Gun Trust

H.R.2427 – NFA Modernization Act of 2021
(For a link to your Congressperson, click the link above)

There is a new sheriff in town.  His name is Joe Biden.  The Biden administration has already floated the idea of applying the $200 National Firearm Act (NFA) tax to all semi-automatic rifles.   The sleeper is the application of the NFA, in general, to those rifles.  And for that reason, many individuals are considering a gun trust.

To understand the issue requires starting with the Colorado background check law enacted on July 1, 2013.  The 2013 law required a background check on all Colorado gun sales.  Sounds reasonable, right?  Well, the law is not about gun sales.  The law is about firearm possession.  Anytime a Colorado firearm is handed off to anyone, the question you must ask is, is a background check and approval of the transfer required?

As originally introduced by the Colorado House, the 2013 law required a background check on almost any transfer of possession no matter how temporary.  Out in the field plunking cans and your buddy wants to try out your new rifle?  Background check required.  Want to leave the gun in your house and available to your spouse?  Background check required.  Want to take your gun to a gunsmith and get it cleaned up?  Background check required.  Want to get the gun back from the gunsmith?  Background check required.  And of course, a fee each time.

When the 2013 law came out of the Colorado House, many individuals created a gun trust, identified family members who would be entitled to possession of trust firearms, and transferred their firearms to the trust.  Why?  So that family members need not be afraid of violating the law by sharing family firearms.  To make a long story short, the Colorado Senate modified the background check law passed by the Colorado House.  The Colorado Senate made exceptions including immediate family loans and gifts, gunsmiths, and loans for up to 72 hours.  In my opinion, a much less onerous law than originally thought.

Until 2013, I never drafted a firearm trust for “regular” firearms (Title I Firearms).  Firearm trusts were a creature of the NFA (Title II Firearms sold by a Class 3 dealer).  The NFA was enacted in the 1930s when the federal government did not think it could prohibit guys like Al Capone from owning full-auto firearms – Tommy Guns.  However, the federal government could tax the transfer of possession, strictly limit possession to the transferee, and require registration through a tax stamp.

The Biden Administration has floated the idea of not just taxing semi-automatic rifles like they do full autos, suppressors, short barreled rifles, and short barreled shotguns; but to have the semi-automatic rifles be subject to the entire NFA.  That would mean any transfer of possession, would require an application to the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE or ATF), the submission of fingerprint cards and photos, $200, and a year-long wait.  There would be no exceptions for a spouse, child, father, etc.  There would be no exception for a gunsmith.  There would be … no exceptions.  The penalty for violating the NFA is up to 10 years in federal prison and $250,000 in fines.

In a properly drafted gun trust, multiple individuals can share possession of the trust firearms.  Usually these are family members or members of the same household.  Individuals are already conveying firearms to their firearm trusts in anticipation of the anticipated law.  Many of the concerns in 2013 causing individuals to establish firearm trusts are concerns, today.  If you want to share your firearms with family members, a firearms trust may be in your future.