Trying to Think Straight About 41F: Who is a “Responsible Person”?

After stewing over ATF 41F for a few days, the rule is finally starting to make sense to me, at least the definition of the so-called “responsible person” in a gun trust. Of course, it has always been obvious that a Grantor/Trustee of a gun trust is a “responsible person” or RP. However, it seems that co-trustees, special trustees, and beneficiaries of  most any stripe in a well-drafted gun trust might avoid shouldering the burdens of an RP–if they satisfy the conditions in two different rules or sentences in newly amended § 479.11. Here’s the relevant text of that section:

§479.11 Meaning of terms.

* * *

Person. A partnership, company, association, trust, corporation, including each responsible person associated with such an entity; an estate; or an individual.

* * *

Responsible person. 1.) In the case of an unlicensed entity, including any trust, partnership, association, company (including any Limited Liability Company (LLC)), or corporation, any individual who possesses, directly or indirectly, the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity. 2.) In the case of a trust, those persons with the power or authority to direct the management and policies of the trust include any person who has the capability to exercise such power and possesses, directly or indirectly, the power or authority under any trust instrument, or under State law, to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust. Examples of who may be considered a responsible person include settlors/grantors, trustees, partners, members, officers, directors, board members, or owners. An example of who may be excluded from this definition of responsible person is the beneficiary of a trust, if the beneficiary does not have the capability to exercise the powers or authorities enumerated in this section. (emphasis and numbers supplied, except in the section heading)

Slide1

The first rule of the road to freedom from the burdens of a “responsible person” is stated the first sentence in the paragraph labeled “responsible person.” The second rule is in the second sentence of the same paragraph.

Each rule is slightly, but importantly, different from the other. The first rule has one “and” in it. The second has two. Thus, the first rule has two “get out of jail free cards,” the second has three. Cotrustees and beneficiaries must satisfy both rules before they’re free of the “responsible person” burdens imposed by ATF 41F.

Based on all of this, I’m thinking I would analyze the provisions of a trust governing co-trustees or beneficiaries essentially following the logic of these diagrams (click to enlarge), beginning with Rule 1 and then Rule 2, making sure the powers and authorities of each cotrustee, special trustee, or beneficiary are limited in the trust document, so those persons don’t fit within the definition of a “responsible person.” (By the way, it seems that the words “direct” and “possesses” in the rules are particularly important, so I’ve bolded them in the diagrams.)Slide2

What kept bothering me as I initially read the rules and the commentary was that the commentary seemed at times to contradict or modify the actual rules. That confusion was at least in part due to my thinking that there was only one rule in the “responsible person” paragraph in §479.11. Once I finally settled on the idea that there were two different rules or sets of conditions in that paragraph, things started to make a little more sense.

Things made even more sense after I diagramed the two rules or sets of conditions and compared my diagrams to the wording in each part of the commentary that used the actual wording of the rules or paraphrased them in some way. Basically, I asked in each case, did the wording on a particular page of commentary make sense in light of either or both rules or sets of conditions?

What I discovered by doing that is that words in the commentary that at first seemed to be all over the map and had seemed to contradict or confuse the wording in the “responsible person” paragraph in §479.11, suddenly made more sense.

I stress that this is not my final thinking on the subject, and I’m open to correction. More importantly, what I’ve done above doesn’t begin to touch on what some of the words mean in the rule. We need to understand the meaning of words such as “direct,” “management,” “policies,” “possess,” “transfer,” “directly or indirectly,” “capability,” before 41F makes complete sense.

Fun times.

 

 

ATF 41F: There’s a Horse in Here Somewhere, but I Haven’t Found It!

Having read the relevant parts of the 41F document released Monday, December 4th, here are some of my thoughts.

First, the actual rule:

479.11 Meaning of terms.

* * *

Person. A partnership, company, association, trust, corporation, including each responsible person associated with such an entity; an estate; or an individual.

