What is a "Gun Trust"?

Joshua G. Prince authored an article entitled The New Trust on the Block -- the "Gun Trust." I am pleased to post his simplified explanation of a concept foreign to many professionals and consumers.

Josh is now a third-year law student at Widener University School of Law (Harrisburg Campus). He was the author of three prior articles, which I edited and posted on this Blog in 2007 about the handling, transferring, and holding of weapons.

Based upon those article, he was a co-presenter with me in 2008 at three sessions for lawyers about "Guns in Estates & Trusts" held at the bar associations of Cumberland County, Dauphin County, and Berks County, PA. See: PA EE&F Law Blog posts DCBA Gun Session with a Heller of a Difference (07/07/08), and "Guns in Estates & Trusts" Seminar (04/25/08), and the many links included.

Josh can be reached at: joshua@princelaw.com. Feel free to contact him with any questions.

The New Trust on the Block -- the "Gun Trust"

Copyright © 2009 by Joshua G. Prince

As if estate planning was not already complex and all-encompassing, there is a new craze sweeping firearm enthusiasts throughout Pennsylvania and the rest of the United States. It is the Gun Trust. However, most attorneys are bewildered by this new trust and are asking: What is it? What is its purpose? What benefit does it give?

What is a "Gun Trust"?

In essence, a Gun Trust is a language specific trust that only holds Machineguns, Suppressors, Short-Barreled Rifles, Short-Barreled Shotguns, Destructive Devices, and/or Any Other Weapons (referred to as Title II weapons under the National Firearms Act¹) for the benefit of a beneficiary, while giving possessory and use rights to the trustee(s).

What is the Purpose of a "Gun Trust"?

To understand the purpose of a Gun Trust, one must understand the National Firearms Act (NFA of 1934)², the Gun Control Act (GCA of 1968)³, and the Firearms Owners Protection Act (FOPA of 1986).⁴ Specifically, under these laws, an individual must register any Machinegun, Suppressors, Short-Barreled Rifle (SBR), Short-Barreled Shotgun (SBS), Destructive Device (DD), or Any Other Weapon (AOW).

The Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) currently allows the registration of NFA firearms, by an “individual”, which is defined as: “A partnership, company, association, trust, estate, or corporation, as well as a natural person.”⁵

An individual looking to transfer/register a NFA firearm needs to file an application (BATFE Form 1 for making a NFA firearm, and BATFE Form 4 for transferring a NFA firearm⁶), in duplicate, provide a registration tax⁷, two sets of fingerprints, and two photographs.⁸ Furthermore, the individual must obtain the signature of a Chief Law Enforcement Officer (CLEO). While the application requires that the individual person obtain a CLEO signature, nothing mandates that a CLEO must sign an application for a NFA firearm, even if the applicant would pass the BATFE's rigorous background check.⁹

With many CLEOs refusing to sign for NFA firearms, even though both federal and state law allows for ownership, firearm enthusiasts sought different ways to acquire NFA firearms. In looking to the BATFE regulations, many saw corporations and trusts as viable alternatives, since they do not require a CLEO signature.¹⁰ With corporations requiring hefty startup costs, annual tax returns, and a lack of privacy, many began to investigate the trust alternative.¹¹

And so was born the Gun Trust. For a trust, the application must be submitted in duplicate, with the appropriate tax fee¹², but the trust is not required to submit fingerprints or photographs.¹³ More importantly, as stated above, a trust does not require a CLEO signature.

What benefit does a "Gun Trust" Offer?¹⁴

One of the highlights of a Gun Trust is the ability to acquire NFA firearms without a CLEO signature. However, there are numerous other benefits that flow from a gun trust. For instance, with a properly drafted gun trust, the trustee(s) will have the ability to possess and use the firearms, without violating their obligations as trustees and fiduciaries.

Another reason that many families opt for a Gun Trust is the ability for multiple people to use a weapon. When an NFA firearm is transferred or registered to an individual, only that individual may possess and use that NFA firearm. However, with a gun trust, any trustee may possess the firearm. Of course, for trustees to able to use the firearm, the trust must be properly drafted. Hence, where a family sets up a gun trust, all family members over the age of 18 could be designated trustees; thus enabling them to have possession of the firearm.

Another reason for a gun trust is the ability to draft it such that the trust will continue to hold the firearms until the beneficiary comes of age¹⁵ or until the trustee determines that the beneficiary is of such maturity that he/she can assume the responsibilities of ownership.

Also, in Pennsylvania, there is the possibility of a perpetual trust, since the Rule Against Perpetuities has been abolished. Thus, an individual who is concerned about future statutory changes, can form a gun trust that will provide these NFA firearms to generations to come without future transfers.

In states that have not done away with the rule against perpetuities or for short-term gun trusts, the BATFE allows a tax-free transfer, upon the death of the settlor/grantor, to the beneficiary, so long as, the beneficiary is a familial relation to the settlor/grantor.

Conclusion

These are but a few of the reasons that firearm enthusiasts are opting for gun trusts. However, a gun trust should not be drafted without sufficient knowledge of the NFA and BATFE's rapidly changing (sometimes daily) decisions regarding trust applications. While it is likely that the BATFE will institute a tighter regulations regarding gun trusts and gun corporations in the future, a gun trust could continue to provide substantial benefits over personal transfer/registration.

Maybe it will even be referenced in a law school textbook someday.¹⁶

* * *

Footnotes:

1 Title I weapons under the National Firearms Act, as amended, are the typical firearms that the public is accustom to seeing at the range or while hunting. These include handguns, bolt action rifles, and semi-automatic rifles.

2 26 U.S.C. § 5801 et seq.; 73 P. L. No. 474; 48 Stat. 1236.

3 90 P. L. No. 618; 82 Stat. 1213. (amending the National Firearms Act).

4 18 U.S.C. § 921 et seq.; 99 P. L. No. 308; 100 Stat. 449. (amending the National Firearms Act). FOPA prohibits the making or registering of any new machineguns. The author has posted online a copy of the entire NFA with amendments (PDF).

5 27 C.F.R. 479.11 (2003)

6 Electronic versions of these forms are posted online. Click on the desired form, and the page will change to a new page where you can input information. When submitted using the button in the lower left-hand corner, the form will be automatically filled in with that information. To see what a blank form looks like, just scroll to the bottom and hit "submit".

7 The registration tax will either be $5 (for Any Other Weapons) or $200 for all other NFA firearms.

8 26 U.S.C. § 5811; 26 U.S.C. § 5812.

9 Lomont v. O'Neill, 285 F.3d 9, 15 (D.C. Cir. 2002). Although a CLEO is not required to sign, further litigation is expected. See, Stephen P. Halbrook, Firearms Law Deskbook, 537-541 (Thomson/West, 2007).

