NFA Gun Trust Review
May 20, 2012

Recently I have been looking into getting some value oriented C3 Defense suppressors to review and then eventually use these suppressors during reviews of other suppressor ready (those with a threaded barrel) firearms.  During a discussion with the C3 Defense representatives, they suggested looking into setting up a NFA Gun Trust for the registration of ownership because having a trust can reduce the time and difficulties associated with purchasing NFA regulated items.  They described some of these difficulties as getting passport photos, fingerprints, the county Sheriff to sign off on the paperwork, and then the issue of who actually has the right to possess (shoot) the items.  From a time perspective, not having to get photos, fingerprint cards, background checks and signatures will clearly reduce the time to receive your NFA item.  All of these seemed like good points and that was when I started falling down the NFA Gun Trust rabbit hole wondering how deep it may go. This review is what I found along the way.

I'm not sure if this is really a review, but more of a compilation of what I learned while doing my research and an explanation of how I made my decisions during the process of getting a NFA specific gun trust in place.  This information should not be considered as formal legal advice, but instead as a guide to point you in some good direction when you are doing your own research.  Also keep in mind that I live in the state of Georgia, so there may be items that are state specific.  If you have already searched on the internet, you can find some good information out there, but my impression is that some of it may also be confusing or misleading.  If you see anything that is in error in this review, please send an email to editor@gunsumerreports.com and I will do some research to confirm and then update the review.

 


To start out this review, this next information is my simplified version about the NFA and regulated firearms.  If you want the long versions, I've provided links to those documents where possible.

National Firearms Act (NFA)

For the average consumer, The National Firearms Act (NFA) basically imposes a tax on the transfer of certain firearms along with requiring registration of those firearms.  In most cases the tax is $200, but in the case of weapons identified as "any other weapons", this tax is $5.  The NFA also covers rules and regulations for importers, manufacturers and dealers, but since I'm trying to keep this write-up simple and directed toward the "average consumer" (like me) I'm not going to cover those aspects.  If you would like to see a copy of the NFA, click here for a PDF version of the Federal Firearms Regulation Reference Guide and scroll down to page 74.

NFA Regulated "Firearms"

The NFA defines the regulated "firearms" covered by this act in Section 5845 (a) below. 

  1. A shotgun having a barrel or barrels of less than 18 inches in length;
  2. A weapon made from a shotgun if such weapon as modified has an overall length of less than 26 inches or a barrel or barrels of less than 18 inches in length;
  3. A rifle having a barrel or barrels of less than 16 inches in length;
  4. A weapon made from a rifle if such weapon as modified has an overall length of less than 26 inches or a barrel or barrels of less than 16 inches in length;
  5. Any other weapon, as defined in subsection (e); (see below)
  6. A machinegun;
  7. Any silencer (as defined in section 921 of title 18, United States Code);
  8. A destructive device.
  9. The term 'firearm' shall not include an antique firearm or any device (other than a machinegun or destructive device) which, although designed as a weapon, the Secretary finds by reason of the date of its manufacture, value, design, and other characteristics is primarily a collector's item and is not likely to be used as a weapon.

(e) Any other weapon. The term 'any other weapon' means any weapon or device capable of being concealed on the person from which a shot can be discharged
through the energy of an explosive, a pistol or revolver having a barrel with a smooth bore designed or redesigned to fire a fixed shotgun shell, weapons with combination shotgun and rifle barrels 12 inches or more, less than 18 inches in length, from which only a single discharge can be made from either barrel without manual reloading, and shall include any such weapon which may be readily restored to fire. Such term shall not include a pistol or a revolver having a rifled bore, or rifled bores, or weapons designed, made, or intended to be fired from the shoulder and not capable of firing fixed ammunition.

NFA, Title II and Class III

The NFA gets referred to as Title II because it is the second section (title) of the Federal Firearms Regulations.  The NFA defines different classes for importers, manufacturers and dealers.  Basically, Class III is a Dealer in "Firearms" as defined above.  It seems that many people refer to regulated firearms as NFA, Title II or Class III firearms and I believe these terms to all mean the same group of "firearms" above.


