An NFA Trust is used to own firearms listed under the National Firearms Act (NFA), 26 USC 5801 et seq.
short-barreled shotguns, short-barreled rifles, machine guns, silencers, destructive devices, and “any other weapon”.
An NFA trust simplifies the process of buying an NFA firearm in that a purchaser of an NFA firearm will avoid having to obtain the signoff of the chief law enforcement officer.
An NFA trust also avoids “accidental felonies,” such as where the registered owner of an NFA firearm leaves a firearm locked in a safe while he or she is away from the home and the unregistered spouse is left home with access to the gun safe.
A valid NFA trust must be properly formed under state trust law, have the proper provisions, have the proper transfer of NFA firearms in the trust, specify whether the beneficiary cannot use the firearm, and create a bank account from the grantor’s personal funds to purchase NFA firearms.
An NFA trust cannot have a “prohibited person,” 18 USC 922(d), as a trustee or beneficiary of the trust. The proper provisions for an NFA trust are notification to the trustee regarding what a prohibited person is and where this is defined, definition of what constitutes an accidental felony, definition of a Title II firearm, notification to the trustee of the conditions surrounding ownership and transfer of the firearms, the proper procedure for transferring firearms across state lines, when to withhold distribution to the beneficiaries, and when the trust will terminate.
If you already own a properly registered NFA firearm, you must have the transfer to the trust approved by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE), pay the transfer tax, and transfer the firearm to a Federal Firearms License (FFL) dealer first and then from the FFL dealer to the trust.
The penalty for owning and/or possessing an unregistered NFA firearm, even if it was originally registered to a trust that was later invalidated by the BATFE, is $250,000 and imprisonment of not more than 10 years.26 USC 5871.
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