New ATF Rule 41 Will Affect Gun Trusts

April 8, 2016

The ATF released Rule 41F on January 4, 2016. Rule 41F amends firearms regulations regarding the making or transferring of NFA firearms.  It was specifically intended to address NFA firearms made or received by trusts or other legal entities. Rule 41F becomes effective July 13, 2016 and will affect subsequent transfers of NFA firearms. We want to make sure that you are aware of this new rule in the context of firearms trust planning.

You may be thinking, “Is my gun trust still good?” The answer is yes! Your purpose built gun trust remains the best way to enjoy firearms with others during life and pass them on. Rule 41F does not eliminate the ability to use your trust as an avenue to purchase, transfer, share and manage NFA firearms. It adds some definitions, procedures, and clarifies some issues.

One of the main features of Rule 41F is that it changes the definition of “person” and adds one for “responsible person.” Previously, the rules concerning submission of fingerprints and photographs did not apply to trusts. Rule 41F places trusts and other entities on equal footing with individual applicants so that the same documentation is required for NFA firearms transfers as is required for an individual. For any new NFA applications following July 13, 2016, you, as the grantor and trustee of the trust and all other current trustees must provide fingerprints and a photograph to the ATF. In addition, each responsible person must undergo a background check with each application to purchase an NFA firearm. Rule 41F does not require you to update the NFA branch of changes in responsible persons. Rather, its effect on trusts is limited to the time of filing an application.

Also be aware that Rule 41 deletes the chief law enforcement officer (“CLEO”) certification for individuals, but adds a notification requirement for both individuals and entities. All responsible persons must be disclosed to the CLEO of the jurisdiction where the firearm will be principally kept upon submitting an application to ATF.

Failure to address the new issues raised by Rule 41F may expose owners of firearms trusts to the risk of committing a new kind of accidental felony related to failure to document a responsible person. If you would like to set up a consultation to further discuss how Rule 41F affects you, to ensure you remain in compliance with the law in the future, and to determine whether any changes need to be made to your gun trust, give us a call at (501) 609-9800.  

More information can be found in a terrific article written by C. Dennis Brislaw, JD, and Matthew T. McClintock, JD at https://www.wealthcounsel.com/articles/2016/the-impact-of-batf-rule-41f-on-firearms-trusts .

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