* * *

Responsible person. 1.) In the case of an unlicensed entity, including any trust, partnership, association, company (including any Limited Liability Company (LLC)), or corporation, any individual who possesses, directly or indirectly, the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity. 2.) In the case of a trust, those persons with the power or authority to direct the management and policies of the trust include any person who has the capability to exercise such power and possesses, directly or indirectly, the power or authority under any trust instrument, or under State law, to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust. Examples of who may be considered a responsible person include settlors/grantors, trustees, partners, members, officers, directors, board members, or owners. An example of who may be excluded from this definition of responsible person is the beneficiary of a trust, if the beneficiary does not have the capability to exercise the powers or authorities enumerated in this section. (emphasis and numbers supplied, except in the section heading, here and below)

Okay, now, let’s see if I’ve got this straight:

Under § 479.11, “in the case of an unlicensed entity, including any trust, partnership, association [etc],” I am a “responsible person” if I “possess, directly or indirectly, the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity.”

Correct so far?

But what about the next sentence? There I learn that “in the case of a trust, those persons with the power or authority to direct the management and policies of the trust [meaning “those persons” referred to in the first sentence, I assume] include any person who has the capability to exercise such power [which power? well, it must be “the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity,” as explained in the first sentence] and possesses, directly or indirectly, the power or authority under any trust instrument, or under State law, to receive, possess, ship, [etc. etc.] for, or on behalf of, the trust.”

Do you see the problem? It seems to me that the second sentence in the definition of a “responsible person” essentially states the “receive, possess, ship, transport” language twice, the first time by implication, that is, by referring back to the first sentence via the words “such power.” It states the “receive, possess, ship” language explicitly the second time, but adds the critical word “and” before the word “possesses.”

Am I missing something here? If not, then my question is: Does the second sentence stand apart and alone from the first sentence, or does the second sentence refine and narrow the first sentence? In other words, with regard to trusts, is “responsible person” defined one way or two different ways in § 479.11?

In the alternative, maybe the words “such power” in the second sentence refer back only to the words “power or authority to direct the management and policies of the trust” a few words back in the same sentence. That reading makes more sense, but even so, I’m left wondering whether the rule has one or two definitions of “responsible person” for trusts.

On a separate note, someone today was touting the importance of the word “and” before the word “possesses” in the second sentence. There are really two important “ands” in the definition: the one before “possesses” and the one between “management and policies.” Thus, for example, if the trust instrument explicitly granted a co-trustee the power or authority to direct the management but withheld the power or authority to direct the policies of the trust, arguably, that co-trustee wouldn’t be a responsible person, would s/he?

And finally, what does the word “capability” mean in the context of “such power” and how important is the word “direct”? (Very important, I would argue.)

Oh, and one more: did anyone notice the plurals “powers or authorities” in the beneficiary example at the end of the definition of “responsible person”? It’s the only use of those plurals in the entire document.

Of course, all this may be beside the point, given how often and how poorly paraphrased the definition of “responsible person” is used throughout the 248 page document. Take a look at pages 4, 32, 105, 114, 118-119, 124-125, 137, 145-146, and 209-210. On one page, the paraphrase/explanation seems to clarify who qualifies as a “responsible person.” On the next, clarity takes a holiday.

For example, consider pages 118-119 of the commentary (emphasis all mine):

First the commentary tells us that “the definition of ‘responsible person’ in this final rule applies to those who possess the power or authority to direct the management and policies of an entity insofar as they pertain to firearms.” (Note that the bolded words do not appear in the actual rule. The concern seems to be with management and policies.)

Then the goal posts shift to “[in trusts] those possessing trust property—trustees—are also the individuals who possess power and authority to direct the management and policies of the trust insofar as they pertain to trust property, including firearms.” (Note here, the additional underlined words, also not part of the actual rule. Also note that we’re now talking about “possessing trust property” and “management and policies.”

Then the goal posts move again—it appears to me, at least—when the commentary “clarifies” that the rule doesn’t apply to “individuals who would not, or could not, possess the firearms.” (Note the absence of the “management and policies” element. Possession of firearms seems key.)

Finally, those damn goal posts move to another end zone, when the commentary informs us that “beneficiaries and other individuals may be considered “responsible persons [if they have the] capacity to control the management or disposition of a relevant firearm on behalf of a trust or legal entity.” (Note that the word dispose appears in the actual rule; however, the combination management or disposition appears just once in the entire document—and you’re reading it. By the way, among the various meanings of “dispose” or “dispose of,” at least one is apt to the rule: “to transfer to the control of another.”)

