Displaying items by tag: nfa trust

Arsenal Attorney’s clients could soon expect to receive faster approval of NFA applications. According to BATFE, sometime after December 15 but before Christmas, the eForm system will expand to accept ATF Forms 1, 2, 3, 4, 5, 6, and 9. In this blog we have presented background to these developments as well as next steps our clients could take to benefit from these developments.

For background, firearms regulated under the National Firearms Act (NFA), include silencers/suppressors, short barrel rifles, short barrel shotguns, and full auto. NFA regulations are administered by BATFE, who issue tax stamps to approved applications to register NFA firearms following payment of the applicable tax.

Previously most applications to register NFA firearms have been submitted in hard copy followed by a wait of 6-9 months. During the Obama presidency, it was common for NFA applicants to wait as long as 18 months for a tax stamp. During this same period, ATF launched eForms, but it was limited to a few categories, such as ATF Form 5320.1, the ‘Application to Make and Register an NFA Firearm’ (Form 1). Typically, Arsenal Attorneys’ clients submitting Form 1’s electronically through eForms have received a tax stamp in just a few weeks. The most common Form 1 concerned building short barrel rifles (SBR). The new eForms system will accept Form 4 (ATF Form 5320.4), which is used to transfer an NFA firearm. The most common example of such an NFA transfer is the retail purchase of a silencer.

It may come as a surprise that eForms will expand to benefit NFA applicants during the Biden presidency. In fact, funding for eForms was previously budgeted due to the long-term efforts of firearms industry leaders, particularly Silencer Shop. In fact, Silencer Shop has maintained a close working relationship with ATF’s NFA Division to upgrade technology and improve efficiency. For example, in 2017 ATF adopted Silencer Shop’s proposal to bar code all the data in a Form 4. By scanning that code attached to the first page of an NFA transfer application, ATF staff avoided the need to manually input all that information. The combination of bar coding and the use of eForms for Form 1 greatly reduced the processing times for NFA tax stamps.

What if you have an NFA application pending with ATF?

Before cancelling NFA applications awaiting ATF approval, consider this guidance from the American Suppressor Association:

If you recently submitted an NFA application, keep it in the queue. We cannot stress this enough. Withdrawing your Form 4 and re-submitting electronically will take longer than allowing your Form 4 to make its way through the approval process. That’s because ATF isn’t going to dig through the tens of thousands of forms being processed to find your application. They’re going to wait until your Form 4 reaches an NFA examiners desk – the exact point at which it would normally be approved – to process your withdrawal. Instead of approving it though, they will acknowledge your withdrawal and release your serial number. You will not be able to re-submit an eForm 4 with the same serial number until ATF acknowledges your withdrawal and puts it back into your dealer’s inventory. Thus, withdrawing and re-submitting electronically will add months to your overall application process.

How can you take advantage of eForms?

NFA applicants could pursue a mixed strategy of buy now but wait and see. Once the new eForm system goes live, it is expected it will need 24-48 hours to become fully operational. Of course, Murphy’s law could apply to any launch of a government website. Recall the disastrous launch of the Obamacare website. Thus, it might be wise to wait and see when the new eForms is fully functional.

Nevertheless, this breaking news has sparked another spike in demand for NFA firearms, which could reduce inventories and increase prices. Remember, you can purchase an NFA firearm now, but delay the application until eForms is available. If eForms proves faulty and unreliable, then a traditional paper application could be a better option. That said, we encourage you to plan your next steps in cooperation with your FFL. Circumstances like the eForm launch highlight the importance of dealing with a reputable FFL who will provide good customer service and manage your NFA application through the ATF process.

Finally, we recommend use of a trust for any NFA application to avoid the danger of unlawful possession by those who have access to an NFA firearm. Also, an effectively designed trust, like Arsenal Attorneys’ proprietary Arsenal Gun Trust, can be a firearms-specific estate plan for an entire gun collection. We help clients ensure their firearms are distributed safely, lawfully, and privately. If you are an existing client, or if you have a trust obtained elsewhere, contact us to update your documents before submitting a new NFA application. Remember, if you have a poorly designed trust or a trust pre-dating the 2016 changes to the NFA regulations, you can update your existing trust by means of a 'restatement'. Contact us to learn more.

Arsenal Attorneys is a nationwide law firm headquartered in Fairfax, Virginia near metropolitan Washington, DC. The firm serves clients in over 30 states in estate planning, criminal defense, civil litigation, business law, landlord-tenant disputes, real estate, firearms law, restoration of rights, carry permits, and the firm’s proprietary Arsenal Gun Trust. Matthew Bergstrom is the firm’s Managing Attorney, and he is licensed in California, Michigan, Nevada, Virginia, and the District of Columbia.

