Proposed Trust Regulation - ATF 41P - Has Passed in Modified Form
The Original Proposal Is As Follows
ATF 41P has gone from a proposal to a final rule. The final rule is known as ATF 41F, and more can be read about the rule and how it affects gun trusts here. The final decision on ATF 41P was been pushed back from mid-2013, to January 2015, to May 2015, to January 4, 2016. ATF 41P will not go into effect until 180 days after it is published in the Federal Register (which will not be until at least June, 2016). The reason for the delay of a decision on 41P was that the Office of Enforcement Programs and Services (EPS) of the ATF resources are being diverted away from 41P to help process the over 310,000 public comments received in response to the armor piercing ammunition framework proposal. See the full article here. In addition, at an April, 2015 NRA Firearms Law Seminar in Nashville, an ATF attorney gave additional reasons here.
The ATF was prompted to reconsider it's rules which allow NFA trusts to avoid submitting a photograph, fingerprints, or obtain CLEO certification by the National Firearms Act Trade & Collectors Association (NFATCA). The NFATCA argued that gun trusts allowed people who otherwise would not be able to obtain a NFA firearm to skirt the law and use a NFA trust to obtain NFA weapons. The ATF agreed and proposed rule changes that would effectively make trusts, and all those 'responsible persons' in the trust (the grantor, trustees, and beneficiaries) have to register with the ATF in the same way that individuals have to register.
Under the proposed rule, a legal entity such as a trust would be required to complete the following steps in addition to completing the applicable Form 1, 4, or 5 before it is permitted to make or receive an NFA firearm:
- Complete and submit a Form 5320.23 for each 'responsible person' (this form is also proposed to be changed by the possible new rule)
- submit fingerprints, photographs, and CLEO certificate for each responsible person, and
- submit a copy of the documentation that establishes the legal existence of the legal entity
The proposed rule would have effectively create the same requirements to make or transfer a NFA item (Form 1 or Form 4) as currently exists to acquire a Federal Firearms License (the requirements in Form 7). Form 5320.23 would have expanded the definition of 'responsible person' to include trusts and all those involved such as grantors, trustees, or beneficiaries of a trust.
Thankfully, the goals of ATF 41P have been scaled back quite a bit. The final rule was tempered with the need of an effective estate planning tool such as a gun trust. Post ATF 41F, a gun trust will have additional processing requirements, but gun trusts will still maintain their advantage of allowing multiple people the use of NFA firearms, will still allow privacy protection (although to a lesser extent in some areas), and will still create a great way to pass along your NFA firearms to your loved ones after your death.
If you have been thinking about forming an NFA trust, then you can still do so before ATF 41F goes into effect in June 2016 by following the same requirements as always. Post-June 2016, there will be some additional requirements in order to process your ATF application with a gun trust, but we will guide you through it here at Secure Gun Trust to enable you a smooth and effective transition through the new regulations.