Dogulas A. Turner, Esq.

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.

Colorado Gun Law Update – Polis Signs Two Gun Bills

Note:  I use the term “prohibited person” in the video.  The exact statutory language is a person ineligible to possess a firearm — which is much broader than just a prohibited person as that term is used by the federal government.

For a complete copy of the recent Colorado laws, click the links:

https://leg.colorado.gov/sites/default/files/2021a_078_signed.pdf
https://leg.colorado.gov/sites/default/files/2021a_1106_signed.pdf

Colorado NFA Trust Termination Clause

Most of our NFA trusts contain a termination clause. In most cases, the NFA trust does not terminate at your death. The trust usually continues for the longest time applicable under the rule against perpetuities.

Will You Need A Gun Trust? 

There is a new sheriff in town.  His name is Joe Biden.  The Biden administration has already floated the idea of applying the $200 National Firearm Act (NFA) tax to all semi-automatic rifles.   The sleeper is the application of the NFA, in general, to those rifles.  And for that reason, many individuals are considering a gun trust.

To understand the issue requires starting with the Colorado background check law enacted on July 1, 2013.  The 2013 law required a background check on all Colorado gun sales.  Sounds reasonable, right?  Well, the law is not about gun sales.  The law is about firearm possession.  Anytime a Colorado firearm is handed off to anyone, the question you must ask is, is a background check and approval of the transfer required?

As originally introduced by the Colorado House, the 2013 law required a background check on almost any transfer of possession no matter how temporary.  Out in the field plunking cans and your buddy wants to try out your new rifle?  Background check required.  Want to leave the gun in your house and available to your spouse?  Background check required.  Want to take your gun to a gunsmith and get it cleaned up?  Background check required.  Want to get the gun back from the gunsmith?  Background check required.  And of course, a fee each time.

When the 2013 law came out of the Colorado House, many individuals created a gun trust, identified family members who would be entitled to possession of trust firearms, and transferred their firearms to the trust.  Why?  So that family members need not be afraid of violating the law by sharing family firearms.  To make a long story short, the Colorado Senate modified the background check law passed by the Colorado House.  The Colorado Senate made exceptions including immediate family loans and gifts, gunsmiths, and loans for up to 72 hours.  In my opinion, a much less onerous law than originally thought.

Until 2013, I never drafted a firearm trust for “regular” firearms (Title I Firearms).  Firearm trusts were a creature of the NFA (Title II Firearms sold by a Class 3 dealer).  The NFA was enacted in the 1930s when the federal government did not think it could prohibit guys like Al Capone from owning full-auto firearms – Tommy Guns.  However, the federal government could tax the transfer of possession, strictly limit possession to the transferee, and require registration through a tax stamp.

The Biden Administration has floated the idea of not just taxing semi-automatic rifles like they do full autos, suppressors, short barreled rifles, and short barreled shotguns; but to have the semi-automatic rifles be subject to the entire NFA.  That would mean any transfer of possession, would require an application to the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE or ATF), the submission of fingerprint cards and photos, $200, and a year-long wait.  There would be no exceptions for a spouse, child, father, etc.  There would be no exception for a gunsmith.  There would be … no exceptions.  The penalty for violating the NFA is up to 10 years in federal prison and $250,000 in fines.

In a properly drafted gun trust, multiple individuals can share possession of the trust firearms.  Usually these are family members or members of the same household.  Individuals are already conveying firearms to their firearm trusts in anticipation of the anticipated law.  Many of the concerns in 2013 causing individuals to establish firearm trusts are concerns, today.  If you want to share your firearms with family members, a firearms trust may be in your future.

9th Circuit Strikes Down California Large Capacity Magazine Ban

Below is a summary of the 9th Circuit Court’s holding.  Note the Colorado large capacity magazine ban has NOT been struck down as of August 15, 2020.  Link to the entire holding at the bottom.

The panel affirmed the district court’s summary judgment in favor of plaintiffs challenging California Government Code § 31310, which bans possession of largecapacity magazines (“LCMs”) that hold more than ten rounds of ammunition; and held that the ban violated the Second Amendment.