This blog is intended for informational purposes only and is not intended as legal advice.

Arsenal Attorneys' Matthew Bergstrom will teach a seminar for lawyers on August 20 entitled "Firearms in Estate Administration: Legal Issues, Executor Liability, Transferring Title I and II Guns, Penalties--Understanding Gun Legal Designations, In-State and Out-of-State Transfers, Use of Gun Trusts." Mr. Bergstrom will be joined by attorneys Michael W. Zarlenga and Sam Hosey to deliver the program. This continuing legal education program is sponsored by Strafford Publications, and attendees may earn CLE credit as may be required by their state bar. 

This CLE webinar will guide estate planners and administrators on managing the legal challenges of firearms in estate and trust administration. The panel will discuss federal gun laws and firearm designations, issues for beneficiaries inheriting guns, in-state and out-of-state transfers, and legal ownership. The panel will also review the use of trusts and other entities to transfer guns legally, and best practices to avoid mishaps in the administration of estates or trusts holding firearms.

Arsenal Attorneys and our Arsenal Gun Trust services will be featured in an upcoming online seminar on August 20 for lawyers concerning estate planning for firearms entitled, "Firearms in Estate Administration: Legal Issues, Executor Liability, Transferring Title I and II Guns, Penalties -- Understanding Gun Legal Designations, In-State and Out-of-State Transfers, Use of Gun Trusts."

This CLE webinar will guide estate planners and administrators on managing the legal challenges of firearms in estate and trust administration. The panel will discuss federal gun laws and firearm designations, issues for beneficiaries inheriting guns, in-state and out-of-state transfers and legal ownership, use of trusts and other entities to legally transfer guns, and best practices to avoid mishaps in the administration of estates or trusts holding firearms.

The administration of an estate holding firearms can cause increased expenses, fees, taxes, and potential liability if mishandled. Managing guns within an estate requires an in-depth knowledge of a myriad of federal and state regulations to adhere to in order to avoid excessive fines and criminal liability.

The National Firearms Act (NFA) encompasses strict prohibitions and restrictions on the transfer of certain firearms. Prohibited possession can be actual or constructive with zero tolerance for inadequate processes in the acquisition. Also, state laws will apply to transfers or sales of firearms within their jurisdictions. If there is an out-of-state transfer or sale of a gun, compliance with federal and state laws becomes more complicated.

Estate planners and executors must be mindful of the possibility that some beneficiaries may be ineligible to receive firearms and consider alternative methods to align with a client's intent, such as naming alternate recipients or by creating a gun trust. Trusts can legally hold the firearms and allows a trustee to lawfully possess the firearms and minimize administration issues regarding the transfer or sale of firearms during probate.

The panel will discuss the classification, ownership, and transfer rules applicable to firearms, and the creation and use of guns trusts and other planning methods to ensure the proper administration of an estate holding firearms.

Seminar Topics will also include:

• Firearm classification, ownership, and transfer rules
  
• Federal and state gun laws
  
• Title I vs. Title II firearms
  
• In-state and out-of-state transfers
  
• Handling the estate administration of firearms
  
• Key considerations for gifts and bequests
  
• Valuation
  
• Legal ownership
  
• Potential penalties and liability
  
• Gun trusts
  
• Liability issues
• Sale or transfer of estate-held firearms
• Best practices for estate planners and administrators

For more information, contact Arsenal Attorneys using the contact form at our website.

ATF recently relaunched its online system allowing the public to submit ATF Form 5320.1, also known as “Form 1 - Application to Make and Register a Firearm.” Previously, the online system, often referred to as eFile, provided extremely fast approvals. The new ‘eForm’ system already appears to be slashing the wait time for tax stamps compared to ordinary paper applications.

A Form 1 is submitted by an applicant wishing to make a firearm regulated under the National Firearms Act (“NFA”). NFA firearms include machine guns, silencers, short barrel shotguns, and short barrel rifles (“SBR”). The most popular NFA firearm applicants wish to make by submitting a Form 1 is an SBR. A Form 1 may not be submitted to build full auto firearms. 

Under the NFA, a trust may be the registered owner or manufacturer of NFA firearms, but not for manufacturing for commercial purposes, which would require Federal Firearms License (“FFL”). A trust offers numerous benefits. Most notably, it could authorize possession of an NFA firearm by multiple people, and it could create an estate plan for the distribution of firearms outside of the probate court system.