Back to the Review

As I was doing my research, I found that NFA firearms can be transferred to either an individual or a legal entity.  A legal entity could be a corporation, LLC or trust.  Of these entities, for a Georgia resident (me), the trust is the easiest to setup and maintain, so I believe that a trust would be the natural progression for an average consumer like myself.  This also explains why I was recommended to get a trust in the first place.  If you are a resident of another state, you will need to check your state and local requirements to see which may be the best entity for you.  Before I go any further I need to say that all trusts are not equal.  There are those who have setup trusts using Quicken WillMaker and it only cost them the price of the software, and there are those who have spent $2000+ in getting a gun trust in place, as well as a range of prices in between.  I know there is a huge difference in these trusts because I have a copy of Quicken WillMaker and took a look at what would have been the final trust if I would have gone that route.  Although I feel sure it would have been a valid trust, in my mind it was not NFA specific and I felt that I wanted a trust to have clear language addressing potential NFA issues.

Why am I hung up on wanting language that may be NFA specific?  The thought of myself or family members (huge point here) spending ten years in federal prison, fines up to $250,000, seizure of vehicles used to transport the illegally possessed NFA items, seizure of all of my non-NFA firearms, and the chance of losing rights to own or possess any firearms was motivation enough to get me hung up.

My next point is that you should do your research and find an attorney that specializes in doing NFA Gun Trust.  Again, I'm sure that any attorney can set you up with a trust, but the question is how NFA specific will it be if they don't have experience setting up that type of trust.  When I did my online search, I found several law firms that set up NFA Gun Trusts in Georgia.  I reviewed their websites and contacted three for pricing.  In the end, I selected The Kim Firm, LLC to do my NFA Gun Trust.

There were several reasons I selected The Kim Firm, LLC, and I have tried to list them in order of what I considered to be important to me.

  1. The named partner, Jin H. Kim, Esq., not only specializes in preparing NFA Gun Trusts, but also specializes in setting up and representing Corporations and LLCs, including NFA firearms manufacturers and dealers.
  2. Jin H. Kim, Esq. also communicates with the BATFE through the normal course of his practice so he has an in-depth understanding of their process and issues they may be seeing with NFA Gun Trusts that are being submitted and then rejected for various reasons.
  3. The Kim Firm prepared NFA Gun trust is specially tailored to my situation and my needs. It also addresses Georgia specific laws and legalities associated with owning NFA firearms.
  4. Jin H. Kim, Esq. was willing to take the time to answer all my questions and educate me on issues I didn't even know to ask.
  5. Jin H. Kim, Esq. is also active in the shooting community (Certified NRA Instructor) and teaches personal protection courses and the legal aspects of firearm ownership, including ownership of NFA firearms.
  6. Last, the Kim Firm's price of $550 (at the time of this review) seemed to be fair for the product and service that their law firm was providing.

The table below is my attempt to compare the items I considered when looking at registering ownership as an Individual versus NFA Gun Trust.  In summary, the reduced hassle of no CLEO signature, invasive individual background check, finger print cards and passport photos, coupled with the flexibility of adding others to the NFA Gun Trust, and finally the peace of mind I will get from knowing my family is protected from accidentally breaking the laws was enough to justify the price of the Georgia compliant NFA Gun Trust.

Compared Item Individual Transfer NFA Gun Trust Transfer
Registration requires Form 4 (AFT F-5320.4, Form 4, Application For Tax Paid Transfer and Registration of Firearm) Yes Yes
Typical NFA Tax Per Item $200 or $5 $200 or $5
CLEO (Chief Law Enforcement Officer) Signature Yes No
Invasive Background Check Yes No

