Gun Trust Library | Colorado Firearm Trusts, NFA Trusts and Gun Trusts

Am I supposed to send updated schedules to the ATF when I add items, NFA and Non-NFA?

Question: I have a quick question for you related to my trust and the upcoming effective date related to 27 CFR Parts 478 & 479 related to the stabilizing braces. In the link that you sent related to the topic in the Q/A section it refers to evidence that the trust possessed the firearm prior to the date the final rule is published. The evidence includes the signed, dated, and notarized terms of the trust or trust schedules. My question for you is related to the trust schedules. Am I supposed to send updated schedules to the ATF when I add items, NFA and Non-NFA (magazines for example), or am I allowed to keep these records on hand and provide if necessary?

Answer: You do not need to notify the ATF whenever you add non-NFA items to your Colorado firearms trust. We do not recommend transferring large capacity magazines to your Colorado firearms trust. “Large capacity” is more than 15 rounds.

Regarding adding NFA items to your firearms trust, by default, you notify the ATF whenever an NFA item is added to the trust. Transferring an NFA item to the trust requires an approved ATF Form 1 or Form 4 depending on the situation.

Regarding evidence that the trust possessed the braced pistol prior to the effective date of the final rule, the ATF will require more than the trust execution date. ATF will want to see clear and convincing proof that the braced pistol was transferred to the trust prior to the final rule effective date. Our trust does not include schedules (like a Schedule A) specifically so that your trust property remains private and is not disclosed every time you submit an ATF Form 1 or Form 4. We use an assignment sheet/page with two witnesses. You have copies of the assignment sheet in your trust notebook. If you properly filled out and dated an assignment sheet prior to the final rule effective date and had the assignment sheet properly witnessed prior to the final rule effective date, the ATF should accept that as clear and convincing proof. Another (more conservative) option is to get sworn statements from your witnesses, acknowledged by a notary, and include those sworn statements along with the assignment sheet. The sworn witness statements should state that the witnesses, witnessed your signature on the date stated on your assignment sheet. Please keep in mind that a false sworn statement submitted to the ATF can result in substantial criminal penalties.

NFA Tax Stamp Denials

NFA Tax Stamp Denials.

Something apparently has changed at the ATF/FBI. Clients who, in the past, had no problem getting an NFA tax stamp are being disapproved. The reason for being disapproved is because the NCIC background check is being classified by ATF as “unresolved”.

I was hoping to have more information and a solution before writing this article. However, the 120-day clock for the special Form 1 applications is ticking. Those making application to the ATF need to be aware of the issue.

So far, it appears to be older applicants with criminal charges as old as the early 1970s and as recent as the early 2000s. These NFA tax stamp applicants have no problem passing dealer – initiated background checks on Title I firearms. Dealer-initiated background checks are Form 4473 checks run through the Colorado Bureau of Investigation (CBI) and NCIC. A public search of CBI records sometimes shows the offending criminal record. Often a public search of CBI records does not show the offending record because Colorado considers the matter resolved and the record sealed. Criminal records are often sealed automatically after a certain period of time and sometimes at the request of the individual. Once sealed, those matters do not show up on a standard CBI search request but do show up to the FBI. To obtain those records requires a special trip to CBI or an application to the FBI for your personal NCIC “rap sheet”. CBI will only release sealed criminal records to the individual in question and in person. FBI will release the criminal records to us if authorized by the client. Both require formal fingerprinting.

In speaking with the FBI, the FBI points the finger at the ATF claiming that all the FBI does is run the NCIC report. However, we have requested UPINs from the FBI via a Voluntary Appeal File application (VAF) process and the FBI is denying those UPIN requests. I would say for the same reason, but so far, nobody is telling us or the client exactly what the issue is. There is a process in Colorado to supplement criminal records. However, to supplement the record we must know what the problem or issue is that needs to be corrected. Otherwise, we are guessing. Needless to say, this has been a little frustrating and time consuming.

Below is my best guess about what is going on. It appears that somebody at the ATF, FBI, or both has decided that any charge, no matter how minor, that could possibly result in an individual being considered a prohibited person is being used to disapprove NFA tax stamp applications as an unresolved background check. Pursuant to current case law, there is no court remedy for an improper denial of an NFA tax stamp. See, e.g., Bowen v. United States (S.D. Ga. 2021) and Kaszycki v. United States (W.D. Wash. 2020). These two cases coincide with about when clients report the issue arising. For example, if there is a charge involving a physical altercation, we suspect the ATF takes the position that the individual must show that it did not involve domestic violence even though the charge is not a DV charge. To contrast, another example would be a felony arrest where no charges were ever filed. Individual is arrested, fingerprinted, and then let go because law enforcement determined that it was a mistake. In that case and assuming older cases, after ten years the Colorado record might be automatically sealed and then eventually purged with the CBI disposition being “Record Purged”. “Record Purged” is not a defined criminal disposition even though CBI may know that means charges were never filed. FYI. Today, if charges are not filed, the Colorado record is sealed rather quickly. The individual feels vindicated for the moment. However, that arrest record is still out there and now, since even shielded from the individual’s view, can come back to haunt them when they apply for an NFA tax stamp.