Arsenal Attorneys™ have served thousands of clients nationwide using our proprietary Arsenal Gun Trust™ design, and we have taught this area of law for the American Bar Association and the Federal Bar Association among others.

To submit an eForm Form 1 in the name of a trust, follow these steps:

1. Create an eForms account by registering at https://eforms.atf.gov/EForms

2. Select the option to submit a Form 1, formally identified as ATF Form 5320.1.

3. Complete all required fields—remember the applicant’s name would be the name of the trust. All specifications for the firearm to be made must be specific. ATF no longer accetps responses like ‘multi’ to describe caliber, barrel length, etc.

4. Complete a ‘Responsible Person Questionnaire’ (Form 5320.23, known as ‘Form 23’ or the 'NFARPQ') for each ‘responsible person’, who would be required to provide fingerprints and a photograph (the Arsenal Gun Trust design helps clients submit NFA applications involving only a single ‘responsible person’). You must provide a photo for each responsible person identified in a Form 23. After submitting your application, ATF will provide directions for the fingerprinting (see #9 below).

5. Upload supporting documents, particularly the trust document (typically the ‘trust agreement’ and any amendments).

6. Identify your local Chief Law Enforcement Officer (‘CLEO’), who is typically your Sheriff.

7. Use the link to Pay.gov to make the $200 tax payment.

8. Submit the completed Form 1.

9. Check your email for a confirmation of your application from ATF, which should include two attachments. The first is a cover letter to use when mailing your completed FD-258 fingerprint cards to ATF. The second is the copy of your application you must mail to your CLEO. It is your responsibility to provide the CLEO this notification of your application. It is best to mail or ship that document to the CLEO with some sort of delivery/receipt confirmation. 

Here is a list of the most Frequently Asked Questions about completed a Form for a Trust--REMEMBER, always confirm you are using the most up-to-date version of any ATF Form because they do change.

Box 2: Remember, the applicant's name is the name of your trust. The address should be the location where this firearm will be located. It should be an address in the same state as your state of residence. If your trust documents include an address that is no longer correct, Arsenal Attorneys can prepare an amendment to make that correction or completely revise your trust by means of a 'restatement' to match the Arsenal Gun Trust design.

Box 3a: Insert your own name and home address as the responsible person of this trust. If there is additional responsible person in your trust, he/she would be identified on a Form 23. The new Arsenal Gun Trust design includes forms customized for you to remove such people so they are excluded from this process and the fingerprinting and photographs. Later, you may appoint a responsible person to your trust, and such a person would not need to provide fingerprints or photographs if he/she were not appointed to your trust in the capacity of a responsible person while an NFA application is in process with ATF.

Box 4b: If you are making an NFA firearm using a firearm previously made by another manufacturer, such as a stripped lower receiver to be built as a new SBR, you must provide the name and location of the original manufacturer identical to how that information appears on the existing firearm/receiver. For an imported item, be careful not to confuse the engraved name of the importer, if any, with the name of the manufacturer. If you are not using an existing firearm to make your new NFA firearm, you must identify your trust as the manufacturer. This would be the case for an 80% lower or a new silencer you wish to make. 

Box 4c: You must provide the model identical to how it appears on the existing firearm you are using. Like 4b, if you are not using an existing firearm, you should provide a new model name of your own creation.

Box 4d: As mentioned above, you may not claim 'multi' as the caliber. Specifiy the single caliber which will initially be used for the new firearm to be built. 

Box 4e: Always double check you have reported the exact serial number appearing on the existing firearm to be used in making the new NFA firearm. If none, then you may create one of your choosing.

Box 5: Identify the CLEO for the jurisdiction matching the address you provided in Box 3a. 

It is hoped that if this new eForms system proceeds smoothly, it will lead to the launch of an eForm 4, to submit ATF Form 5320.4 for the transfer of NFA firearms, such as required in a retail purchase of an NFA firearm like a suppressor.

In the words of one of Arsenal Attorneys’ favorite FFLs, these online systems could bring ATF from 1940s level of technology used for the traditional paper applications and fingerprints toward the 21st century.

Arsenal Attorneys serve clients in the area of firearms law. The firm serves clients across America from its headquarters in the metro-Washington, DC area. The firm is particularly renowned for its Arsenal Gun Trust, a solution helping clients in the registering, handling, and estate planning of firearms, particularly those regulated under the National Firearms Act. Arsenal Attorneys' team includes lawyers licensed to practice law in nearly every state where NFA firearms are lawful to possess.

Most NFA firearms, like silencers, are legal in the following states: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

This information is provided for informational purposes only, and it is not legal advice, nor does it establish an attorney-client relationship.