Delay caused by Background check and scheduling a meeting with your CLEO

Yes No
Passport Photos Yes No
Fingerprints Yes No
Privacy of Ownership No Yes
The remaining items are based on the Georgia compliant NFA Gun Trust prepared by the Kim Firm LLC.  These items will vary based on the jurisdiction you live and the law firm preparing your NFA Gun Trust
Cost of NFA Gun Trust None $550
Multiple persons can legally posses, handle, carry, and utilize property in a NFA Gun Trust No Yes
It is possible to easily grant and remove the powers and rights of use of the NFA Gun Trust inventory to Individuals No Yes
NFA Gun Trust items transfer to beneficiaries based on your estate plan No Yes
NFA Gun Trust accounts for the possibility that one of your beneficiaries may not be eligible to own firearms in the future No Yes
Overall risk of my family accidentally breaking the NFA laws and regulations High Low

Process of Setting Up the Georgia compliant NFA Gun Trust with The Kim Firm, LLC

From the time I sent the initial email (Sunday night) until I had a signed my NFA Gun Trust (Thursday) was about 4 days.  Everything was done via phone calls and emails except the final signatures executing the NFA Gun Trust which were done in person at the Kim Firm.  It would have been possible for me to execute the NFA Gun Trust on my own by getting witnesses and going to a notary, but I wanted some face to face time with Jin H. Kim, Esq., and his office was only about 45 minutes away.

The process went like this:

  1. Sunday Night: Reviewed the Kim Firm's website and initiated contact via email.
  2. Monday: Jin H. Kim, Esq., called to conduct an initial client consultation to determine the method of NFA item ownership that best fit my needs.  In the course of the conversation we discussed the various methods of NFA item ownership and the pros and cons relative to my situation.  He gave me lots of great information and advice and I agreed to go forward with the process.  His assistant sent a 4 page questionnaire for me to fill out stating my general wishes for the NFA Gun Trust.  I completed and sent the questionnaire back to them.
  3. Tuesday: Assistant sent request for the retainer payment and I paid with credit card. We arranged a time on Thursday to meet for signing the NFA Gun Trust.  Later that day Jin H. Kim, Esq., called to discuss some details regarding my estate plan based on my responses to the questionnaire.
  4. Wednesday: I received a draft of my personalized Georgia compliant NFA Gun Trust, reviewed and provided comments back to the Kim Firm.
  5. Thursday:  We executed my Georgia NFA Gun Trust at the Kim Firm.

Looking back on the whole experience, it was much simpler and faster than I had ever expected.


What did I get?

  1. A specialized NFA Gun Trust tailored to my personal situation which was compliant with the state law which I reside.
  2. Amendment Forms (both electronic and hard copy) to administer and maintain my NFA Gun Trust. 
  3. Schedule “A” Inventory Form (both electronic and hard copy) to record items added to the NFA Gun Trust or to revise and remove items from the NFA Gun Trust.
  4. A detailed explanation of how to properly administer the Georgia NFA Gun Trust in my capacity as the Trustee and keep the paperwork up to date and in compliance with state and federal law.
  5. A detailed explanation of what I as the Trustee need to ensure is written on the Form 4 (BATFE 5320.4) and Form 1 (5320.1) at the time an NFA items is registered for ownership.
  6. An opportunity to talk candidly to an experienced and knowledgeable legal expert about the ownership of NFA items.

What does the NFA Gun Trust cover?

I have tried to outline below as much as I could about what is covered in the NFA Gun Trust I received from the Kim Firm.  Believe me, there are many parts that I had to read several times before I was able to understand what was being said and in a couple of cases I still needed it explained because I didn't understand the legal terminology.  Also keep in mind that the foundation or mechanisms of the NFA Gun Trust are based on those you would find in most comprehensively written trust documents.  So what does my trust cover?