I will write more on this issue as we progress. Hopefully, we will have some success in clarifying the record and eventually getting our clients back in good standing with the ATF.

2021R-08F and Trusts

2021R-08F and Trusts

Colorado Firearm Background Check Requirement For Trusts

1. There is an open question regarding whether a settlor of a revocable trust must comply with the Colorado background check statute (18-12-112) when assigning the settlor’s existing firearms to the settlor’s revocable trust. Personally, I think it is silly to take that position. However, we have no guidance from the state attorney general, no case law on the subject, and the statute specifically mentions transfers to trusts. Therefore, the conservative approach is to comply with the statute — if you can. Word from clients is they have a hard time finding an FFL who will run a background check on an individual in their capacity as trustee.

2. The required background check is an ATF Form 4473 background check submitted by an FFL (Federal Firearms Licensed dealer) to CBI as if it was a sale. As part of the process, CBI transmits to the dealer approval of the transfer. It is more than just a background check by CBI. You cannot go directly to CBI and get the required background check because the check is specific to the firearm(s) being assigned to the trust. You must go through an FFL using Form 4473.

3. More than 1 firearm can be listed on a single Form 4473. There are additional blanks on the form. The instructions explain how to run a check on more guns than blanks on the form. (Instructions Section A, Questions 1-6).

4. The dealer will charge for the background check. For example, $50 for the first gun and $25 for each additional gun. The statute says the fee cannot exceed $10. Not sure the dealers care because they can decide it is not worth their time.

5. I am told that many firearms dealers will not run a background check on a settlor assigning the settlor’s gun(s) to a revocable trust. His consultant told him not to because it could throw up a red flag. I have heard of others that will run the check. The point is, the FFL is not required to help.

6. Co-trustees do need a 4473 background check. The co-trustee should get the Form 4473 background check before the settlor’s firearms are assigned to the trust. The assignment must occur within 30 calendar days of approval by CBI.

7. Form 4473 is set up for individuals. While trusts are not specifically mentioned in the instructions, we use the instructions for a corporation, company, association, partnership, or other such business entity. On the back of Form 4473, Section B, 2nd paragraph. This is when the Sworn Statement for Primary Trustee is used. While it has gotten better since 2013, an FFL left to his/her own without instruction will possibly run the check incorrectly (as if for an individual and not wanting to include the Sworn Statement as part of the record). For that reason, we advise to sign Form 4473 “Your Name, Trustee”.

8. Get a copy of the approval specific to the gun. This has traditionally been a problem area. FFLs are not used to giving that information to the customer. FFLs are very wary of doing something they do not ordinarily do for fear of losing their license. If nothing else, take a picture of the approval with your phone.

Transferring Non-NFA Firearms to Your Gun Trust

Transferring Non-NFA Firearms to Your Gun Trust Q & A

Question: I am working on transferring my non-NFA firearms into my trust. After talking with our Colorado firearms dealer, they believed that all that is needed to move my existing non-NFA firearms into my trust is to do a “private party transfer” to transfer the firearms from us to our trust. Would this be the proper procedure for non-NFA firearms?

Answer: Generally speaking, yes. Use the assignment sheet/form that came with your trust to make the assignment. To the extent you can, keep a record of the Form 4473 background check and approval even if just taking a picture with your phone.

Question: Any future non-NFA firearms that are purchased, I assume I can purchase these directly into the trust by utilizing the gun trust bank account associated with the trust, correct? For the background checks on any new non-NFA firearms, is the name of the trust used, or would the background check have to be completed for the trust’s trustee and co-trustee?

Answer: Yes, future Colorado firearm purchases can be made directly into the trust. However, ATF Form 4473 is not set up for entities/trusts. When filling out ATF Form 4473, you would fill it out in your individual name then sign “Your Name, Trustee”. You would use/submit the ATF sworn statement we provided along with the properly completed ATF Form 4473. The ATF sworn statement follows the instructions on the back of Form 4473 for when acquiring a firearm on behalf of “or other such business entity”. See ATF Form 4473 Instructions, Section B, Paragraph 2. The conservative approach is to have all current, co-trustees go through the ATF Form 4473 background check process for each firearm purchased by the trust.

NFA Trust Change of Address – ATF Form 20

CLARIFICATION. Form 20 required prior to interstate move. Recommended for move within Colorado. Our suggestion is get in the habit of always notifying the ATF so you don’t forget and run afoul of the interstate rules when you move between states.

NFA Trust Assignment Sheet

NFA Trust Assignment Sheet

Good afternoon question came up today.

I’m selling an item out of my firearms trust.

Do I use the assignment sheet that came with the trust to convey that item to the new owner?

And the answer is no.

The assignment sheet that came with our [firearms/NFA] trust is specifically for transferring property into the trust.

Transferring property out of the trust you would just do it by a typical bill of sale. the assignment sheet is specific to when you’re adding property to the trust from another source.

Thanks.