10 BATFE, ATF National Firearms Act Handbook, 59 (June 2007) [See graphic above].

11 Another detriment to using a corporation is that many states require annual fees or levy stock assessments. Pennsylvania is not currently among those states. The author previously posted a further comparison of different entity options for NFA firearm ownership.

12 The registration tax will either be $5 (for Any Other Weapons) or $200 for all other NFA firearms.

13 26 U.S.C. § 5812.

14 The author previously posted a full discussion of gun trust issues and considerations.

15 To own or possess a NFA firearm, the individual must be at least 18 years of age.

16 Editors Note: Maybe, Josh; but "gun trusts" likely will not be promoted in the ATF's National Firearms Act Handbook.

DCBA Gun Session with a Heller of a Difference

On Tuesday, July 8, 2008, from noon to 1 p.m., the Dauphin County (PA) Bar Association will host a "Lunch & Learn" session for lawyers entitled "Weapons in an Estate or Trust: What to do with the Guns" at DCBA Headquarters, presented by Neil E. Hendershot and Joshua G. Prince.

This session will be a reprise of the popular presentation made on April 25, 2008, at the Cumberland County (PA) Bar Association, but with one key difference: the decision rendered by the U.S. Supreme Court on June 26, 2008, in District of Columbia v. Heller (PDF, 172 pages).

We will cover all the information outlined in the EE&F Law Blog posting "Guns in Estates & Trusts" Seminar (04/25/08).

At the conclusion of the session, we will speculate about the impacts of this decision, as Josh & I did in our three-part series "Right to Keep and Bear Arms" posted on this Blog after issuance of the Heller decision:

• Right to Keep and Bear Arms: Part I (06/27/08);

• Right to Keep and Bear Arms: Part II (06/30/08); and

• Right to Keep and Bear Arms: Part III (07/01/08).

This is a historic debate that will continue beyond our own time into decades of clarifying litigation to be conducted in federal and state courts. For one commentary, see "The Future of Gun Control" by Alex Altman, posted on Jun. 26, 2008, by Time Magazine.

One compendium of resources on these issues is The Journalist's Guide to Gun Policy Statements and Second Amendment Scholars.

Right to Keep and Bear Arms: Part III

How might the U.S. Supreme Court's decision in District of Columbia v. Heller (PDF, 172 pages) affect elderly persons resident in care institutions?

In this third part of a series on the "Right to Keep and Bear Arms", Joshua G. Price and I, together, speculate on the effects of that decision on the constitutional rights of patients in long-term care hospitals or facilities to keep firearms there.

For the previous parts, see "Right to Keep and Bear Arms: Part I" (06/27/08), and "Right to Keep and Bear Arms: Part II" (06/30/08).

D.C. v. Heller:
Effects on Seniors Resident in Facilities

by Neil E. Hendershot & Joshua G. Prince

As a matter of non-discrimination, the federal Second Amendment rights of elderly citizens to "keep and bear Arms" should parallel those of other citizens. But differences occur, in reality, when an elderly citizen becomes a resident in a long-term residential care facility.

During Neil Hendershot’s Elder Law class at Widener University School of Law over the past few years, the students were each asked to review an elder care institution and then provide oral and written presentations. One consistent prohibition that arose in these studies was that none of the facilities would allow the residents to possess firearms.

Private business institutions place many limitations on their guests or residents to further their business operations. Generally, however, state and federally-funded facilities may not limit rights arbitrarily that are conferred by a state constitution or by the United States Constitution, respectively.

The U.S. Supreme Court's decision in D.C. v. Heller raised many issues, but answered very few, other than the unconstitutionality of the law adopted by the District of Columbia that imposed virtually a complete ban on possession of handguns.

While the Majority Opinion of the Court noted, without further explanation, that the government may reasonably limit firearm possession in certain areas, such as schools and public places, it did not provide further guidance about such limitations.

If a federal government, like the District of Columbia, may not limit U.S. Constitutional rights in an outright ban of firearms by its residents, on what basis may a federally-funded, long-term residential care facility similarly totally and absolutely bar a resident's ability to possess a firearm? Facilities receiving federal Medicaid or Medicare funds may be compelled to consider that question.

Under the Heller decision, elderly citizens, like others, would retain their Second Amendment rights. When an individual enters senior housing or a long-term residential care facility that receives federal or state funding, under what circumstances can federal Second Amendment Constitutional rights, or similar constitutional rights, of that individual become limited?

State constitutional rights remain at issue because, under the concept of "New Federalism", a state may afford its citizens more rights than those afforded by the U.S. Constitution; and such rights are enforceable in state courts. See: Commonwealth v. Blood, 400 Mass. 61. Thus, these same questions may be asked under the constitutions of the various states, including Pennsylvania.

The Supreme Court in D.C. v. Heller acknowledged that Pennsylvania was one of the first states, in 1776, to declare that the Right to Bear Arms was an individual right; and that right remains enforceable. Presently, the Pennsylvania Constitution states that the Right to Bears Arms is an individual right: “The right of the citizens to bear arms in defense of themselves and the State shall not be questioned.” Pa. Constitution, Article 1, § 21.

While the Heller decision has no impact on enforcement of the Commonwealth's Constitutional rights, the recent attention on the issue of gun possession has highlighted these provisions. So, after Heller, under the Commonwealth's Constitution, can a facility or hospital that receives state funding place a total and absolute ban upon a resident's ability to possess a firearm, as the District of Columbia sought to do under its statute, now declared unconstitutional?

Questions of this nature are raised in the initial lawsuits filed by the National Rifle Association immediately after the Heller decision, as reported in various articles:

• "Wilmette Suspends Local Handgun Ban: NRA Files Suits In Chicago, Three Suburbs Challenging Gun Bans" (06/27/08), posted by WMAQ-TV NBC5 (Chicago, IL)
• "NRA sues S.F. over guns in public housing" (06/28/08), by Bob Egelko & Cecilia M. Vega, posted by the San Francisco Chronicle
• "Block SF Public Housing Handgun Ban", (06/28/08), posted by KPIX-TV CBS5 (San Francisco, CA)
  

There can be limitations on one's exercise of constitutional rights. The Majority Court in Heller noted that felons and the mentally ill can be limited in exercise of their Constitutional rights.

The dissent by Justice Breyer (joined by Justices Stevens, Souter, & Ginsburg), asserted that appropriate and reasonable limitations were permissible: "[T]he protection the [Second] Amendment provides is not absolute. The Amendment permits government to regulate the interests that it serves. Thus, irrespective of what those interests are — whether they do or do not include an independent interest in self-defense — the majority’s view cannot be correct unless it can show that the District’s regulation is unreasonable or inappropriate in Second Amendment terms."

