Editor’s Note: Matthew W. Thompson is a member of the Trusts and Estates and Trusts and Estates Litigation Practice Groups at Ward and Smith, P.A.
Last year, I received a call from an older friend. An avid sportsman, he was excited to make sure I knew North Carolina had passed gun legislation that, among other things, allows him to hunt with a silencer. For those who like to shoot, a silencer (or suppressor) can be a popular add-on to a gun because it cuts down on recoil and noise. My friend saw the change in the law as positive because it would save his shoulder and what was left of his hearing.
I reminded him, however, that his pursuit of a silencer still was regulated by federal law. The National Firearms Act of 1934 (“NFA”) governs the transfer and ownership of numerous types of firearms and accessories, including short-barrel shotguns and rifles, machine guns, silencers, and destructive devices such as bombs and grenades. The primary purpose of the NFA is to limit the circulation of certain firearms that generally are, or at least are perceived to be, associated with organized crime and terrorism.
In theory, the NFA does not prohibit ownership of the firearms and accessories subject to its rules. An individual who wants one of the covered weapons can make an application to the federal Bureau of Alcohol, Tobacco, Firearms and Explosives for approval of the purchase or transfer. The application must include a photo ID, fingerprints, and a certification letter from the local chief law enforcement officer – usually the county sheriff – that the intended purchaser or transferee will not use the firearm for other than lawful purposes and that the receipt or possession of the firearm or accessory would not place the transferee in violation of state or local law. A successful application typically takes several months to process and involves the payment of a $200 tax. Compliance with the purchase and transfer rules is critical, however, because participation in an unauthorized purchase or transfer can result in significant fines, jail time, and forfeiture of the firearm.
As a practical matter, it has become exceedingly difficult (if not impossible) for individuals to obtain NFA-regulated firearms because most local law enforcement officials are not willing to issue certification letters. They simply do not feel sufficiently informed (even on a case-by-case basis) to make the certifications that are required about the potential owner and that potential owner’s intended use of the weapon. As there is no process to compel the letter, individual ownership is thwarted.
The NFA, however, does not require a certification letter (or a photo ID and fingerprints, for that matter) if the applicant is a trust or corporation. Therefore, an individual who wants to own a silencer, for example, can form a trust, naming a Trustee (who can be the individual creating the trust); make the application in the name of the trust without additional documentation; complete the requisite background check for the Trustee; and expect to receive approval in a timely manner.
A well-drafted gun trust, however, can do more than knock down barriers to ownership and possession of an NFA-regulated firearm. It also can provide rules regarding transfer and use of firearms owned through the trust to prevent the Trustee from inadvertently violating the law. The trust terms also can provide a succession plan upon the Trustee’s death or incapacity. If appropriate, the trust may be able to hold the firearms for family use and avoid the difficult transfer procedures that the NFA otherwise would require to pass ownership to subsequent generations. A trust established to hold firearms ideally should own no other assets, and the terms should be tailored carefully to address gun-specific issues.
After my friend’s initial excitement regarding the change in the law, followed by his subsequent disappointment when he learned that he still would not be able to make a purchase at his local gun shop that day, we sat down and created terms for a trust that was appropriate for his situation. He then made the necessary application and received his silencer after a short wait. I am happy to say he enjoyed the rest of deer season from his stand, in peace and (relative) quiet.
© 2014, Ward and Smith, P.A.
Ward and Smith, P.A. provides a multi-specialty approach to the representation of technology companies and their officers, directors, employees, and investors. Matthew W. Thompson practices in the Trusts and Estates and Trusts and Estates Litigation Practice Groups where he focuses primarily on estate planning. Comments or questions may be sent to mwt@wardandsmith.com.
This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.
