Why choose a NFA Gun Trust instead of filing individually for your ATF Form 1, ATF Form 4, or ATF Form 5?

Benefits and Disadvantages of filling for your ATF 5320.1 Form 1, ATF 5320.4 Form 4, or a ATF 5320.5 Form 5 as an individual or as a NFA Gun Trust. 

There are three ways to apply for a NFA tax stamp through the ATF.  You can apply for a ATF 5320.1 Form 1, ATF 5320.4 Form 4, or a ATF 5320.5 Form 5, as an individual, as a trust, or as a legal entity.  In this article we go over the benefits and disadvantages of applying for a NFA Tax Stamp as an individual or a NFA Gun Trust.  The article is named, "Why choose a NFA Gun Trust instead of filing individually for your ATF Form 1, ATF Form 4, or ATF Form 5?", but after reading this article you may find that filing individually is the best route for you.  

Filing as an individual: If you are going to apply for a ATF 5320.1 Form 1, ATF 5320.4 Form 4, or a ATF 5320.5 Form 5, as an individual, there is a simplified procedure for this.  You will only be required to fill out the ATF 5320.1 Form 1, ATF 5320.4 Form 4, or a ATF 5320.5 Form 5.  The form you fill out will still require, two fingerprint cards, and a passport photo.  But the ATF 5320.23 Responsible Person's Questionnaire isn't required, as this information is obtained on the ATF 5320.1 Form 1, ATF 5320.4 Form 4, or ATF 5320.5 Form 5.  

Benefits of filing as an individual:

  • Less Paperwork:  ATF 5320.23 Responsible Persons Questionnaire Paperwork isn't required.  This information is filled out on the ATF 5320.1 Form 1, ATF 5320.4 Form 4, or a ATF 5320.5 Form 5.
  • Potentially Faster Paperwork Creation:  You are required to submit paperwork for yourself only, not anyone else like a trust or legal entity.  No paperwork needs to be notarized, dated or witnessed like a trust does. 
  • "Technically" Free: Doesn't require the creation of a trust.
  • CLEO: No CLEO signature is required, this is a newly added benefit since the ATF41F regulations went into place. 
  • Heritage:  Items that are owned by the individual can be passed down, and require the ATF Form 5 to do so, below describes this process if the NFA items are in a will/estate.   
j. Estates, Trusts, and Other Transfers by Operation of Law. When a firearm is being transferred from an estate by bequest or intestate succession (see 27 CFR § 479.90a), or by other operation of law to a beneficiary or other authorized recipient, ATF Form 5 is used to effect the transfer. The executor, trustee, or other person appointed to dispose of property shall provide documentation of the legal status of the person entitled to receive property, and shall identify that person in item 2a. In the case of an estate, item 3e shall be completed to reflect the decedent's information. If the transfer is to someone other than to a person identified under operation of law, the transfer is subject to transfer tax and ATF Form 4 shall be used. 

Excerpt taken from the ATF 5320.5 Form 5

For registered NFA firearms in the estate, the executor should take action as soon as possible to arrange for the proper registration of the firearms. Possession of an NFA firearm not registered to the possessor is a violation of Federal law and the firearm is subject to seizure and forfeiture. However, we do allow the executor a reasonable time to arrange for the transfer of the registered firearms in a decedent’s estate. This generally should be done before probate is closed.It is the responsibility of the executor of the estate to maintain custody and control of the firearms and to transfer the firearms registered to the decedent. The firearms may not be transferred to another party, such as a firearms licensee, for consignment or safekeeping. This would be a transfer subject to the requirements of the NFA. The licensee may assist the executor by identifying purchasers and acting as a broker.The firearms may be transferred on a tax-exempt basis to a lawful heir. The executor would apply on ATF Form 5, Application for Tax Exempt Transfer and Registration of a Firearm, for a tax-exempt transfer to a lawful heir. A lawful heir is anyone named in the decedent’s will or, in the absence of a will, anyone entitled to inherit under the laws of the State in which the decedent last resided. NFA firearms may be transferred directly interstate to a beneficiary of the estate. When a firearm is being transferred to an individual heir, his or her fingerprints on FBI FormsFD-258 must accompany the transfer application. However, if any Federal, State or local law prohibits the heir from receiving or possessing the firearm, ATF will not approve the application.