  1. It identifies a name of the trust.  In my case, an example of my trust name would be "Doe Family Gun Trust".  In talking with Jin H. Kim, Esq., his recommendation to go with a simple name that includes the "family" term seemed like a good one.  If you or your family are ever stopped and have to show paperwork, your last name and the word "family" should help reduce any confusion about identity.  Next, something like "Zombie Killer Extreme Weapons Trust" may peak more interest from your local law enforcement than you would want and it also becomes many characters to engrave on your firearms.
  2. It identifies and defines the parties such as a "Settlor" and "Trustee" for the NFA Gun Trust.  In my case, I am both of these and I have full control over everything.  While the Settlor (me) is alive, regardless if I am the trustee or not, I have numerous safeguards to control what happens with the assets of the NFA Gun Trust.
  3. It identifies the purpose of the NFA Gun Trust and states the initial items to be transferred to the NFA Gun Trust.  It also has some specific provisions relating to firearms and firearm accessories possession by the NFA Gun Trust.
  4. It has provisions for adding new items to and removing items from the NFA Gun Trust.
  5. When the NFA Gun Trust is setup, it is a revocable (changeable) trust.  Upon the death of the Settlor, the trust becomes irrevocable which means that it can not be changed.
  6. It has provisions to allow me to sell off any and all assets if needed to make ends meet.
  7. It has provisions for assets to be sold to pay for my funeral or medical expenses in the event I die and was not able to take care of these in other ways.
  8. It defines Beneficiaries and their rights in relation to possession, carry, use, etc. of the firearms and accessories.
  9. It establishes mechanisms, guidelines and benchmarks for payments to the Beneficiaries in the event of need.  For instance in my NFA Gun Trust, I named my spouse the successor Trustee, so that in the event of my death, my spouse could make the decision to sell the NFA Gun Trust assets instead of distributing them to the final Beneficiaries if money was needed to make ends meet.
  10. It provides the distribution plan for the NFA Gun Trust Assets to Beneficiaries, including provisions for distribution to minor aged children (who are not legally allowed to possess NFA items) and distribution to prohibited persons (as defined by federal and state law).
  11. It provides alternate distributions plans if you and your whole family die together.
  12. The NFA Gun Trust ends after all assets have been distributed to the Beneficiaries.
  13. It goes into great detail defining Trustee’s powers and management of the NFA Gun Trust with a focus on protecting me, my Beneficiaries and the assets contained in the trust.
  14. It allows the identification of other individuals who have very limited powers but still have the full rights to posses, handle, carry, use, maintain, repair, transport, etc. the trust items.  Other than allowing the Beneficiaries these same powers, this would have to be the next greatest benefit (my opinion) of the NFA Gun Trust.  If your buddy wants to go on a shoot with you, utilize the provided NFA Gun Trust Amendments provided by the Kim Firm and grant him the necessary powers and you would have no problems.
  15. It defines mechanisms to protect you and your family in the event you, your spouse, or your kids become ineligible to posses or own firearms.  For example, if you were charged for some type of criminal activity making it illegal to possess NFA items, you could resign as Trustee and your spouse could now take the position of Trustee.

It has many other features and protections of traditional trusts in place to protect you, your family and your assets.  My half a page above was translated from 16 pages of single space text which makes up the body of my individually tailored Georgia compliant NFA Gun Trust.  Believe me when I say I have watered it down, but I hope you get a flavor for the structure of the trust and how it is tailored to be NFA specific in certain areas.


Form 4 Trust Specific Information

Now that I have a NFA Gun Trust, how did it get used when the Dealer filled out the Form 4?  After all my discussions, research, and actually going through a transfer, these are the Trust related items that you need to pay specific attention to when the dealer fills out your Form 4.

  • Block 2a - Must state the Trust name only and address of where the item will be stored.  In this example I show it as the "Doe Family Gun Trust".  If for some reason the name of your trust is really "The Doe Family Gun Trust", then you must put the "The" in the front of the trust name on the form.  Speaking from experience, my application in this review was sent back with an error letter because I didn't have the "The" in front of my trust name.  Also, if for some reason they (store owner) put your name instead of the trust name, then the transfer would now be to an individual and would require photos, fingerprints, background check and the CLEO signature.

NFA Gun Trust

  • Block 15 - Must have the Trust name (don't forget the "The" if applicable) at the top and then your signature with the word ", Trustee" or "as Trustee of the Doe Family Gun Trust" at the end identifying that you are the Trustee for your Trust.

