NFA Firearm Trusts

Attorney Alyssa Graham

November 2012


Particular attention must be paid to the disposition of firearms in estate planning documents, especially Title II firearms, commonly referred to as NFA firearms, because they have strict federal registration and transfer requirements, as well as transfer taxes imposed by the federal government. NFA Trusts are a unique estate-planning document that can be used to hold NFA firearms during a person's lifetime and to pass these firearms to others after the person passes away. If left in a will or traditional estate planning trust, executors and trustees must be careful not to violate local, state, and federal firearms laws. These laws regulate the transfer of certain firearms and prohibit the possession of certain firearms by certain people. Failure to comply with these laws may result in criminal liability and lead to substantial fines, jail time, and/or the forfeiture of the firearms.

Firearms are categorized into two groups under Federal laws, Title I and Title II firearms. Title II firearms include machine guns, silencers, short-barreled shotguns, short-barreled rifles, and destructive devices and are generally regulated by federal laws. Title I firearms, which include rifles, shotguns, and handguns, on the other hand, are generally regulated by state laws.

Under the Federal Regulations that govern NFA firearms, only the registered owner of the firearm is permitted to possess the firearm and there are strict requirements for the transfer of NFA firearms. 'œTransfer' has a broad definition, which includes: selling, assigning, pledging, leasing, loaning, giving away, or otherwise disposing of an NFA firearm. With each of these transfers documentation must be filed with the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The individual to whom the NFA firearm will be transferred must submit documentation which must include a photo, fingerprints, and a Form 4 Application for Transfer and Registration of Firearms, which must be signed by the Chief Law Enforcement Officer (CLEO) of the city or county where the individual resides. There is also a $200 transfer tax that must be paid each time a transfer occurs, in addition to the documentation.

These are just the federal requirements, and while New Hampshire does not impose further limitations on the ownership of NFA firearms, other states and localities may further regulate or ban the ownership of NFA firearms. Even if further state regulations do not exist, allowing an NFA firearm to cross state lines requires further action under the Federal Regulations.

Because of the strict regulations, a simple transfer by an executor or trustee to satisfy a bequest or distribution could subject the executor, trustee, heir, or beneficiary to criminal penalties. To simplify the process and lower the risks of inadvertent violation of the law, individuals can own NFA firearms in a trust specifically designed for the ownership and transfer of these firearms. Such trusts are commonly referred to as NFA Trusts, Firearms Trusts or Gun Trusts.

Not only do NFA Trusts reduce the risks associated with the handling of NFA firearms after an individual passes away but NFA Trusts can also be used to allow multiple individuals to lawfully possess and use an NFA firearm, which is not possible when an individual is the registered owner. When an individual owns an NFA firearm, allowing another individual to be in possession of the firearm even in the presence of the registered owner could subject both individuals to criminal penalties. An NFA Trust may name more than one Trustee who may lawfully possess the firearms owned by the Trust. The beneficiaries of the NFA Trust can also be permitted to use the firearms owned by the Trust.

Another benefit of using a Trust to own NFA firearms is the ability to name a minor, who could not otherwise lawfully possess the firearm, as a beneficiary. The Trust can be used to hold the firearm until the minor reaches the age required to lawfully own the firearm.

Finally, when registering a firearm to a Trust, the documentation requirements are simplified. No photo or fingerprints are required and the CLEO does not need to sign the Form 4.

Transfers of NFA firearms into a Trust will still be subject to a transfer tax. However, an NFA Trust may be used to purchase the firearm directly, thereby avoiding the need to pay the tax twice. Unlike the satisfaction of a bequest which is not subject to a transfer tax, when the firearm eventually comes out of the trust, the transfer will be subject to a transfer tax.


The National Firearms Act ("NFA"), 72nd Congress, Sess. 2, ch. 757, 48 Stat. 1236, enacted on June 26, 1934, currently codified as amended as 26 U.S.C. ch. 53.