The “NFA” or National Firearms Act of 1934 governs ownership of certain items, including: suppressors, short-barreled rifles, short-barreled shotguns, machineguns, destructive devices, and “any other weapon.” These are often referred to as “Class III” firearms. The process to get ATF approval for ownership of these items can be arduous and lengthy. Paperwork must be submitted to the ATF and a $200 “tax stamp” must be issued.
If an individual is seeking ownership of an NFA item, he/she must submit fingerprints, photographs, and get his/her local Chief Law Enforcement Officer (“CLEO”) to sign off giving approval. This doesn’t include the time for the ATF examiner to review the subsequent paperwork and issue the tax stamp (this can run 4 months or more). Some CLEOs drag their feet or even refuse to sign off, frustrating any attempts to legally own NFA items.
In addition to individual ownership, the ATF has approved legal entities to own NFA items. These entities can include corporations, LLCs, and trusts. A trust, specifically a Revocable Living Trust, is a popular method for more people to legally own and possess Class III NFA firearms in Nevada. Considering the advantages a trust possesses, it is clear why it is so popular.
A properly formed trust for NFA/firearm purposes has many distinct advantages:
- Multiple possessors in the form of co-trustees
- No fingerprinting or photographs needed
- No CLEO sign off
- Faster processing time than an individual application (no CLEO signoff delay)
- Some limited liability protection of the trust assets (they are owned by the trust, not an individual)
- Potentially low cost to create
- No annual fees like a Corporation or Limited Liability Company
- Anonymity (no reporting or registering)
- Upon death of the Settlor/Trustor, the trust property transfers to the beneficiaries via a tax-free transfer on a Form 5