may not be transferred to another party, such as a firearms licensee, for consignment or safekeeping. This would be a transfer subject to the requirements of the NFA. The licensee may assist the executor by identifying purchasers and acting as a broker.The firearms may be transferred on a tax-exempt basis to a lawful heir. The executor would apply on ATF Form 5, Application for Tax Exempt Transfer and Registration of a Firearm, for a tax-exempt transfer to a lawful heir. A lawful heir is anyone named in the decedent’s will or, in the absence of a will, anyone entitled to inherit under the laws of the State in which the decedent last resided. NFA firearms may be transferred directly interstate to a beneficiary of the estate. When a firearm is being transferred to an individual heir, his or her fingerprints on FBI FormsFD-258 must accompany the transfer application. However, if any Federal, State or local law prohibits the heir from receiving or possessing the firearm, ATF will not approve the application.

ATF Form 4 is used to apply for the tax paid transfer of a serviceable NFA firearm to a person outside the estate (not a beneficiary). ATF Form 5 is also used to apply for the tax-exempt transfer of an unserviceable NFA firearm to a person outside the estate. As noted above, all requirements, such as fingerprint cards for transfers to individuals and compliance with State or local law, must be met before an application may be approved. If an NFA firearm in the estate was imported for use as a “sales sample,” this restriction on the firearm’s possession remains.The NFA firearm may only be transferred to a Federal firearms licensee who has paid the special (occupational) tax to deal in NFA firearms or to a government agency.  

Excerpt taken from the Transfers of National Firearms Act Firearms in Decedents’ Estates.

We recommend pre-filling out a ATF 5320.5 Form 5 for every NFA item that the NFA Gun Trust has purchased.  This helps making the ATF 5320.5 Form 5 application for the estate easier. 

Disadvantages of filing with a NFA Gun Trust:

• Cost:  There is a cost to form and establish a NFA Gun Trust, our NFA Gun Trusts can be purchased for $59.95 and are able to used in all 50 states.  Other NFA Gun Trust lawyers can charge $500 or more for their NFA Gun Trusts.
• Time: Our NFA Gun Trusts are delivered to you in 5 minutes or less.  Other NFA Gun Trust lawyers and other NFA Gun Trust services can take many weeks to be received.  We take the hassle out of that process and deliver your personally reviewed trust in a timely manner.  
• More ATF Paperwork:  ATF 5320.23 Responsible Person's Questionnaire paperwork is required for every responsible person in the gun trust.  A responsible person in our NFA Gun Trusts are considered to be the settlor and any co-trustee(s).  This might be different in your NFA Gun Trust. 
• Trust Paperwork:  Trust paperwork may require pages within the trust to be, notarized, dated and witnessed. 
• Copy of Trust Must Be With You:  A photocopy of the notarized trust must accompany a copy of your tax stamp when you are transporting and shooting the NFA item(s).  We offer trust and tax stamp lamination services to help protect your paperwork when you are traveling with it.

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 There are many ways to create a NFA Gun Trust.  Below are a few ways that NFA Gun Trusts can be made:

NFA Gun Trust Websites:  We provide NFA Gun Trusts to our customers for $59.95 and have never been denied by the ATF.  We make the process simple and easy to get your NFA Gun Trust.  Our NFA Gun Trusts are provided to our customers in less than 5 minutes from receiving their information. 

NFA Gun Trust Lawyer: If you prefer you can reach out to a NFA Gun Trust lawyer to draft a trust for you.  

Do-It Yourself Templates: Do-It Yourself Templates exist on the internet for NFA Gun Trusts, however we don't recommend this, as you might not be fully protected and potentially might not be in compliance with the ATF.  

In order to create your NFA Gun Trust you will need to know what the following NFA Gun Trust terminology is and who you want in each position in the NFA Gun Trust.  Each position in the NFA Gun Trust has a specific role and you should understand what each role is.  We have them listed below: 

Settlor

The settlor is the person creating the NFA Gun Trust.  The settlor of the NFA Gun Trust is also considered to be a trustee.  The settlor is a responsible person in the trust and must supply a passport photo, FD-258 fingerprint cards with the ATF 5320.23 Responsible Persons Questionnaire when they are purchasing a NFA firearm.

Trustee/Co-Trustee 

A trustee (see settlor) and co-trustee(s) in a NFA Gun Trust are the responsible persons in a NFA Gun Trust.  This means that they are allowed to use the and posses the NFA firearms that reside within the NFA Gun Trust.  They are also subject to supplying passport photos, FD-258 fingerprint cards with the ATF 5320.23 Responsible Persons Questionnaire when they are purchasing a NFA firearm.

Successor Trustee

The successor trustee is in charge of the NFA Gun Trust upon the death of the settlor and the co-trustees.  In a NFA Gun Trust you must appoint a successor trustee.  The successor trustee can play multiple roles, meaning the successor trustee can also be a beneficiary/and or a co-trustee in the NFA Gun Trust.  The successor trustee is not a responsible persons in the NFA Gun Trust, unless he is named as a co-trustee.  If he isn't a responsible person and not named as a co-trustee, the successor trustee is not allowed use the NFA firearms.  They are also not required to submit a passport photo, FD-258 fingerprint cards and the ATF 5320.23 Responsible Persons Questionnaire for the NFA Gun Trust.  They are in charge of distribution of the trust contents to the beneficiaries when the trust can no longer be managed by the settlor and/or co-trustees.  