My concern is that the seemingly constant insertion of new or different words into the “responsible person” equation makes it very difficult if not impossible to determine the proper course of action.

To be fair, as I read and re-read the rule and commentary, things seem clearer. That said, as I read and re-read the picture sometimes becomes muddier. For the moment, all I can think is, What a confusing mess.

Don’t go too far away campers. More to come.

ATF 41P Becomes 41F: And the final answer is . . . .

So Attorney General Loretta Lynch put her pen to paper yesterday, and the ATF’s proposed rule 41P became its final rule 41F–with modifications. Here’s my first take: There’s best news, good news, and bad news. 

The best news is two-fold: 1. the final rule does not become effective until 180 days after its publication in the Federal Register, and 2. the final rule eliminates the need for your local CLEO’s signature, though it does require notification of the CLEO.

The good news is that your existing NFA gun trust remains an effective tool for managing and sharing your NFA arms, especially for the next 180 days, but even after that–assuming it’s drafted properly. Given that the effective date is at least 180 days off, you should be able to purchase and handle your NFA firearms as you have in the past–assuming, of course, that you’ve done that legally–for at least the next six months.

The bad news is that the new rule, besides eliminating the CLEO signature requirement, also introduces a new definition– “responsible person” –into the mix. Persons in a trust and other legal entities (LLCs etc.) who meet the definition of a “responsible person” will need to undergo a background check, including providing fingerprints and photo, whenever they purchase or transfer an NFA item, much like individuals do now.

The term “responsible person” very clearly includes the Grantor/Trustee. It somewhat less clearly does not include many or most beneficiaries. Thus, if you’re the grantor and trustee of your NFA trust, you will clearly be a “responsible person” when the rule becomes effective; your beneficiaries will probably not.

As for persons you may appoint as co-trustees, for the moment, they occupy a grey area–again, when the rule becomes effective. The rule itself seems quite clear, but much of the ATF commentary that accompanies the rule muddies the water (the rule and commentary run 248 pages, only 10 of which are part of the actual rule). I want to study the document and resulting issues more thoroughly before I give my final answer on the “muddier” questions.

So consider this a heads up. I’ll keep you informed as things and my thinking develop. But to repeat: the effective date of the rule is at least 180 days out, so those with an existing NFA trust have plenty of time to adjust things if needed.

 

Whither ATF 41P? Whither NFA Gun Trusts?

In a post back in September 29th of this year, I wrote about the reluctant Chief Law Enforcement Officer or CLEO problem or obstacle that many hopeful purchasers of NFA firearms encounter when they try to buy a suppressor, short barreled shotgun, or other such that are legal in many, if not most, states. What problem you ask? The problem that in order for individuals to purchase such items, they must submit their photograph, fingerprints, and signed certificate from the local CLEO, certifying that he or she has “no information indicating that the receipt of the firearm would place the transferee [the individual] in violation of State or local law or that the transferee will use the firearm for other than lawful purposes” (CFR §479.85).

IMGP2792Not surprisingly, some CLEOS balked at signing their professional and political life away. Others refused to do so simply because they didn’t like the idea of their citizens owning such firearms. Whatever the reason, the buck stopped there. No signature, no firearm, no recourse (see questions N16 and N17, page 201 of the 2014 version of the ATF Federal Firearms Regulations Reference Guide).

And thus the gun trust. You see, the same laws, rules, and regulations that mandate the CLEO signature for an individual application, specifically provide that the same weapons can be purchased by various entities, including companies, partnerships, associations, estates, and trusts. And no CLEO signature is required when an entity rather than an individual makes the purchase. But that may change–as early as  some time in January 2016.

