On January 4, 2016, a new regulation—commonly referred to as ATF-41P—proposed by the Bureau of Alcohol, Firearms, Tobacco & Explosives (The “ATF”) was signed as a final rule by Attorney General Loretta Lynch. The final rule, which goes into effect 180 days after it is published in the Federal Register (27 C.F.R. § 479), changes three key aspects of the regulations governing applications to make or transfer an NFA firearm, especially for Gun Trusts.
Background Checks for Trustees
Perhaps the biggest change made by ATF-41P requires “responsible persons” of a trust, partnership, association, company, or corporation to complete the same forms, and to submit photographs and fingerprints to the ATF whenever such a legal entity is applying to make or transfer an NFA firearm. (27 C.F.R. § 479.11). This means that for Gun Trusts, each and every trustee of the Gun Trust will have to submit to a background check anytime the Gun Trust is applying to add a new NFA firearm to the trust.
While this requirement eliminates one of the greatest advantages of using a Gun Trust to acquire NFA firearms, Gun Trusts still allow more than one person to serve as a “responsible person” for any one NFA firearm. In contrast, a person making or purchasing an NFA firearm in his or her individual name will be the only person authorized to possess or use that firearm. Thus, while ATF-41P makes it much more inconvenient for the trustees of a Gun Trust to acquire new NFA firearms to add to their trust, it is still possible for the Gun Trust to have multiple authorized users as long as each of those users has passed a background check.
CLEO Signatures No Longer Required
One benefit of ATF-41P for gun owners is that it eliminated the requirement for applicants to obtain a certified signature from their county’s Chief Law Enforcement Officer (CLEO) as part of an application to make or transfer an NFA firearm. Applicants for NFA firearms must still send a copy of their applications to the local CLEO as part of the application process, but the CLEO’s signature is not necessary in order for the application to move forward with the ATF. Several comments submitted during the rulemaking process of ATF-41P noted that the CLEO signature requirement was somewhat redundant with the requirement to submit to a criminal background check. Commenters also noted that many CLEOs in the past have refused to sign applications for NFA firearms, and thus requiring a CLEO signature often gave too much unfettered discretion to CLEOs who were generally opposed to anyone owning an NFA firearm. By eliminating the requirement for a certified CLEO signature, the ATF has addressed these criticisms and somewhat streamlined the already complicated process for acquiring NFA firearms.
Executors of Estates may Possess NFA Firearms
The ATF also “clarified” that an executor, administrator, or personal representative of an estate may possess any NFA firearms registered in the individual name of the deceased gun owner during the term of the probate process without having to treat the gun owner’s death as a “transfer.” (27 C.F.R. § 479.90a). Instead, when the executor is ready to transfer an NFA firearm to a certain beneficiary or heir, he can submit the application to the ATF, along with an ATF Form 5 (5320.5) Application for Tax Exempt Transfer and Registration of Firearm. This means that the estate of an NFA gun-owner will not have to pay the $200 transfer tax per NFA item that was registered in the gun owner’s individual name. For Gun Trust owners, this clarification has little impact, since many Gun Trusts (done correctly) may be designed to continue after the death of the person who originally created the Gun Trust.
The final ruling of ATF-41P can be found here: https://www.atf.gov/file/100896/download
For a helpful guide to the benefits of a Gun Trust, see our FAQ blog post: http://www.wolfejones.com/what-is-a-gun-trust/