Justice Breyer contemplated the question of limitation on rights:

How is a court to determine whether a particular firearm regulation (here, the District’s restriction on handguns) is consistent with the Second Amendment? What kind of constitutional standard should the court use? How high a protective hurdle does the Amendment erect? The question matters. * * *

Existing limitations in federal regulations prohibit an individual who has been involuntarily committed to a mental institution or adjudicated as a mental defective from owning firearms. 27 C.F.R. 478.32. Those regulations were not addressed by Heller.

Thus, the mental capacity of an elderly gun owner likely would be a key factor in guidelines proposed to restrict rights of a resident to possess a firearm in an affected senior housing or a long-term residential care facility.

What level of competency could be justified in guidelines limiting a resident's right to possess a firearm? What other factors would justify such a policy? Who would make such determinations? What would be the procedures for appeal or enforcement?

Other factors in such guidelines may not derive specifically from an elder's abilities, but more from the congregate living arrangement, much like the low-income housing setting.

Look to judicial opinions in the renewed round of post-Heller litigation to develop, over time, legal tests for enforceable limitations or protections of Second Amendment rights, including those applicable to the residents of long-term care facilities.

Update: 07/08/08:

Attorney Constance L. Brigman noted this and related postings in her blog entry on July 2, 2008, captioned "The Right to Bear Arms".

For a VERY through discussion of gun ownership and the elderly, go to this amazing blog: http://paelderestatefiduciary.blogspot.com. You really cannot beat this lawyer’s research on gun ownership. If you are at all interested in the issue, you should cut and paste the link into your browser * * *.

Right to Keep and Bear Arms: Part II

How does the ruling in District of Columbia v. Heller (PDF, 172 pages), issued June 26, 2008, by the U.S. Supreme Court, involve senior citizens?

Already, much commentary has analyzed the decision, including a prior posting on this Blog, "Right to Keep and Bear Arms: Part I", by Joshua G. Prince.

One media source alone -- National Public Radio -- has posted nine articles in three days since the decision's issuance:

• NRA Seeks to Overturn Handgun Bans Beyond D.C. (Jun-28-2008, Weekend Edition)
• Views Diverge over Gun Ruling (Jun-27-2008)
• Chicago-Area Gun Owners Praise D.C. Ruling (Jun-27-2008, Morning Edition)
• Gun Ruling Reverberates with Politicians, Police (Jun-27-2008, Morning Edition)
• McCain Praises Gun Ruling; Obama More Cautious (Jun-27-2008, Morning Edition)
• Gun Case Attorney Targets Laws in Other Cities (Jun-27-2008, All Things Considered)
• What the Handgun Ruling Really Means (Jun-27-2008, Day to Day)
• U.S. Gun Laws: A History (Jun-26-2008)
• Q&A: D.C. Gun Ban Overturned; What's Next? (Jun-26-2008)

I found the last article in this listing -- "D.C. Gun Ban Overturned; What's Next?", by Bill Chappell -- grounded and practical. Primary source documents regarding Heller are available on the Supreme Court of the United States Wiki.

Second Amendment rights are important to senior citizens, because gun ownership by that group appears common. For example, a 2001 survey in Marin Co., CA reported that about 21% of seniors in a household there had a gun. A 2005 Gallup Poll that indicated that about one-third of older Americans possess guns.

Americans aged 18 to 29 are slightly less likely than those who are older to be gun owners.

Only one in five 18- to 29-year-olds (21%) say they own a gun, while 32% of 30- to 49-year-olds and 31% of those aged 50 and older report ownership.

That Poll addressed the purposes -- hunting, target shooting, or self-protection -- for the guns owned:

Male gun owners are more likely than female owners to say they use a gun for hunting (63% to 45%, respectively) or for target shooting (68% to 59%), while female owners are slightly more likely than male gun owners to use a gun for protection (74% to 63%, respectively). * * *

There are essentially no differences between younger and older gun owners who use their guns for crime protection (67% among 18- to 49-year-olds and 64% of those aged 50 and older). * * *

Advocates of gun ownership argue that seniors gain a sense of well-being and safety because guns provide self-protection.

An article by Joe Guillen, published June 19, 2007, by The Plain Dealer (Cleveland,OH) asserted "Seniors feel safer when they carry [a] gun."

Jeff Garvas, president of Ohioans for Concealed Carry, said seniors should consider carrying a gun because criminals can interpret their physical weakness as an opportunity.

John R. Lott, author of the book More Guns, Less Crime: Understanding Crime and Gun-Control Laws, said guns are a safer method of self-defense for seniors because they may run slower or have less strength.

But gun-control advocates say society is safer with fewer armed citizens, not more. Senior citizens are no more at risk of being attacked than any other demographic group, said Toby Hoover, executive director of the Ohio Coalition Against Gun Violence. * * *

[Russ] Geis, of Stark County, isn't taking any chances. He refuses to rely on the habits of criminals and even law enforcement for his personal protection. He would rather count on his gun.

"That's the last thing a criminal wants to see," he said.

The collective effectiveness of such a deterrent resource is placed in question by study results recently released, according to an article, "Prof Says D.C. Handgun Ban Didn’t Affect Number of Murders", by Debra Cassens Weiss, posted on the ABA Journal on June 30, 2008:

A Florida State professor says the handgun ban in the District of Columbia did not affect the murder rate.

Gun control advocates argue handgun bans are needed to keep the weapons out of criminals’ hands. Gun control opponents, on the other hand, say the bans take guns away from law-abiding citizens who can use the weapons to deter crime.

Neither side is right, according to a study by Gary Kleck of Florida State’s College of Criminology and Criminal Justice. Kleck concludes in an interview with the New York Times that “the law itself had no effect one way or the other.” * * *

On the other hand, clearly handguns are a risk factor for suicide by elderly folks. And suicide rates for the elderly are higher than the general population. See: EE&F Law Blog posting "PA Aging Department Encourages Suicide Awareness" (09/13/06).

Generally, there are more deaths from handgun suicides than from handgun murders, according to a 1997 analysis of statistics. An article entitled "Mortal Allies: Guns and Suicide", by Matthew Miller, published in the Harvard Public Health Review (Summer, 2002), concluded:

A growing body of evidence indicates that the means at hand matter: where there are more guns, more people are taking their own lives.

For example, American case-control studies all find that a gun in the home is a strong risk factor for suicide, not only for the gun owner, but for other household members as well.

The risk of suicide associated with the presence of a firearm in the home is large (an increase of two- to five-fold in most studies), especially when the gun is a handgun or is stored loaded or unlocked.

See also: "Handguns In Home Boost Suicide Risk Among Elderly" (07/01/02), posted by the University of Rochester Medical Center.

Joan Arehart-Treichel noted in her article entitled "Several Factors Mitigate Seniors’ High Suicide Risk" (08/16/02), posted by Psychiatric News (Vol. 37, No. 16), that the increased risk of suicide posed by a firearm in a home can be offset by other factors.