On Monday, September 9, 2013, the AFT proposed amending 27 CFR Part 479 to, among other things, require so-called “‘responsible persons’ of [legal entities, including trusts] to submit . . . photographs and fingerprints, as well as a law enforcement certificate” signed by a CLEO–just like individuals currently have to do. The proposal, referred to by its docket number ATF 41P, was greeted with, shall we say, a great lack of enthusiasm. In fact, the response was so overwhelming and so negative that the AFT has yet to finalize the rule. Just a few days ago, the ATF was saying that the final rule would be out by the end of December 2015. The DOJ has now changed that date to “01/00/2016.” No, I don’t know when “00” is either.

What will the final rule look like? Did the ATF pay any attention to the many well-argued comments that the rule change was not needed, that those who proposed the change had a poor understanding of trust law, that etc. etc. etc.? We’ll see in a month or so. In the meantime, I’d argue, get while the gettin’s good. If and until the rule changes, well-drafted trusts continue to be the best way to buy NFA firearms and suppressors because trustees don’t have to provide photos, fingerprints, or certificates with the local CLEO’s John Hancock. Furthermore, I’d argue that trusts are the best way–or at least a way you should consider–to own all firearms because of the protections built into well-designed gun trusts that protect grantors, trustees, and beneficiaries from committing the so-called “accidental felony.”

 

 

 

Not Everything or Everyone has to, or will, Blend in a Blended Family

To those couples who’ve decided to blend their families and to those who already have, know this: Just because the two of you fell in love, doesn’t mean your children are going to fall in love with each other or with your new spouse. While you wait for that to happen–if it ever happens–shoot for like, for tolerate. Pray that they’ll be kind to one another. But don’t insist that your children–the children who’ve already suffered through the divorce or death that turned you into a single person–don’t insist that they love one1805-Gillray-Harmony-before-Matrimony.2 another, not right now. Love, even like, takes time.

So hope, pray, and work to the end that they will at least tolerate and be kind to one another.

And then do your best, your very best, to model for them the way they should treat each other. You do this by treating your new spouse–the new love of your life–the way you hope they–the newly blended children–will treat each other. Then be patient because becoming friends, especially when each child is struggling to fence off his or her space in a new family, is not easy.

Yes, be patient. You are the adults after all.

Hard Questions Make Strong Foundations: Estate Planning and Second Marriages

The day my wife and I finally met with our estate planning attorney, Don Owen, was anticlimactic. We sat across from him, my wife Janet to my left, Don sitting on the other side of his desk. We were there to resolve what we then realized were thornier issues than what we had imagined when we began the process, issues that most families don’t face–because most families aren’t blended families.

Very wealthy couples deal with estate planning issues most of us can only imagine. Business owners whose companies make up the bulk of their net worth likewise confront estate planning problems foreign to those who work for someone else. Add to that list, couples who head up blended families. In fact, maybe put them at the top of the list. Courageous, often twitterpated, souls, these couples enter into second marriages and all the responsibilities that entails and deal with some thorny problems. Often, many of those problems first make their appearance years down the road. For my wife and me, they made their appearance when we decided to do some estate planning six years after we married and joined my three and her four children together.

The idea to do some estate planning was mine. I stood to inherit some money from my grandfather’s estate. He’d worked hard and invested well, and he’d set up his estate to benefit his children first, then his grandchildren when his children died. His children were now in their late 80s and 90s. I wanted to make sure that when they died, and after both my wife and I died, my share of my grandfather’s estate would pass on to my children–his great-great grandchildren. I wanted to keep the Taggart family money in the Taggart family. My wife was fine with that. And so I set up an appointment with DonHermanWeissFamily600 to get that done. This should be easy, I thought. Silly me.

Facing the Facts. For couples in second marriages, estate planning can be difficult, more complex. Think about it: Each party comes into the marriage with their own assets; their own debts; and often, their own children–sons and daughters who have their own special needs, often known only to their biological parent. Add an “ours” to the mix of yours and mine, and the family photo quickly goes out of focus.

Frequently, at least one but probably both of the step-parents have made promises to their own children, promises that often involve dollars and cents. Maybe one parent made a promise to pay for college or for a car when his child graduates high school. Maybe the other guaranteed a trip to Europe if her  young son or daughter graduated college.

All too often such promises were made in the heat of the battle in the previous marriage. No matter, already feeling guilty about a failed marriage, the parent making the promise will not drop this ball. Not this time. His or her promises, wise or unwise, will be kept. No more disappointed children. Nope.