ATF Form 4 is used to apply for the tax paid transfer of a serviceable NFA firearm to a person outside the estate (not a beneficiary). ATF Form 5 is also used to apply for the tax-exempt transfer of an unserviceable NFA firearm to a person outside the estate. As noted above, all requirements, such as fingerprint cards for transfers to individuals and compliance with State or local law, must be met before an application may be approved. If an NFA firearm in the estate was imported for use as a “sales sample,” this restriction on the firearm’s possession remains.The NFA firearm may only be transferred to a Federal firearms licensee who has paid the special (occupational) tax to deal in NFA firearms or to a government agency.  

Excerpt taken from the Transfers of National Firearms Act Firearms in Decedents’ Estates.

We recommend pre-filling out a ATF 5320.5 Form 5 for every NFA item that you have purchased.  This helps making the ATF 5320.5 Form 5 application for the estate easier. 

Disadvantages of filing as an individual:

  • Limited Use of the NFA item(s): - You have to be with the NFA item(s) when it is/they are in use.  It is your responsibility to keep the NFA item(s) secure and safe at the location provided on your ATF Form 1, ATF Form 4 or ATF Form 5, with only yourself having access to the item, e.g. you are the only one who can have the safe combination/key if the NFA item(s) is/are in a safe.  NFA item(s) can't be left out of a safe when you are not present.  
  • Moving to a Trust:  If you decide later to move the NFA item(s) in your collection to a trust, you will be required to pay the $200 tax stamp again for every NFA item that is being moved to the trust.  This is because technically a new entity is buying the items and requires a new tax stamp. 

Filing with an NFA Gun Trust:  If you are going to apply for a ATF 5320.1 Form 1, ATF 5320.4 Form 4, or a ATF 5320.5 Form 5, with a NFA Gun Trust you will be required to fill out a ATF 5320.23 Responsible Person's Questionnaire for each responsible person named in the NFA Gun Trust.  This means that every responsible person named in the NFA Gun Trust will be required to submit the two fingerprint cards, a ATF 5320.23 Responsible Person's Questionnaire, and a passport photo.  In our NFA Gun Trust a responsible person is the settlor and any co-trustee(s).  Note: This maybe different in other NFA Gun Trusts.  

Benefits of filing with a NFA Gun Trust:

  • Multiple Co-Trustees:  You can name multiple responsible persons, a.k.a co-trustees in our NFA Gun Trusts.  This allows them to use, transport and have access to the NFA items that are owned by the NFA Gun Trust. 
  • Amendments:  The NFA Gun Trust can be amended.  Meaning you can add or remove co-trustees to the trust, change the successor trustee, add or remove beneficiaries, etc.  This adds flexibility to the NFA Gun Trust and is a major advantage of having a NFA Gun Trust.  We include these NFA Gun Trust amendments with every purchase.  Amendments only have to notarized.  Once notarized they are considered to a part of the original trust and must be sent to the ATF with your next NFA purchase.  Amendments allow you to add or remove co-trustees to the trust without having to pay for a new $200 tax stamp.  
  • CLEO: No CLEO signature is required. 
  • Heritage:  NFA items that the trust owns can be passed down, and require the ATF Form 5 to do so, below describes this process if the NFA items that are being transferred to the beneficiary or beneficiaries that were named in the trust.   
j. Estates, Trusts, and Other Transfers by Operation of Law. When a firearm is being transferred from an estate by bequest or intestate succession (see 27 CFR § 479.90a), or by other operation of law to a beneficiary or other authorized recipient, ATF Form 5 is used to effect the transfer. The executor, trustee, or other person appointed to dispose of property shall provide documentation of the legal status of the person entitled to receive property, and shall identify that person in item 2a. In the case of an estate, item 3e shall be completed to reflect the decedent's information. If the transfer is to someone other than to a person identified under operation of law, the transfer is subject to transfer tax and ATF Form 4 shall be used. 