The presence of a firearm in the home was found to be associated with an increased risk of suicide, even after controlling for psychiatric illness.

Elevated risk was accounted for by access to handguns rather than to long guns and was more pronounced in men than in women.

However, it is probably not the presence of a firearm in the home per se that constitutes a risk factor for senior suicides, but rather the recent purchase of a firearm, Conwell and his team contended. The reason, they explained in their study report, is that firearm suicide rates for the elderly have declined markedly in states that have instituted waiting periods or background checks, or both, for handgun purchases.

Yet just as depression, poor sleep quality, limited social support, and the recent purchase of a handgun may put seniors at risk of suicide, social support and religious beliefs may help protect them against it. * * *

On July 28, 2003, the U.S. Senate Committee on Aging heard testimony about suicide and seniors. A presentation by Donna Cohen, Ph.D., entitled "Depression and Violent Deaths in Older Americans: An Emergent Public Mental Health Challenge" (PDF, 10 pages), indicated that firearms are used for suicide 72% by persons over 65, versus 57% by persons of the general population.

The Physicians for Social Responsibility posted an article entitled "Firearms and Suicide" (PDF, 2 pages) that advocated limiting access to firearms as a means of reducing suicide rates. See also: MCES Quest Newsletter (March 2006) (PDF, 12 pages) regarding suicide prevention generally.

In their recently published book, Alive & Kicking, Kenney F. Hegland and Robert Fleming addressed some of these issues in their commentary, "Self-Abuse: Vegas, Booze, and the Question of Guns":

Handguns, not rifles, are the weapon of choice in elderly suicides. Guns don't require much planning: they are quick, easy, and the stuff of momentary despair.

Further, guns in the house, at the time of a heated argument, often prove lethal. * * * The lurking threat of domestic violence suggests that the presence of weapons is a very bad idea.

But what about self-defense? The presence of guns, rather than affording protection, may make things worse. With guns drawn, stakes are definitely raised and home invaders may simply disarm, and then shoot, their victim.

Gun critics, however, overlook the peace of mind having a gun may bring. An elderly couple with a gun in their home may not be, in fact, safer and, in fact, statistically may be less safe. However, they feel safer and live less fearful lives. As home invasions and suicides are rare, the psychic benefits of gun ownership may outweigh the risks. * * *

A recent study occurred in Pennsylvania that considered these matters using data from the Philadelphia area. The study, entitled "Firearms and Violence: Issues for Elder Health and Well-Being in Southeastern Pennsylvania" (2005), was conducted by Rose Cheney Ph.D., Douglas J. Wiebe Ph.D., Pamela Errico B.A., & Therese S. Richmond Ph.D., CRNP, FAAN, for the Firearm & Injury Center at the University of Pennsylvania. This research was presented in 2005 & 2006 to various groups.

The results were reported & summarized in a comprehensive graphic poster, available online, which included their conclusions:

• Firearm issues are important to the health and well-being of the elderly and are not limited to urban youth.

• Issues surrounding firearms and violence are complex. They cross individuals, households, and communities; risks and protection; feedback, interaction and anticipation.

• Information on firearms and the elderly is limited. Assessments on possible firearm risks should be collected or included in assessments of elderly health and safety.

• While for some elderly, firearms may serve a protective function, assessment of possible risks to self and others should be part of a safety assessments.

Tomorrow, we will conclude this three-part series with consideration of guns in nursing homes.

Update: 06/30/08 @ 7:30 pm:

One hour ago, Comcast posted an article entitled "Surprising fact: Half of gun deaths are suicides" (06/30/08) by Mike Stobbe, an Associated Press Medical Writer. The article was posted also by Yahoo, Fox News, MSNBC, and many newspapers.

The article contemplated the effects of the Heller decision on public health isssues, and highlighted a prevailing use of handguns to commit suicide:

The Supreme Court's landmark ruling on gun ownership last week focused on citizens' ability to defend themselves from intruders in their homes. But research shows that surprisingly often, gun owners use the weapons on themselves.

Suicides accounted for 55 percent of the nation's nearly 31,000 firearm deaths in 2005, the most recent year for which statistics are available from the Centers for Disease Control and Prevention.

There was nothing unique about that year — gun-related suicides have outnumbered firearm homicides and accidents for 20 of the last 25 years. In 2005, homicides accounted for 40 percent of gun deaths. Accidents accounted for 3 percent. The remaining 2 percent included legal killings, such as when police do the shooting, and cases that involve undetermined intent.

Public-health researchers have concluded that in homes where guns are present, the likelihood that someone in the home will die from suicide or homicide is much greater. * * *

The high court's majority opinion made no mention of suicide. But in a dissenting opinion, Justice Stephen Breyer used the word 14 times in voicing concern about the impact of striking down the handgun ban.

"If a resident has a handgun in the home that he can use for self-defense, then he has a handgun in the home that he can use to commit suicide or engage in acts of domestic violence," Breyer wrote. * * *

The article noted the availability online of statistics from the Centers for Disease Control about gun injury statistics.

The article validates many of the points that I made above, using different sources.

Update: July 01, 2008:

For Part III of this Series, see: "Right to Keep and Bear Arms: Part III" (07/01/08).

Right to Keep and Bear Arms: Part I

On June 26, 2008, the U.S. Supreme Court ruled 5-4 in District of Columbia v. Heller (PDF, 172 pages) upon the meaning of the Second Amendment to the U.S. Constitution regarding "the right of the people to keep and bear Arms."

The Supreme Court upheld the District Court's ruling that the Second Amendment protects an individual’s right to possess firearms, and that the city’s total ban on handguns -- as well as its requirement that firearms in the home be kept nonfunctional even when necessary for self-defense -- violated that right. This landmark ruling is that Court's first comprehensive consideration of the Second Amendment since its enactment in 1791.

The ruling was covered extensively by the media. See, for example, the Associated Press article entitled "High court affirms gun rights in historic decision" (06/26/08) posted by Comcast. See also: "Supreme Court Rules 5-4 that Second Amendment Protects Right to Own Guns" (06/26/08), & "Most Gun Laws Legal Under High Court Ruling, But Chicago’s Is an Issue" (06/27/08), both by Debra Cassens Weiss, posted by the ABA Journal Blog; and "Not So Fast! Sizing up the Heller Ruling’s Immediate Effect on D.C." (06/26/08), by Ashby Jones, posted on The Wall Street Journal Law Blog (source of graphic).

Postings on this Blog will consider the ruling in three parts.

Part I is written by law student Joshua G. Prince, who has written three prior articles posted on this Blog about firearms in the context of estates or trusts. See:

• "I bequeath my machine gun to . . ." (Sep. 12, 2007) -- Grandpop’s Machine Gun in the Chest, Part I
• "I Inventory the SBR, AOW, DD, & Suppressor at . . ." (Oct. 19, 2007) -- Grandpop’s Machine Gun in the Chest, Part II
• Estate Planning for Grandpop's Gun in the Chest (Nov. 11, 2007) -- Estate Planning 101 under the National Firearms Act

Part II will be written by me, to be posted on Monday, June 30th, about the relevance of this ruling to senior citizens.

