Dogulas A. Turner, Esq.

Automatically sealing Colorado criminal record sounds like a good thing, right? It can be if the disposition of “charges not filed” is entered as the disposition. A Colorado arrest is sealed because charges were never filed, but the disposition of “charges not filed” isn’t automatically entered as the formal disposition. Without this critical phrase, there can be significant issues years later.

NFA Applications Being Denied

To understand the critical nature of the problem requires some background information. This issue came to our attention in the context of firearm trusts. The primary purpose of a firearm trust is to hold items requiring permission from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE or ATF) to own. These are called NFA items because they are regulated by the National Firearms Act. The most common NFA item is a suppressor. As part of the permission process, a background check is run by the Federal Bureau of Investigation (FBI – https://www.fbi.gov/). Recently, the FBI has been denying NFA applications because the criminal record is missing specific information.

We help our firearm trust clients provide the missing information. We obtain the Colorado Bureau of Investigation (CBI – https://cbi.colorado.gov/) criminal history and see charges with no disposition. A disposition is like the conclusion of a story. The sequence involves three Colorado agencies: The arresting agency (police or sheriff), the prosecuting agency (City Attorney/District/County Attorney), and the court. Sometimes, there is an arrest and then the prosecutor decides not to file charges. Or there is a court disposition but that disposition did not make it into the CBI system.

Problem Goes Beyond NFA Trust Issues

The problem goes way beyond buying a firearm. For example, this can cause problems entering another country, passing a background check in another state, or getting a security clearance. Although the record is sealed, any law enforcement agency can see the sealed record even though the general public cannot. For the most part, this is not a problem at the Colorado level. Many if not all of these individuals could pass a CBI background check because Colorado agencies understand the Colorado system.

We get involved in cleaning up and linking up the CBI criminal records so the FBI and other law enforcement agencies can see the disposition, provide a conclusion to the story, and the firearm trust client can get permission to own the NFA item. It is a tedious, time-consuming process. Sometimes it is a few hours on the phone with the police, court, or CBI. At other times it involves physically retrieving the records and getting letters from agencies. However, if the records are destroyed, getting a disposition entered or a disposition of “charges not filed” is very difficult. With many municipalities, the records are destroyed in as little as three years.

Automatic Sealing Doesn’t Include Entry of A Disposition

With all this as a background, let’s turn to automatically sealing arrest records. The situation is an arrest occurs and charges not filed. A year goes by, and Colorado automatically seals the record without entering a formal disposition. Public can’t see it. Arrested individual can’t see it. Law enforcement and related agencies still see it.

More years pass and the arresting agency destroys the records. Then, the arrested individual gets a background check in another state, the background check is through the FBI, or the individual tries to enter Canada. There is no disposition in the record, and according to this other jurisdiction’s rules there must be a conclusion to the story. Without a disposition, you are stuck, and we probably cannot fix it because the records are destroyed.

The arrested individual has no idea there is a problem because the record is automatically sealed. Automatic sealing sounds like the conclusion to the story, right? Wrong. The individual may pass background checks in Colorado, other states, or at the FBI level. The problem is a rule was changed. This is the exact situation our NFA trust clients face. Many of them never had an issue applying for an NFA item in the past. Today, they do because somebody changed a rule.

Make Sure A Disposition Is Entered

The conclusion to this story? The conclusion to this story is to get the conclusion to your story “charges not filed” entered into the CBI record as the disposition. Those are magic words. Anything short of the magic words is insufficient.

Question: I have a quick question for you related to my trust and the upcoming effective date related to 27 CFR Parts 478 & 479 related to the stabilizing braces. In the link that you sent related to the topic in the Q/A section it refers to evidence that the trust possessed the firearm prior to the date the final rule is published. The evidence includes the signed, dated, and notarized terms of the trust or trust schedules. My question for you is related to the trust schedules. Am I supposed to send updated schedules to the ATF when I add items, NFA and Non-NFA (magazines for example), or am I allowed to keep these records on hand and provide if necessary?

Answer: You do not need to notify the ATF whenever you add non-NFA items to your Colorado firearms trust. We do not recommend transferring large capacity magazines to your Colorado firearms trust. “Large capacity” is more than 15 rounds.

Regarding adding NFA items to your firearms trust, by default, you notify the ATF whenever an NFA item is added to the trust. Transferring an NFA item to the trust requires an approved ATF Form 1 or Form 4 depending on the situation.