Excerpt taken from the ATF 5320.5 Form 5

For registered NFA firearms in the estate, the executor should take action as soon as possible to arrange for the proper registration of the firearms. Possession of an NFA firearm not registered to the possessor is a violation of Federal law and the firearm is subject to seizure and forfeiture. However, we do allow the executor a reasonable time to arrange for the transfer of the registered firearms in a decedent’s estate. This generally should be done before probate is closed.It is the responsibility of the executor of the estate to maintain custody and control of the firearms and to transfer the firearms registered to the decedent. The firearms may not be transferred to another party, such as a firearms licensee, for consignment or safekeeping. This would be a transfer subject to the requirements of the NFA. The licensee may assist the executor by identifying purchasers and acting as a broker.The firearms may be transferred on a tax-exempt basis to a lawful heir. The executor would apply on ATF Form 5, Application for Tax Exempt Transfer and Registration of a Firearm, for a tax-exempt transfer to a lawful heir. A lawful heir is anyone named in the decedent’s will or, in the absence of a will, anyone entitled to inherit under the laws of the State in which the decedent last resided. NFA firearms may be transferred directly interstate to a beneficiary of the estate. When a firearm is being transferred to an individual heir, his or her fingerprints on FBI FormsFD-258 must accompany the transfer application. However, if any Federal, State or local law prohibits the heir from receiving or possessing the firearm, ATF will not approve the application.

ATF Form 4 is used to apply for the tax paid transfer of a serviceable NFA firearm to a person outside the estate (not a beneficiary). ATF Form 5 is also used to apply for the tax-exempt transfer of an unserviceable NFA firearm to a person outside the estate. As noted above, all requirements, such as fingerprint cards for transfers to individuals and compliance with State or local law, must be met before an application may be approved. If an NFA firearm in the estate was imported for use as a “sales sample,” this restriction on the firearm’s possession remains.The NFA firearm may only be transferred to a Federal firearms licensee who has paid the special (occupational) tax to deal in NFA firearms or to a government agency.  

Excerpt taken from the Transfers of National Firearms Act Firearms in Decedents’ Estates.

We recommend pre-filling out a ATF 5320.5 Form 5 for every NFA item that the NFA Gun Trust has purchased.  This helps making the ATF 5320.5 Form 5 application for the estate easier. 

Disadvantages of filing with a NFA Gun Trust:

  • Cost:  There is a cost to form and establish a NFA Gun Trust, our NFA Gun Trusts can be purchased for $59.95 and are able to used in all 50 states.  Other NFA Gun Trust lawyers can charge $500 or more for their NFA Gun Trusts.
  • Time: Our NFA Gun Trusts are delivered to you in 5 minutes or less.  Other NFA Gun Trust lawyers and other NFA Gun Trust services can take many weeks to be received.  We take the hassle out of that process and deliver your personally reviewed trust in a timely manner.  
  • More ATF Paperwork:  ATF 5320.23 Responsible Person's Questionnaire paperwork is required for every responsible person in the gun trust.  A responsible person in our NFA Gun Trusts are considered to be the settlor and any co-trustee(s).  This might be different in your NFA Gun Trust. 
  • Trust Paperwork:  Trust paperwork may require pages within the trust to be, notarized, dated and witnessed. 
  • Copy of Trust Must Be With You:  A photocopy of the notarized trust must accompany a copy of your tax stamp when you are transporting and shooting the NFA item(s).  We offer trust and tax stamp lamination services to help protect your paperwork when you are traveling with it.

 


Information located within this article is current as of July, 2018. Information located within this article is an original guide created by National Gun Trusts and not to be cited or used without the written permission of National Gun Trusts.

Other NFA Gun Trust and ATF Related Blog Posts

  • Who can witness the gun trust?
    Who can witness the gun trust?

    When notarizing the gun trust, you will also need to have a witness or witnesses present.  The witnes can't be the notary or anybody named within the gun trust. This ensures that the witness is im...

  • 2024 ATF National Canine Division Planner is Now Available
    2024 ATF National Canine Division Planner is Now Available

    ATF’s National Canine Division is the leading federal authority for explosives and accelerant detection canines for law enforcement and military organizations. These K-9s take on high-risk law enfo...

  • Current ATF Processing Times - January 2, 2023
    Current ATF Processing Times - January 2, 2023

     ATF Form Processing Time Paper Application Processing Time eForms ATF Form 1 91 Days 40 Days ATF Form 3 27 Days 10 Days ATF Form 4 201 Days 188 Days ATF Form 4 Trust 231 Days 200 Days ...