Beneficiary - Beneficiaries

The beneficiary or beneficiaries of the NFA Gun Trust are the persons who will own the NFA items upon death of the settlor.  The beneficiaries must meet all of the current requirements of a responsible person in order for the beneficiary to legally own the NFA firearms. You can designate how many items in the NFA Gun Trust go to each beneficiary or you can designate a percentage of the NFA Gun Trust contents to each beneficiary.  The beneficiaries are not active members of the NFA Gun Trust and not considered to be responsible persons.  Thus, they are also not required to submit passport photos, FD-258 fingerprint cards and the ATF 5320.23 Responsible Persons Questionnaire for the NFA Gun Trust. 

Beneficiaries can transfer the NFA firearms to themselves or a NFA Gun Trust that they have created through the ATF Form 5 - Application for Tax Exempt Transfer and Registration of Firearm (ATF Form 5320.5) Walk-Through Guide, upon the passing of the settlor of your NFA Gun Trust.  In Box 1 of the ATF 5320.5 Form 5, the benefiary can select the box, "Firearm is being transferred to a lawful heir or by operation of law" to transfer the NFA Firearm(s) that the NFA Gun Trust owns to themselves for free.  You will also need to fill out Box 3a, "If Applicable: Decedent's Name, Address, and Date of Death", as well if you are applying for a tax free tax stamp for an heir.  A heir/beneficiary will need to fill out a ATF 5320.5 Form 5 for every NFA Firearm that they want to register and transfer. 

Once you have that information above you are able to supply us, your trusted NFA Gun Trust provider with that information to create your trust.  If you are creating your NFA Gun Trust through a NFA Gun Trust lawyer then you will need to supply them with that information as well. Do-It Yourself NFA Gun Trust Templates will require this information too.

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Maintaining and "Running" your NFA Gun Trust

There are a few ways that you will need to do to "maintain and run" your NFA Gun Trust once it has been executed.  Maintaining your Schedule A (if applicable) and updating your trust with NFA Gun Trust amendments, if you need to make any changes to your NFA Gun Trust.

"Schedule A"

The schedule to any trust is simple a legal document that lists information about your trust.  In the case of a revocable NFA Gun Trust the "Schedule A" or other Schedule's are used to list the Title I and Title II firearms [NFA Firearms] that reside within the trust. The Schedule A is an informational list of the contents of the trust, it is mainly use to help the successor trustee that you named understand what the NFA Gun Trust owns.  Upon your death or inability to manage the NFA Gun Trust the successor trustee will use the "Schedule A" document to understand what needs to be distributed to the beneficiary or beneficiaries to the NFA Gun Trust.  You will only be able to add items to the "Schedule A" when the NFA Gun Trust legally owns them.  This means when you apply for your first NFA Firearm you will not list the NFA Firearm in your "Schedule A", as the trust doesn't own the NFA Firearm yet.  You will list the NFA Firearm in your "Schedule A" only when you receive the tax stamp back and have completed a ATF 5300.9 - 4473 form (if applicable).  You will only need to complete a ATF 5300.9 - 4473 form when you are purchasing a NFA Firearm from a SOT dealer.  Person to person NFA transfers to not require this paperwork and can be placed in your Schedule A, when you receive your tax stamp back from the ATF and take possession of the NFA Firearm.  If you don't want to use a Schedule A, you can also opt to use a assignments page for your NFA Gun Trust that lists the assets that the NFA Gun Trust owns.

Amendments to your NFA Gun Trust

NFA Gun Trust amendments are used to change or modify an already executed NFA Gun Trust.  All of the NFA Gun Trusts that we sell include NFA Gun Trust amendments.  Other services might not.  You will need to ask them at the time of purchase.  You can also speak with a NFA Gun Trust Lawyer to draft an amendment to your trust.  Lastly, you can create an amendment to your NFA Gun Trust yourself, however this option is not recommended as you are more prone to making a mistake.  All three options are viable options.  To execute one of our NFA Gun Trust amendments you will need to get it witnessed, dated, signed and notarized.  Other NFA Gun Trust amendments might require more or less than previously mentioned. Once your NFA Gun Trust amendment is executed, it is considered to be a part of the whole trust.  This means that when you apply for your next NFA Tax Stamp, you will be required to send the ATF a notarized copy of your existing NFA Gun Trust and a notarized copy of any NFA Gun Trust amendments that you have executed.  It is highly recommend to keep your original NFA Gun Trust and the originals of any NFA Gun Trust amendments in one place.  To help and aid you with this we offer NFA Gun Trust Binder services to help you keep your ATF Tax Stamps, NFA Gun Trust, NFA Gun Trust amendments, Certifications of Trust and other important documents together in one place.  You should never send your original NFA Gun Trust or any original NFA Gun Trust amendments in with your ATF application(s).  The ATF will not send them back to you.  The most common NFA Gun Trust amendments that are used are to Add or Remove a co-trustee(s) from the NFA Gun Trust.  Those are the most common, but below is a list of the typical NFA Gun Trust amendments that you may need and encounter:

• Adding or Removing Co-Trustee(s)
• Changing the Successor Trustee
• Changing a Beneficiary or Beneficiaries
• Changing the Address of the NFA Gun Trust

These are the most common NFA Gun Trust amendments that you will encounter however, every situation has the potential to be different and you may need to execute a NFA Gun Trust amendment that isn't listed above. 

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Information located within this article is current as of August, 2018. Information located within this article is an original guide created by National Gun Trusts and not to be cited or used without the written permission of National Gun Trusts.