Part III will be written by both me & Josh as to potential effects of the ruling upon residents of long-term care facilities.

Josh was present in the U.S. Supreme Court building yesterday morning when Justice Scalia read the majority opinion of the Court. He considers aspects perhaps overlooked in initial media reports. I thank Josh for his continuing contributions to this field of law.

District of Columbia v. Heller:
The Rebirth of the 2nd Amendment
Copyright © by Joshua G. Prince

June 26, 2008 marks a day in history when a Constitutional Right, which to some was ambiguous was reborn. Reborn not in the sense of something new and different from that of before, but in the sense of something that was forgotten and left to wither until new life was breathed into it.

In District of Columbia v. Heller, Dick Heller, a D.C. resident and special police officer (authorized to carry a handgun while on duty at the Federal Judicial Center) sued the District of Columbia after being denied the ability to register a handgun for home protection.

Specifically, “[h]e filed this suit seeking, on Second Amendment grounds, to enjoin the city from enforcing the bar on handgun registration, the licensing requirement insofar as it prohibits carrying an unlicensed firearm in the home, and the trigger-lock requirement insofar as it prohibits the use of functional firearms in the home.” (D.C. v Heller, at p. 1).

The Supreme Court of the United States held:

1. “The Second Amendment protects an individual right to possess a firearm unconnected with service in a militia, and to use that arm for traditionally lawful purposes, such as self-defense within the home. . .”
2. “Like most rights, the Second Amendment right is not unlimited. . .”
3. “The handgun ban and the trigger-lock requirement (as applied to self-defense) violate the Second Amendment.” (Id. at pp. 1-3).

As hundreds of thousands of people review the decision, the legal community combs through it with a fine-tooth comb, and the media makes up their own interpretations and theories of the decision, many lay citizens are left to scratch their head wondering if all gun laws throughout the U.S. are now null and void.

The answer is simple: No.

So, what effect does this decision have on the present? The answer is not much outside the District of Columbia; and even in D.C., the effect is limited. In D.C., after 21 days, residents will be able to register handguns. This may present a problem because there aren't any firearm dealers in the District currently, due to the regulations. Thus, there will likely be an onslaught of entrepreneurs looking to open up firearm businesses, which requires a Federal Firearms License (FFL).

To acquire an FFL, one must go through the licensing requirements set forth by Bureau of Alcohol, Tobacco, Firearms, and Explosives. However, licensing takes several months, and thus, will result in further delay, especially since the D.C. Code §§ 7-2502.01-7-2506.01 bans possession, sale, transfer, manufacture, purchase or repair of handguns, and it is forbidden to sell ammunition within the District. Moreover, one must have a "retail dealer" license to sell any goods in DC, and no license can be given for selling things that are banned. Hence, now that handguns, in total, are not banned, individuals should be able to acquire FFLs.

The current law in the District provides that any semi-automatic pistol is a “machinegun.” Senator Hutchinson, from Texas, is currently working on legislation to bring D.C.'s Code into conformity with Federal law on what constitutes a “machinegun”; thus, a semi-automatic pistol would not equate to a “machinegun.”

Hence, as many are saying, so what is the big deal with the decision?

The key point in this case was the decision that the the 2nd Amendment Right to Bear Arms is an individual, not a collective, right. While the decision as it pertains to the regulations of D.C. was a 5-4 vote, the decision on whether the 2nd Amendment was an individual right was a 9-0 vote. (D.C. v Heller, at p. 1; J. Stevens dissenting, joined by J. Souter, J. Ginsburg, and J. Breyer at p. 1).

What are the ramifications of this decision for the future? As the National Rifle Association has already declared, it will be initiating follow-up litigation in Chicago to deal with the handgun ban there and in California and D.C. where individuals cannot receive public housing unless they agree not to own any firearms. Then, as time progresses, it is likely that bans on particular weapons, including weapons termed “assault weapons” merely because of their appearance, will be challenged. It is also possible that at some point in the future the Firearm Owner Protection Act (FOPA), which banned the making of machineguns after 1986, will be challenged.

However, given the narrow majority of the Court's decision and the language used by the majority, it does not appear that a current-day challenge to FOPA would result in a favorable decision.

Hence, as the Court noted, the boundaries of the 2nd Amendment have yet to be determined.

What is clear is that each and every individual citizen of the United States has a right to keep and use Arms. What those “Arms” are, will be decided in the months and years to come.

Update: June 30, 2008:

For Part II of this Series, see: "Right to Keep and Bear Arms: Part II" (06/30/08).

Update: July 01, 2008:

For Part III of this Series, see: "Right to Keep and Bear Arms: Part III" (07/01/08).

"Guns in Estates & Trusts" Seminar

On Friday, April 25, 2008, at noon, a one-hour seminar was presented at the Cumberland County Bar Association, in Carlisle, PA, by Neil E. Hendershot & Joshua G. Prince on the topic "Weapons in an Estate or Trust: What to do with the Guns?"

This was the outline for the presentation:

1. Introductions, Handouts, and Audience Poll
2. Concerns raised by possession of a weapon
3. Legal References:
• Firearms Law Deskbook, by Stephen P. Halbrook (available on Westlaw; Updated September 2007)
• Pennsylvania Bar Institute Publication № 04488, Dealing with Firearms in Estates & Business Transactions (Nov, 2006), by in e-pub, book, audio, or book & audio; and PBI Publication № 04914, The Law of Guns in Pennsylvania (Dec, 2007), by Thomas J. Rozman, Esq.
4. Overview of relevant federal & PA firearms laws:
• See: 26 USC 5801, et. seq.
• National Firearms Act -- ATF Informational Links
• PA Crimes Code, Title 18, Chapter 61 re "Firearms and Other Dangerous Articles"
• Summary of PA firearms laws in PSP Brochure
• Summary of PA gun use laws in Your Pennsylvania Gun Rights, posted by PA Open Carry.
5. Review of articles by Joshua G. Prince (edited by Neil E. Hendershot) as posted on the PA Elder, Estate & Fiduciary Law Blog:
• "I bequeath my machine gun to . . ." (Sep. 12, 2007) -- Grandpop’s Machine Gun in the Chest, Part I
• "I Inventory the SBR, AOW, DD, & Suppressor at . . ." (Oct. 19, 2007) -- Grandpop’s Machine Gun in the Chest, Part II
• Estate Planning for Grandpop's Gun in the Chest (Nov. 11, 2007) -- Estate Planning 101 under the National Firearms Act
• See also: "Violating Due Process: Convictions Based on the National Firearms Registration and Transfer Record When Its Files Are Missing", by Joshua G. Prince (2008), posted online.
6. Guns in an Estate:
• Finding & Handling -- AHSA Principles of Gun Safety
• Identifying, Listing, & Valuing:
• Type Characterization:
• ATF on Identification of Firearms - Part 1 [Print Version] (7/28/06)
• ATF on Identification of Firearms - Part 2 [Print Version] (7/28/06)
• Appraisal Guides:
• Blue Book of Gun Values -- 29th Edition (2008) will be 2,176-pages long, available in book, CD, downloadable, & subscription formats
• Standard Catalog of Firearms, by Schwing
• Flayderman's Guide to Antique American Arms
• R.L. Wilson's Official Guide
• Standard Catalog of Smith & Wesson, by Jim Supica & Richard Nahas
• See: Armchair Gun Show's Gun Values
• See: Shotgun World's Identification & Appraisal Links
• See: Guns & Ammo's Directory
• See: Links for Curios & Relics
• Securing, Transporting, & Insuring:
• See: Safe Gun Storage
• See: Transporting Firearms Safely
• See: Differences Between Firearm Insurance and Firearm Business Insurance, by Hilary Bowman
• See: Liability Insurance and the Regulation of Firearms, by Tom Baker & Thomas Farrish, posted on SSRN
• Selling:
• See: 100 Top Gun Sites
• See: Frequently Asked Questions re Gun Dealers in PA by the PA State Police
• Example of commercial listing: Internet Shooting Directory of Gun Dealers (by state)
• Transferring or Distributing
• ATF Special Notice on "Transfers of National Firearms Act Firearms in Decedents' Estates" (Rev 02/23/06).
• ATF Letter (12/29/05) Open Letter to All PA Federal Firearms Licensees re private transfers of handguns to individuals (18-21 yrs old)
7. Guns in a Trust; and a "Gun Trust":
• Weapons as tangible personal property with special characteristics
• Class 3 Firearm under the National Firearms Act
• See: Florida Estate Planning Lawyer Blog, by David M. Goldman, Esq., under topic "Gun Trusts"
8. Online resources (see below)

Both Josh & I are firearms owners & users (he far, far more than me). However, this seminar was not about the politics of gun ownership, including the effects of gun availability on crime or self-protection, or local governmental regulation of firearm possession, as recently argued before the United States Supreme Court on March 18, 2008, in the case District of Columbia v. Heller.

Instead, this seminar considered what to do when a firearm falls into the hands of an estate's personal representative or a trust's fiduciary.

In connection with the seminar, I post below some additional online resources that Josh & I recommend for the proper "care and feeding" of weapons, whether held by an individual, or by an estate/trust:

Pennsylvania:

• PA Attorney General:
• Firearm Reciprocity Agreements with other states
• PA State Police:
• Information for Pennsylvania Firearms Purchasers and Basic Firearm Safety -- Brochure: SP4-135 - Information For Pennsylvania Firearm Purchasers & Basic Firearm Safety (PDF, 2 pages)
• Pennsylvania's "Instant Check System" explained
• Reports, Information and Safety Brochures (including dealer forms)
• "Frequently Asked Questions" about carrying firearms in PA
• Firearms Dealers Newsletters (2002 to date)
• Pennsylvania Firearm Owners Association:
• Concealed carry
• Reciprocity agreements
• Pennsylvania Gun Collectors Association
• Pennsylvania Open Carry
• Pennsylvania Rifle and Pistol Association

Federal & National:

• Bureau of Alcohol, Tobacco, and Firearms (ATF or BATF):
• Program Information
• ATF Online Learning Center
• Federal Firearms Regulations Reference Guide 2005 (Revised - 9/05) -- Downloadable as PDF (4.5 MB)
• Personal Firearms Record for inventory purposes
• National Instant Check System
• American Hunters & Shooters Association:
• National Rifle Association

Update: 04/27/08

After the seminar, Josh made postings about it on the Pennsylvania Firearm Owners Association Discussion Forum. See:

• PA Gun Laws regarding Estates and more... (04/26/08)

• Sheriff Kline & NFA (04/25/08)

Update: 06/27/08:

See: "Right to Keep and Bear Arms: Part I", posted on this Blog.

Estate Planning for Grandpop's Gun in the Chest

Following is an article written for this Blog entitled "Estate Planning 101 under the National Firearms Act", by Joshua G. Prince. He explores issues related to firearms owned by an estate planning client, possessed by a trust, or distributed through an estate.

This article is an appropriate posting for Veterans' Day. Josh's advice should be helpful to estate planners and gun owners, alike.

This is the third of three articles written by Josh, who is a student in my current Elder Law class at Widener University School of Law (Harrisburg Campus). The prior two articles posted on this Blog were: "I bequeath my machine gun to . . ." (09/12/07); and "I Inventory the SBR, AOW, DD, & Suppressor at . . ." (10/19/07).

We acknowledge the input of an experienced Florida practitioner, David M. Goldman, who is very knowledgeable in the area of "gun trusts". He also writes a fine blog, the Florida Estate Planning Blog, and writes about this subject, such as in his posting, "Florida Gun Trusts or National Firearms Trust".

Thank you, Josh, for this, and your previous articles.

Estate Planning 101 under the National Firearms Act
Copyright © 2007 by Joshua G. Prince
For reprint permission, send an email to: joshua@princelaw.com

As an estate attorney, how do you handle the planning of an estate, which includes National Firearms Act [NFA] firearms? What if your client asks you, prior to his/her purchase of a NFA weapon, what is the best form of ownership, with long term estate planning in mind?

This issue may plague estate attorneys, leaving them to scratch their head in bewilderment as to the correct course of action. More importantly, a probate attorney may be flirting with malpractice, since the registration of NFA weapons is mandatory and ignorance is not a defense.

To begin, one must understand what a “transfer” of a NFA firearm entails, and which registration entity best suits his/her client. The Bureau of Alcohol, Tobacco, Firearms and Explosives currently allows the registration of NFA firearms, by an “individual,” which is defined as “A partnership, company, association, trust, estate, or corporation, as well as a natural person.”[1] The correct entity will depend on the clients current and future desires.

The “transfer,” of a NFA firearm, is defined as the, “[S]elling, assigning, pledging, leasing, loaning, giving away, or otherwise disposing of” an NFA firearm.[2] The lawful transfer/registration of a NFA firearm is dependent on the entity, which is registering the firearm. Moreover, certain entities allow for a prohibited person to buy and sell NFA Firearms, for economic purposes, which may be a determining factor in deciding which entity should be utilized.[3]

For the purposes of this article, I will deal with the requirements, benefits, and detriments of registering a weapon as an individual person, corporation, or trust.