The Ninth Circuit employs a two-prong inquiry to determine whether firearm regulations violate the Second Amendment: (1) whether the law burdens conduct protected by the Second Amendment; and (2) if so, what level of scrutiny to apply to the regulation. United states v. Chovan, 735 F.3d 1127, 1136 (9th Cir. 2013)

The panel held that under the first prong of the test, Cal. Penal Code § 32310 burdened protected conduct. First, the panel held that firearm magazines are protected arms under the Second Amendment. Second, the panel held that LCMs are commonly owned and typically used for lawful purposes, and are not “unusual arms” that would fall outside the scope of the Second Amendment. Third, the panel held that LCM prohibitions are not longstanding regulations and do not enjoy a presumption of lawfulness. Fourth, the panel held that there was no persuasive historical evidence in the record showing LCM possession fell outside the ambit of Second Amendment protection.

Proceeding to prong two of the inquiry, the panel held that strict scrutiny was the appropriate standard to apply. First, the panel held that Cal. Penal Code § 32310 struck at the core right of law-abiding citizens to self-defend by banning LCM possession within the home. Second, the panel held that Section 32310’s near-categorical ban of LCMs substantially burdened core Second Amendment rights. Third, the panel held that decisions in other circuits were distinguishable. Fourth, the panel held that this circuit’s decision in Fyock v. City of Sunnyvale, 779 F.3d 991 (9th Cir. 2015), did not obligate the panel to apply intermediate scrutiny.

The panel held that Cal. Penal Code § 32310 did not survive strict scrutiny review. First, the panel held that the state interests advanced here were compelling: preventing and mitigating gun violence. Second, the panel held that Section 32310 was not narrowly tailored to achieve the compelling state interests it purported to serve because the state’s chosen method – a statewide blanket ban on possession everywhere and for nearly everyone – was not the least restrictive means of achieving the compelling interests.

The panel held that even if intermediate scrutiny were to apply, Cal. Penal Code § 32310 would still fail. The panel held that while the interests expressed by the state qualified as “important,” the means chosen to advance those interests were not substantially related to their service.

Chief District Judge Lynn dissented, and would reverse the district court’s grant of summary judgment. Judge Lynn wrote that the majority opinion conflicted with this Circuit’s precedent in Fyock, and with decisions in all the six sister Circuits that addressed the Second Amendment issue presented here. Judge Lynn would hold that intermediate scrutiny applies, and Cal. Penal Code § 32310 satisfies that standard.

Complete Text Here:  https://cdn.ca9.uscourts.gov/datastore/opinions/2020/08/14/19-55376.pdf

 

If I move to different state, what is required for my trust?

Question:

If I move to different state, what is required for my trust?  Do I have to update my trust with my current address?

Answer:

The question is a bit broad. Your NFA trust we drafted should be valid in most states. That is a different issue from whether the state you move to allows possession of the items in the trust. It is also different from what that state may require of you (registration, licensing, etc.). Those questions must be asked of a qualified lawyer in the state you move to.

Stated another way. Your trust does not circumvent local law. A gun trust does not allow you to do/not do something otherwise required by that state or the federal government.

Regarding your address, we specifically draft our trusts so that your address is not mentioned in the primary trust document.  This avoids the expense of having to update your trust simply because you changed your address.

NFA Trust Bank Signature Card

Question: 

I opened an account at the bank for the John Doe Trust. Per the Certification of Trust, the signature card originally read “The John Doe Trust, by John Doe, Trustee.” I signed it and the checks were issued with that as the Account Name.

However, the bank’s legal team said that my signature card needed to read:

The “John Doe Trust,” dated May 4, 2020 per the second line under section I of the Certification. They said that I can name the account however I like, but that the signature card had to read so.

That just seems odd to me. I did go in and sign a new card. However, I’m wondering whether everything is still okay from the standpoint of doing business and transferring property correctly.

Answer:

The bank is within its rights to have the signature card include the trust date.  The date of the trust is part of the trust name and helps better identify the specific trust in question.  For various reasons the date gets dropped.