NFA Gun Trust


One Week Later

From the time I first discussed the possibility of a NFA Gun Trust at C3 Defense, one week later I was sitting back at their office getting the paperwork done for one of their 300 Blackout suppressors and one of their Rimfire suppressors.  I walked in with a couple of copies of my trust, a checkbook, and that was it.  No photos, fingerprint cards, background checks or CLEO signature required.  They filled out the paperwork, I checked it, signed it, and they sent if off.  It couldn't have been much simpler than that.  Now comes the agonizing wait (which at the time of this review is 6.5 months normally) for the approval by the BATFE for registration of ownership and transfer from C3 Defense to my NFA Gun Trust.  Below is a time line of how long it took to process my paperwork, which ended up being a mess.

  • Form 4 Paperwork Mailed to ATF: 5/7
  • Tax Checks to ATF Clear Bank: 5/15
  • Called ATF on 9/28 at 304-626-4500 and suppressors went "Pending" on 6/12
  • Called ATF on 11/30/12 and found out that the paperwork was sent back on 11/11/12 because I didn't put the word "The" in front of my trust name.  I also called C3 Defense and they said they had already corrected the paperwork and sent it back to the ATF.
  • Called ATF on 1/3/13 and paperwork wasn't sent in as thought because it was postmarked 12/27/12.  Agent reviewed paperwork and said it wasn't correct because they (C3) had wrong address.  It seems C3 moved to a new location and now their FFL was under a new address.  Paperwork was returned again to C3.
  • On 1/30/13 I went back to C3 and resigned a new set of paperwork.
  • On 2/4/13, ATF called to let me know they received the forms again and they all looked good.  At this point the agent knew me by name.
  • Called ATF on 2/20/13 and they said forms were approved on 2/10/13.
  • Contacted C3 on 12/20/13 and they said they received forms on 2/19/13.
  • Finally, on 2/21/13 I picked up my two C3 Defense suppressors.

The lengthy duration of getting my paperwork completed on these two suppressors was due to several things.  The first was the confusion on the word "The" in the heading on the first page of my trust.  The agent interpreted this as the word "The" was part of the trust name and my paperwork didn't have the word "The" so she kicked it back.  Next, C3 Defense was going through some rough times is no longer a firearms manufacturer and I believe my paperwork was delayed significantly on their end.  After talking with the AFT agent, I found out the ATF sent an error letter and final notice letter to C3 and then a final notice letter to me.  Last, there was another round of error letters because of the change in business address for C3 Defense.  Honestly this was a mess and I thought for months I wasn't going to get the suppressors.  In the end, it all worked out.  I learned a couple of lessons here.  First you should purchase your NFA items from someone who you think will still be around for awhile.  Next, the actual costs of these value line suppressors didn't seem like much compared to the time, effort, worry and tax money spent on trying to get them.  In the future I will pay more attention to specifications and features on NFA items than the purchase price.

C3 Defense Clandestine 22LR Suppressor
C3 Defense Clandestine 22LR Suppressor

C3 Defense Clandestine 300BLK Suppressor
C3 Defense Clandestine 300BLK Suppressor

 

Bottom Line:

After going through the experience with the Kim Firm, considering legal issues, and understanding the protection a NFA Gun Trust gives you and your family, I highly recommend that you consider setting up a NFA Gun Trust before your next Class III purchase.  If you plan on multiple Class III purchases, I feel the time and money you pay for the NFA Gun trust is a wise investment that will pay off for the rest of your life.  Also, once you possess your NFA items, the value you get from your family and your friends being able to legally try out and enjoy your NFA items may be priceless (or at least save someone $250,000).  As long as you have a copy of your NFA Gun Trust in your car, you are not only properly protected from possible violations of NFA possession but are also properly armed to make an impulse buy the next time you are out looking at NFA related firearms and accessories.   For some of you, setting up a NFA Gun Trust, Corporation or LLC may be the only way to purchase a Class III item because your local CLEO will not sign your paperwork.  Whatever the reason you have for setting up a NFA Gun Trust, do your research and make sure you are getting a NFA Gun Trust that is tailored for your individual situation and includes the necessary NFA specific protective provisions.  Based on my experience with The Kim Firm, LLC, due to Jin H. Kim, Esq’s., experience, knowledge and his law firm’s personalized customer service, if you live in Georgia, I would definitely recommend giving them a call.


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