NPRM 41P and Trusts

[NFATrustGuy]

Many of my clients and potential clients have asked me how Notice of Proposed Rulemaking 41P might affect using Trusts for the purchase of NFA-regulated items.

In a nutshell, 41P attempts to close the “NFA Trust loophole” by requiring background checks, photos, fingerprints, and LEO signoff for all parties “who possess, directly or indirectly, the power or authority under any trust document, contract, agreement, article, certificate, bylaw, or instrument, or under state law, to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the entity.”

In the case of the Trusts I create, the new requirements would apply to the Trustee and any co-Trustees named in the Trust or appointed by the primary Trustee. The new requirements would NOT apply to Backup (a/k/a Successor) Trustees or Beneficiaries until after you die or otherwise become incapacitated. The reason for this is that Backup (a/k/a Successor) Trustees and Beneficiaries have none of the rights listed above until after you die. They possess zero current day authority to do anything in the government’s list of powers or responsibilities.

Some of my clients or potential clients live in jurisdictions where the Sheriff refuses to sign off on an NFA application. Keep in mind that the Sheriff is not the only LEO authorized to sign the application. Your “local chief of police, sheriff of the county, head of the state police, state or local distract attorney or prosecutor” may also sign the application.

NPRM 41P also proposes to reduce the burden on the LEO providing his/her signature by removing the statement concerning his/her belief that the applicant won’t, at some point in the future, use the NFA item for other than lawful purposes. Apparently, some of the LEO reluctance to sign stems from a concern over potential liability because of this statement.

At this point (January 15, 2014), the NPRM comment period has closed and the bureaucrats are (supposedly) carefully considering the comments they’ve received in hopes of crafting a rule that will adequately address the comments and concerns voiced during the comment period. The final rule may be written exactly as proposed or it may be changed significantly.

Assuming the worst, the rule will cause inconvenience and expense for those living in NFA-friendly jurisdictions. For those living in UNfriendly jurisdictions, I anticipate a movement to identify someone other than an uncooperative Sheriff from the approved list of signatories and life goes on--albeit with new inconvenience and expense.

There is a good chance that any application pending before the proposed new rule becomes law will be “grandfathered” and will not require a background check, fingerprints, photo, LEO signoff, etc. I can’t guarantee this (nobody can), but based on prior actions, I think a grandfathering provision is highly likely.

In any case, owning an NFA-regulated item in a Trust (or other legal entity) is still the only way I’m aware of where you can legally share an NFA-regulated item. Yes, there will be more inconvenience and expense when the new rule is finalized, but it’s still better than having an individual license for your NFA item.

After saying all this, please understand that I am human and prove on a daily basis that I am capable of making mistakes. Many the folks on this board are very smart and very well-read when it comes to government actions and the rulemaking process. If anyone sees something I've overlooked or misinterpreted, PLEASE feel free to respond. I am fairly thick-skinned when it comes to intellectual criticism and am more concerned with "what's right" than "who's right."

Also… please understand that the statement above is meant to be factual (except where specifically noted), not my opinion on the government's continued incremental confiscation of our 2A rights. Believe me: I'm as upset about what's going on as anybody.

Rod