Regarding evidence that the trust possessed the braced pistol prior to the effective date of the final rule, the ATF will require more than the trust execution date. ATF will want to see clear and convincing proof that the braced pistol was transferred to the trust prior to the final rule effective date. Our trust does not include schedules (like a Schedule A) specifically so that your trust property remains private and is not disclosed every time you submit an ATF Form 1 or Form 4. We use an assignment sheet/page with two witnesses. You have copies of the assignment sheet in your trust notebook. If you properly filled out and dated an assignment sheet prior to the final rule effective date and had the assignment sheet properly witnessed prior to the final rule effective date, the ATF should accept that as clear and convincing proof. Another (more conservative) option is to get sworn statements from your witnesses, acknowledged by a notary, and include those sworn statements along with the assignment sheet. The sworn witness statements should state that the witnesses, witnessed your signature on the date stated on your assignment sheet. Please keep in mind that a false sworn statement submitted to the ATF can result in substantial criminal penalties.

2021R-08F and Trusts

Colorado Firearm Background Check Requirement For Trusts

1. There is an open question regarding whether a settlor of a revocable trust must comply with the Colorado background check statute (18-12-112) when assigning the settlor’s existing firearms to the settlor’s revocable trust. Personally, I think it is silly to take that position. However, we have no guidance from the state attorney general, no case law on the subject, and the statute specifically mentions transfers to trusts. Therefore, the conservative approach is to comply with the statute — if you can.  Word from clients is they have a hard time finding an FFL who will run a background check on an individual in their capacity as trustee.

2. The required background check is an ATF Form 4473 background check submitted by an FFL (Federal Firearms Licensed dealer) to CBI as if it was a sale. As part of the process, CBI transmits to the dealer approval of the transfer. It is more than just a background check by CBI. You cannot go directly to CBI and get the required background check because the check is specific to the firearm(s) being assigned to the trust. You must go through an FFL using Form 4473.

3. More than 1 firearm can be listed on a single Form 4473. There are additional blanks on the form. The instructions explain how to run a check on more guns than blanks on the form.  (Instructions Section A, Questions 1-6).

4. The dealer will charge for the background check. For example, $50 for the first gun and $25 for each additional gun. The statute says the fee cannot exceed $10. Not sure the dealers care because they can decide it is not worth their time.

5. I am told that many firearms dealers will not run a background check on a settlor assigning the settlor’s gun(s) to a revocable trust. His consultant told him not to because it could throw up a red flag. I have heard of others that will run the check. The point is, the FFL is not required to help.

6. Co-trustees do need a 4473 background check. The co-trustee should get the Form 4473 background check before the settlor’s firearms are assigned to the trust. The assignment must occur within 30 calendar days of approval by CBI.

7. Form 4473 is set up for individuals. While trusts are not specifically mentioned in the instructions, we use the instructions for a corporation, company, association, partnership, or other such business entity. On the back of Form 4473, Section B, 2nd paragraph. This is when the Sworn Statement for Primary Trustee is used. While it has gotten better since 2013, an FFL left to his/her own without instruction will possibly run the check incorrectly (as if for an individual and not wanting to include the Sworn Statement as part of the record). For that reason, we advise to sign Form 4473 “Your Name, Trustee”.

8. Get a copy of the approval specific to the gun. This has traditionally been a problem area. FFLs are not used to giving that information to the customer. FFLs are very wary of doing something they do not ordinarily do for fear of losing their license. If nothing else, take a picture of the approval with your phone.

Transferring Non-NFA Firearms to Your Gun Trust Q & A

Question:  I am working on transferring my non-NFA firearms into my trust. After talking with our Colorado firearms dealer, they believed that all that is needed to move my existing non-NFA firearms into my trust is to do a “private party transfer” to transfer the firearms from us to our trust. Would this be the proper procedure for non-NFA firearms?

Answer:  Generally speaking, yes.  Use the assignment sheet/form that came with your trust to make the assignment.  To the extent you can, keep a record of the Form 4473 background check and approval even if just taking a picture with your phone.

Question:  Any future non-NFA firearms that are purchased, I assume I can purchase these directly into the trust by utilizing the gun trust bank account associated with the trust, correct? For the background checks on any new non-NFA firearms, is the name of the trust used, or would the background check have to be completed for the trust’s trustee and co-trustee?

Answer:  Yes, future Colorado firearm purchases can be made directly into the trust.  However, ATF Form 4473 is not set up for entities/trusts.  When filling out ATF Form 4473, you would fill it out in your individual name then sign “Your Name, Trustee”.  You would use/submit the ATF sworn statement we provided along with the properly completed ATF Form 4473.  The ATF sworn statement follows the instructions on the back of Form 4473 for when acquiring a firearm on behalf of “or other such business entity”.  See ATF Form 4473 Instructions, Section B, Paragraph 2.  The conservative approach is to have all current, co-trustees go through the ATF Form 4473 background check process for each firearm purchased by the trust.