And so it is when the newly married couple finally decides they should do some estate planning. So it was when my wife and I  sat down with Don Owen to make sure that promises we had made were kept–to each other and to our children.

Like I said, the experience was more intimate than sex.

Why? you ask. Well, try this list of issues on for  size. One or both of us had:

  1. Made promises to our children.
  2. Made promises to each other leading up to marriage.
  3. Insecurities created or exacerbated by the previous marriage and not yet fully healed by the second.
  4. Secrets that had yet to be discussed with the the other.
  5. Allegiances that were at the time stronger to blood than to water.
  6. More insecurities, as in, will this marriage last?
  7. Age, maturity, and wisdom not present the first time around, thus a willingness and ability–and need–to look beyond the unicorns of true love and ask the hard questions.
  8. Etc.

Now this list isn’t particular to my wife and me. I suspect most anyone in a second marriage can see at least some of themselves in it. The point is, parents in blended families face lots of issues that in-tact families typically don’t. But that’s only part of the story, the hard part. But can I tell you, what I had anticipated would be a cake walk–at least I did after my wife said she was fine with what I wanted to do with my inheritance from my grandfather–turned out to be a slog. Not because my wife was hard to deal with. She wasn’t. In fact, she was a gem. No, it was a slog because the issues grew more complicated the deeper we probed, one question leading to another and then another. When we got to the end of the slog, I was amazed, both at what an experience it had been and at how refreshing it was to have done it.

Reaping the Benefits. It gets better. If the planning is hard and the issues complex, the aftermath is long lasting and satisfying. With each hard question asked and answered, a stronger bond forms between husband and wife. As each secret is revealed, trust and respect grows. In the end, the new marriage stands on a more firm foundation. I know ours did.

I don’t have any statistics to support the following claim, but I have to believe that good, thorough estate planning will strengthen the marriage of the man and woman who blend their families. It did ours. It can do the same to yours.

 

 

 

 

 

Decanting is Not Just for Wine: “Revoking” an Irrevocable Trust

My how things have changed, or at least, how my understanding of things have changed. I graduated from law school in 1980 thinking that irrevocable meant just that. Once a trust became irrevocable–generally upon the death of the settlor–its terms turned to stone, fixed and barely movable. The only way to turn that stone back into something more malleable was a cumbersome process in which the trustee needed to secure the agreement of all the beneficiaries and then the court, before implementing any change to the trust. Again, that was my understanding at the time. I’m guessing it might be yours as well.

If trust law was ever that way in the past, it is certainly not that way today. The Uniform Trust Code (UTC) and various state “decanting” statutes have insured that. The UTC, implemented by a number of states, including both Wyoming and Utah, allows for judicial modification of trusts in a variety of circumstances, including “modification to achieve settlor’s tax objectives” and “modification or termination because of unanticipated circumstances.” But for our purposes here, I’m more interested in decanting, a process for modifying a trust somewhat analogous to decanting wine.

decanting

With wine, decanting involves pouring wine from one container to another in order to separate the wine from any sediment in the bottle, sediment that can ruin the taste. The process also infuses the wine with oxygen as the liquid passes from one container to another. Apparently–I don’t drink–pouring old wine into new bottles can improve the drinking experience.

With trusts, decanting involves “pouring” the old, irrevocable trust into a newer, more flexible trust, a trust better fitted to the needs of the parties to the trust at the time of the decanting. Maybe the decanting will result in the trustee having more flexible powers to better administer the trust. Maybe it will lead to better state and federal tax benefits. Maybe asset protection is the goal. For these reasons and more, trustees (often encouraged by beneficiaries) are looking to decanting as a way to deal with circumstances and issues unforeseen by the settlor of the original trust.

Decanting is not a new idea. Some argue that it has been allowed under the common law for a long time–at least since 1940–on the theory that if a trustee has discretionary authority to make distributions to a beneficiary from a trust, that trustee also has authority to make distributions in “further trust,” that is, into a new trust. But common law can be finicky and is subject to the whims of the local judiciary, so it’s with some relief that at least 22 states have enacted decanting statutes, codifying what was once only in the casebooks.

