A.  The ATF interprets “responsible person” under the new ATF 41F to include any person who currently enjoys the right to unsupervised use and possession of NFA firearms held by the gun trust.

I attended the 19th Annual National Firearms Law Seminar at the NRA Annual Meeting in Louisville, Kentucky, on May 20, 2016. An attorney for the NRA made a presentation regarding gun trusts and how the new regulation, ATF 41F, will operate based upon discussions with officials at the ATF. The NRA attorney confirmed to the audience of attorneys that any individual who currently enjoys the right to unsupervised use and possession of NFA firearms held by the gun trust—regardless of the individual’s actual title in the gun trust—is considered a “responsible person” under ATF 41F who must provide fingerprints and photographs for Form 1 and Form 4 applications filed on or after July 13, 2016. After the presentation, some of the gun trust attorneys in the audience were visibly upset.

B.  Other gun trust providers claim that that only trustees who are also settlors are “responsible persons.”

Some members of the gun trust community have misinterpreted the ATF’s definition of a “responsible person.” In their view, an individual associated with a gun trust is not a “responsible person” unless he or she possesses both: (1) the power to direct the management and policies of the gun trust; and (2) the power to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the gun trust. As a result of this incorrect interpretation, many gun trust providers have convinced themselves, and their clients, that only a settlor who is also serving as a trustee of a gun trust is a “responsible person.” However, the ATF has made it clear to the NRA that they expect to receive fingerprints and photographs from any individual who currently enjoys the right to unsupervised use and possession of NFA firearms held by the gun trust as a “responsible person” regardless of whether the person has the power to direct the management and policies of the trust.

C.  Other gun trust providers claim that “limited trustees” are not “responsible persons.”

Yet other gun trust providers have created gun trusts that include “limited trustees” that have the right to hold the NFA firearms, i.e. use and possess, but do not have other powers, such as the right to take or right to transfer the NFA firearms in the trust, under the mistaken belief that these so-called “limited trustees” would not be considered “responsible persons” by the ATF. However, since the “limited trustees” in these other gun trusts still have the ability to currently enjoy unsupervised use and possession of NFA firearms held by the gun trust, they are “responsible persons” who must submit photographs and fingerprints to the ATF with every new Form 1 and Form 4 application filed on or after July 13, 2016.

There are two problems with gun trusts naming a “limited trustee.” First, the purchasers of these gun trusts may have been told that anyone who is listed as a “limited trustee” is not considered a “responsible person” by the ATF. As a result, when they file ATF applications after ATF 41F goes into effect, they will do so under the mistaken belief that they do not need to disclose these “limited trustees” to the ATF and that these “limited trustees” do not need to comply with the new fingerprints, photographs, and CLEO notification requirements of ATF 41F. This could have serious consequences if the ATF ever discovers this failure to disclose.

The second problem with a “limited trustee” in these gun trusts is that it does not comply with Texas law. These so-called “limited trustees” are not trustees at all—at least not in Texas. Texas Trust Code section 112.008 unambiguously states that a “trustee must have the legal capacity to take, hold, and transfer the trust property.” A gun trust that expressly withholds any of these three rights from a trustee is not creating a valid trustee under Texas law. In other words, any time one of these so-called “limited trustees” has unsupervised use and possession of the NFA firearms owned by the gun trust, he or she is arguably committing a felony.

If you have a Texas gun trust that supposedly creates a sub-class of trustees with limited powers, we can help you amend and restate it to help protect you, your family, and your friends. If you are speaking with a gun trust provider, ask them whether their gun trust includes so-called “limited trustees.” If they do, you may very well want to look for your gun trust elsewhere.

Would you like to have the peace of mind that comes with knowing that you received a high-quality Texas NFA gun trust from a Texas attorney who is recommended by several of the largest and most successful Class 3 dealers in the United States? Let’s get started!

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