The individual person looking to register a NFA firearm needs to file an application (BATFE Form 4, pg 172-74), in duplicate, to provide a two-hundred dollar ($200) registration tax, two sets of fingerprints, and two photographs.[4] Furthermore, the individual must obtain the signature of a Chief Law Enforcement Officer [CLEO]. “Acceptable certifying officials include chiefs of police, county sheriffs, heads of State police, State or local district attorneys, or such other persons whose certificates may in a particular case be acceptable to the Director.”[5]

While the application requires that the individual person obtain a CLEO signature, nothing mandates that a CLEO must sign an application for a NFA firearm.[6] Thus, many individuals, who cannot obtain a CLEO signature, register the weapon to their corporation or trust.

The benefit to the estate owning a NFA firearm is that, upon the death of the registrant, the firearm may be transferred to the specified heir, on a registration tax-free transfer (BATFE Form 5, pg 174-76).[7] Moreover, the heir need not obtain a CLEO signature.8]

The detriments are: 1) prohibited individuals may not own NFA weapons; 2) the registrant must always be in possession of the weapon; and 3) the individual must acquire a CLEO signature.[9] As discussed in footnote 3, an individual person who is prohibited cannot obtain, even for economic purposes, a NFA weapon.[10] A person who becomes prohibited during ownership, must relinquish ownership and possession of the weapon.

In a trust, the application must be submitted in duplicate, with the two-hundred dollar ($200) tax fee, but the trust is not required to submit fingerprints or photographs.[11] However, the trust must currently submit the Certification of Trust, but may, in the very near future, require the Declaration of Trust.[12] More importantly, a trust does not require a CLEO signature.[13] Thus, in locales where the CLEO refuses to sign, the best option is either a trust or corporation.

The benefit to a trust is that: 1) the cost is incurred once, unless changes are required during the settlor’s life; 2) multiple individuals can be listed as the trustees;[14] 3) a trust will not fail for lack of a trustee, since the court will appoint one;[15] and 4) if the transfer of NFA firearms becomes prohibited, the trust, if properly drafted, will continue to provide the NFA firearm(s) to generations to come.

Nonetheless, there are several detriments: 1) in comparison to the registration of an individual person, the person must incur the cost of setting up the trust;[16] 2) there is no tax free death transfer, since the trust does not die; 3) while the trust ensures that a NFA weapon can continue to benefit future beneficiaries,[17] those beneficiaries are limited, in comparison to a corporation; and 4) it requires an attorney with incredible foresight and understanding of trusts and firearms. For an in-depth review of NFA revocable trusts, see Bob Howell Esq.’s article.[18]

A corporation, like a trust, requires the same submission, but a copy of the Articles of Incorporation, Limited Liability Registration, or other documentation showing the registration of the corporation, in lieu of the Certification of Trust.[19]

The benefits to a corporation are numerous: 1) It is possible for a prohibited person to administer the corporation, but may not possess any of the firearms;[20] 2) the corporation may be sold, without transferring the NFA firearms;[21] and 3) any listed “officer” or “paid employee” may legally possess the firearm.

The detriments are several: 1) the individual has the initial setup cost of the corporation; 2) the corporation must file tax returns and other state required filings, annually and pay any fees incurred; and 3) a corporation does not offer the privacy of a trust.[22]

The long term foresight, for issues that may or are likely to arise in firearm trusts and corporations, is the cause of concern for individuals using Quicken™ Wills and Trusts. While this list is not all inclusive, some of the issues are: 1) who are listed as beneficiaries and trustees, for the long term; 2) what if a beneficiary does not want the benefit, or the trustee does not want the responsibility; 3) how to handle beneficiary living in another state, where such firearms may be banned, or where the BATFE requires a transportation form (BATFE Form 5320.20, pg. 185-186) to be filed;[23] 4) what if the beneficiary is prohibited; 5) how to handle numerous beneficiaries desiring the use of the benefit at the same time;[24] 6) how does the trust or corporation pay for damage to the firearm(s); 7) the trust/corporation’s liability if the firearm is used in a crime or accidental injury; 8) at what point, if any, is the firearm to be sold, and if sold, how should the proceeds be divided up; 9) where is the firearm to be kept; 10) is the trust/corporation responsible for ammunition, service, and maintenance of the firearms, and if so, through what pecuniary means; 11) what form of insurance must be maintained and by what means; 12) how is the trustee to be compensated; and 13) what if the beneficiary is a child[25]?

While clients may balk at the cost of an attorney to setup a trust or corporation, unlike receiving a bad haircut, which can be rectified, the use of generic forms or software may cause more serious harm -- the loss of the NFA weapon at the time of the settlor’s death. It is crucial to explain to the client that by saving a few dollars today, they may be denying their future heirs that which that sought to protect.

Whichever entity is employed, it is crucial for the attorney to keep copies of all approved firearm registrations, since the National Firearms Registration and Transfer Record [NFRTR] is grossly inaccurate.[26] The copy of the registration(s) may prove invaluable to a client facing prosecution for illegally possessing a firearm, with penalties of ten (10) years and up to two-hundred and fifty thousand dollars ($250,000).[27]

Since the circumstances of every client are different, the proper choice for registering a NFA Firearm, with regards to estate planning, is dependent on the weighing of the benefits and detriments. While the corporation route may offer the most benefits and protections, it is also the most costly.

FOOTNOTES:

[1] 27 C.F.R. 479.11 (2003)

[2] 26 U.S.C. 5845(j); However, in U.S. v. Kiefer, the court held that the criminal defendant had not transferred a NFA firearm in part, because he did not receive any consideration, “which could have been regarded as evidence of his proprietary interest in transfers.” U.S. v. Kiefer, 694 F.2d 1109, 1114 & n.3, 11 Fed. R. Evid. Serv. 1832 (8^th Cir. 1982). The court continued, “The plain implication is that a transferor is one controlling the ultimate disposition of the weapons, not a person without such control performing the simple act of physically handing the guns to another. Moreover, Congress, by requiring payment of a tax and registration of the transfer, clearly intended to require that a transferor have more of a proprietary interest in the weapon than just the mere transitory physical possession of it.” (citing U.S. v. Hurd, 642 F.2d 1179, 1182 (9th Cir. 1982).