Wyoming’s decanting statute (Utah doesn’t have one), enacted in 2013, is short but illustrative:

§ 4-10-816. Specific powers of trustee 

(a) Without limiting the authority conferred by W.S. 4-10-815, [a statute that essentially frees the trustee from court supervision] a trustee may:

. . .

(xxviii) On distribution of trust income or principal pursuant to authority in the trust instrument to make discretionary distributions to a trust beneficiary, whether or not the discretionary distributions are pursuant to an ascertainable standard, make distributions of all or any portion of trust income or principal in further trust. (emphasis supplied)

Notice that there’s no mention of court supervision. No, this is a specific power granted trustees by statute, so the trustee can act on his or her own. That’s not to say that the court should never be involved. In fact, if the new trust contains provisions that might raise the hackles of one or more beneficiaries, the trustee would be wise to seek the court’s  blessing.

Now there are limitations to decanting, and it’s not something to do willy nilly. That said, if you’re a trustee or beneficiary of an irrevocable trust and if the old trust creaks and sways under the weight of today’s needs and demands, maybe it’s worth looking at decanting as a way to resolve those issues.

Have a Question About Firearms Law?

The Bureau of Alcohol, Tobacco, Firearms and Explosives’s website in general and library in particular is a treasure trove of information on firearms laws and regulations, much of it downloadable in PDF format. I’ve found the publications on this page quite helpful, especially

the Federal Firearms Regulations Reference Guide,

the Federal Firearms Licensee Quick Reference and Best Practices Guide,

the Best Practices: Transfers of Firearms by Private Sellers, and

the ATF National Firearms Act Handbook.

The first three are updated occasionally, so check the revision date. The first one is revised annually. The last link, to the AFT National Firearms Act Handbook, is not to a PDF but to webpage because it’s updated regularly.  In any case, all of these and more on the AFT’s site a excellent. Enjoy.

Shut Up! He Explained

The following has nothing to do with estate or business planning. I simply thought you’d enjoy these two videos. I used to show them to my legal writing class as an introduction to the Bill of Rights in general and the 4th and 5th Amendments in particular. They always enjoyed them. I think you will too. And you’ll learn something.

First, the attorney, a Mr. James Duane, professor of law at Regent Law School.

Now the police officer, George Bruch, responds:

 

Are CLEOs Shirking Their Duty?

So I’ve been reading the ATF Federal Firearms Regulations Reference Guide 2014, the most current version as of March 7, 2015so you don’t have to. It’s actually an interesting read if you’re into statutes, rules, regulations, and such. Try it.  You may have a knack for deciphering dense, jargon-laden language. But if not . . . at least skip to the Questions and Answers section that begins on page 191 for a more accessible rendition of much of the law and in a format that won’t drive you to wherever you go when you don’t drink.

If you’re like me, you’ll find interesting the answers to two questions on page 210, both of which fall under Section N of the Q&A: National Firearms Act (NFA). Now as everybody who’s anybody who’s at all interested in so-called NFA firearms knows, purchasing such arms comes with its own entry among Dante’s circles of hell [insert image of such circles here to catch the already weary reader’s eye]:

circles-of-hell-in-dantes-inferno_50291c3324df2_w1500

This particular circle floats somewhere between Limbo and Anger, though more than one AFA firearms aficionado swears he has seen the circle hovering around Violence.

There’s a reason for this. You see, NFA firearms are a special category of six firearms or weapons that comes with its own extra set of federal rules buyers must abide before they can get their hands on their new NFA firearm–that is, if their states’ law doesn’t ban them altogether. In brief, NFA firearms include 1.) machine guns, 2.) short-barreled shotguns, 3.) short-barreled rifles, 4.) silencers or suppressors, 5.) destructive devices, and 6.) “any other weapon[s],” an odd little category that really doesn’t include just “any other weapon,” but that’s a post for another time (see USC §5845 (a)).

Now, suppose you walk into your local gun shop to buy a short-barrreled rifle as an individual. The National Firearms Act or NFA is pretty explicit. There are taxes to be paid (the seller pays, but your pocketbook takes the actual hit), stamps to be affixed, fingerprints and photos to be taken (guess whose?), firearms to be identified, CLEO signatures to be secured, and finally, approval of the Secretary of the Treasury to be had. Yup, the NFA falls under the authority of the IRS. But that’s not the worst of your problems. No, your problem begins much closer to home.  With the Chief Law Enforcement Officer or CLEO in the jurisdiction where you live.

You see, because you chose to buy as an individual, the local CLEO has to decide whether to sign off on your application, certifying that s/he is

satisfied that the fingerprints and photograph accompanying the application are those of the applicant and that the certifying official has no information indicating that the receipt or possession of the firearm would place the transferee in violation of State or local law or that the transferee will use the firearm for other than lawful purposes. (CFR §479.85)

Read that again. Now, think about what you just read. Would you certify to all that? For someone you didn’t really know, who’s application just showed up in the mail? I probably wouldn’t. And I’m not alone. Apparently, many CLEOs are passing up the opportunity to put their butt on that dotted line as well.

Kind of takes the huff and the puff out of “Who does s/he think s/he is, anyway?” doesn’t it? Yes, I get the frustration of the prospective NFA firearms owner. But having read that little snippet from the Code of Federal Regulations (CFR), I get the reluctance of the CLEOs who don’t want to bet their career on the application of every John Doe and Jane Smith that lands on their desktops. Circle of Hell doesn’t begin to describe the firestorm that would ensue should that brand new certificated NFA firearm owner use that new NFA firearm to commemorate Columbine.

But surely the CLEO must sign eventually, right? You’re a taxpayer, by cracky! And you pay their salary!! There ought to be a law!!!

Check your outrage. There apparently isn’t a law. Let’s go back to those two questions and answers on page 210 of the AFT Federal Firearms Regulations Reference Guide:

(N16) Is the chief law enforcement officer required to sign the law enforcement certification on an ATF Form 1 or ATF Form 4?

No. Federal law does not compel any official to sign the law enforcement certification. However, ATF will not approve an application to make or transfer a firearm on ATF Forms 1 or 4 unless the law enforcement certification is completed by an acceptable law enforcement official who has signed the certification in the space indicated on the form.

(N17) If the chief law enforcement official whose jurisdiction includes the proposed transferee’s residence refuses to sign the law enforcement certification, will the signature of an official in another jurisdiction be acceptable?

No.

“No.” Can’t get much more blunt than that. Though I guess it depends on what the meaning of “no” is. (As an aside, if I were doing Q&As for the federal government, I would have written, “Sorry Charlie, better luck next time. May the Force be with you. Or some such.)

For the “individual,” there’s no joy if Mudville’s CLEO decides s/he doesn’t want to sign the certification. Unless . . . Unless the “individual” takes advantage of another provision in the CFR, a provision that has implications for who can be a transferee under the NFA, a provision that defines “person” as:

A partnership, company, association, trust, estate, or corporation, as well as a natural person. (CFR §479.11)

Thus, when the NFA says that the transferee must be identified in the application for an NFA firearm, it is only where

. . . such person [i.e., transferee] is an individual, [that] the identification must include his fingerprints and his photograph . . . . (USC §5812) (emphasis supplied)

and therefore, only in such circumstances that the local CLEO must sign off before the application can proceed.

However, if the transferee is a partnership or a corporation or a trust? (Is that too obvious a hint that a trust might be the solution to the problems of both the prospective NFA firearm buyer and the reluctant CLEO?)

Rather than going the individual route, maybe a a trust is the better option. No muss, no fuss. No fingerprints, no photos. No CLEO, no certification. All legal, all by the book. Annie gets her gun. All right. [Readers may be nodding off. Another image to get them to the end.]:

sun-rising

And thus was born the gun trust and your local CLEO relieved of a responsibility s/he didn’t want in the first place. The end.

The Wyoming State Bar does not certify any lawyer as a specialist or expert. Anyone considering a lawyer should independently investigate the lawyer’s credentials and ability, and not rely upon advertisements or self-proclaimed expertise. This website is an advertisement.