[3] 18 U.S.C. 922(g) (2005), stating: “It shall be unlawful for any person--(1) who has been convicted in any court of, a crime punishable by imprisonment for a term exceeding one year; (2) who is a fugitive from justice; (3) who is an unlawful user of or addicted to any controlled substance (as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802)); (4) who has been adjudicated as a mental defective or who has been committed to a mental institution; (5) who, being an alien--(A) is illegally or unlawfully in the United States; or (B) except as provided in subsection (y)(2), has been admitted to the United States under a nonimmigrant visa (as that term is defined in section 101(a)(26) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(26))); (6) who has been discharged from the Armed Forces under dishonorable conditions; (7) who, having been a citizen of the United States, has renounced his citizenship; (8) who is subject to a court order that--(A) was issued after a hearing of which such person received actual notice, and at which such person had an opportunity to participate;(B) restrains such person from harassing, stalking, or threatening an intimate partner of such person or child of such intimate partner or person, or engaging in other conduct that would place an intimate partner in reasonable fear of bodily injury to the partner or child; and(C) (i) includes a finding that such person represents a credible threat to the physical safety of such intimate partner or child; or (ii) by its terms explicitly prohibits the use, attempted use, or threatened use of physical force against such intimate partner or child that would reasonably be expected to cause bodily injury; or (9) who has been convicted in any court of a misdemeanor crime of domestic violence, to ship or transport in interstate or foreign commerce, or possess in or affecting commerce, any firearm or ammunition; or to receive any firearm or ammunition which has been shipped or transported in interstate or foreign commerce.” It must be noted that while the term “prohibited person” carries with it extreme prejudice, an individual may be prohibited if a restraining order has been issued against the individual. Since restraining orders are easily instituted, an innocent, law-abiding individual may become prohibited.

[4] 26 U.S.C. 5811; 26 U.S.C. 5812.

[5] BATFE, ATF National Firearms Handbook, 59 (June 2007)(citing 27 CFR 479.85), available at http://www.atf.gov/firearms/nfa/nfa_handbook.

[6] Lomont v. O’Neill, 285 F.3d 9, 15 (D.C. Cir. 2002). Although a CLEO is not required to sign, further litigation is expected. See, Stephen P. Halbrook, Firearms Law Deskbook, 537-541 (Thomson/West, 2007).

[7] BATFE, ATF National Firearms Handbook, 57 (June 2007).

[8] BATFE, ATF National Firearms Handbook, 57 (June 2007).

[9] The issue of possession of a weapon is crucial to an NFA firearm owner, in a family, which wishes to share in the use of the firearm. When registered to an individual person, that person must always be with the firearm; thus, a father could not allow his son to take the weapon to the range. This can be circumvented where a trust and corporation registers the weapon.

[10] Many individuals have found that investing in NFA firearms can yield extremely lucrative results.

[11] 26 U.S.C. 5812

[12] See, for example, comments posted on an online forum discussion [requires a log in] (discussing a current post, by a BATFE examiner, stating that the BATFE may be requiring the Declaration of Trust, in the near future.)

[13] BATFE, ATF National Firearms Handbook, 59 (June 2007).

[14] Any individual listed as a trustee may lawfully possess the firearm.

[15] David M. Goldman, Esq., email correspondence on 9/17/2007.

[16] Many individuals are buying Quicken™ Will and Trust Maker, which is of concern to firearms attorneys. While Quicken may be perfectly fine for a typical will or trust, there are specialized issues that one must consider for a NFA trust, such as: who should be a trustee, can a prohibited person be a trustee, what if the trust isn’t properly filed with the state, where required, and the absence of any other legal protections that a properly drafted trust may offer.

[17] It must be noted that while the beneficiary receives the benefit of being able to “use” the NFA firearm, the trustee must always be in possession of the NFA firearm. Thus, anytime the beneficiary desires to use the weapon, he/she must be in the company of the trustee.

[18] Bob Howell, Use of the Revocable Trust to Purchase NFA Items.

[19] BATFE, ATF National Firearms Handbook, 29, 56 (June 2007).

[20] Id. at 29. Thus, if a prohibited individual is interested, for economic means, in the purchasing and selling of NFA firearm, they may be able to, under a corporation.

[21] This could be extremely beneficial if the Government ever prohibits the transfer of NFA firearms, since the corporation could be sold, without the transfer of any firearms.

[22] David M. Goldman, Esq., email correspondence on 9/17/07. Mr. Goldman also brought to my attention that a corporation, in comparison to a trust, requires more expensive commercial insurance.

[23] See Supra, FN 16.

[24] Id.; Also, David M. Goldman, Esq., email correspondence on 9/17/07, stating that Quicken™ or most trusts only give the Trustee the ability to divide assets when an equitable or nearly equitable distribution is created, it may be far more beneficial for a Trustee to make a distribution by piece when NFA weapons are involved.

[25] David M. Goldman, Esq., email correspondence on 9/17/07. Currently, the age to purchase a NFA firearm from a dealer is 21 years old; however, the BATFE has recently stated that an individual to individual transfer (meaning of the same state) of an NFA weapon may occur when the registering party is 18 years old, so long as, it is not in conflict with state laws. Such registrations have been approved by the BATFE. Another concern is the future disposition of a child, which may require a trustee to make a determination of whether the beneficiary, at the age specified, is mature or mentally able to handle the responsibilities of NFA ownership.

[26] Deron Dobbs, Status Report National Firearms Registration and Transfer Record, 15 (1981).

[27] 26 U.S.C.S. §§ 5861(d),(j); 26 U.S.C.S. § 5872; 49 U.S.C.S. §§ 781-788.

Update: 11/13/07:

Josh Prince sent me an email message containing an exchange between him & Charles Smyder, of Alachua, Florida, regarding one issue raised in the article -- BATF's review of an entire trust agreement, as opposed to a summary or certification of a portion of it.

This is their conversation, which Josh asked that I post. Of course, this exchange does not represent any legal advice, but it does contain a point of caution:

CS: One revision Josh, I can confirm that BATF is now most defineately requiring the submission of the Declaration or full copy of the trust. It's my unconfirmed understanding that they have added staff to review each trust on an individual basis to acertain that the trust laws of the state have been met.

They have in fact kicked back Form 4 applications where there were legal errors. Processing of Form 4 transfers to trusts have slowed to where they take longer than indvidual Form 4 transfers.

JP: There are legal issues of them requiring the entire trust, because the trust is suppose to be a private document. I think if the person submits a certification of the trust, by an attorney, the BATFE has no choice. They have NO legal authority to determine the legality of a trust.

CS: Josh, I can tell you as a Florida NFA dealer, that they are now kicking back Form 4's and Form 1's if the complete copy of the trust is not submitted. Certification is no longer sufficient.

If you'd like further information, you can contact Sandra Snook at the NFA branch (304-616-4500). She is the signor and point of contact on every rejected trust transfer.

I'd be curious to know the results of any legal challenge and what the NFA branch's legal justification is behind requiring the full copy of the trust.

Incidentally, in FL there is no requirement for a Trust to be recorded. It is personal document and requires only that the grantor's signature be notorized & witnessed.

Update: 11/19/07:

This posting was noted recently on the Wills, Trusts & Estates Prof Blog, in "Estate Planning and Transfer of NFA Firearms – Examining the Alternatives" (11/19/07), by Professor Gerry W. Beyer.

Update: 06/27/08:

See: "Right to Keep and Bear Arms: Part I", posted on this Blog.