National Firearms Act (NFA) trusts have become a very popular way for people to own and use NFA firearms. If you’re new to the idea of NFA trusts, or NFA firearms, this Frequently Asked Questions page should provide a wealth of good background information.
General Information
What are Title II firearms?
What we think of as “normal” guns, whether they are pistols, rifles or shotguns, are Title I firearms. This refers to the section of federal law that regulates their manufacture and sale. Title II firearms are National Firearms Act firearms, including machine guns, short-barreled rifles, short-barreled shotguns, any other weapons, destructive devices and silencers. (Yes, silencers are “firearms” within the definition of the federal law that regulates them.) Some people refer to these firearms as “NFA” guns, referring to the National Firearms Act of 1934 that regulates them. Other people call them “Class III” firearms, because the type of dealer who can sell them is a Class III FFL.
What is NFA?
NFA stands for National Firearms Act. It refers to the National Firearms Act of 1934, which instituted a punitive tax for certain firearms: machine guns, silencers, short-barreled rifles, short-barreled shotguns, any other weapons and destructive devices. The $200 tax was a lot of money in 1934, and was designed to stop people from owning these firearms. Since the cost of the tax has not increased with inflation, ownership of these types of firearms is once again cost-effective, provided you’re willing to jump through a few hoops.
What is an NFA trust/gun trust?
A trust is a traditional estate planning document. The revocable living trust is a trust which can be revoked or changed as long as the creator is still alive. When people refer to an NFA trust or gun trust, they are referring to a revocable living trust which is being used to own particular types of firearms. By using a trust, some of the more thorny problems related to ownership of Title II firearms can be avoided.
Who is the BATFE/ATF?
The Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE or ATF) is the federal agency that is tasked with regulating firearms. When you submit your forms to get a tax stamp for a Title II firearm, the ATF processes the paperwork and issues the stamp. Their NFA branch is in West Virginia.
What is a Form 1?
The ATF’s Form 1 is the form that you must fill out if you want to make or manufacture a new Title II firearm. The registry is closed for machine guns, but all other types of Title II firearms can be legally manufactured by individuals. The tooling and machines required to make an effective suppressor may not be available to everyone, but many people manufacture their own short-barreled rifles by cutting down the barrel or installing a shorter barrel. If you want to put a barrel of less than 16 inches on your AR15, for instance, you will need to file a Form 1 with the ATF.
What is a Form 3?
The ATF’s Form 3 is a form used to transfer a Title II firearm from one Class III dealer to another, usually from outside of the state. If you buy a Title II firearm from outside your state, it will be transferred to your dealer on a Form 3.
What is a Form 4?
The ATF’s Form 4 is the form you must fill out to buy a Title II firearm. If you buy a silencer from your Class III dealer, you’ll fill out the Form 4. Once the ATF approves your application, you’ll receive the Form 4 back with a cancelled tax stamp on it, and then you can pick up your silencer from the dealer.
What is a Form 5?
The ATF’s Form 5 is used for the tax-free transfer of Title II firearms from a deceased person’s estate to their heirs. A Form 5 will be used to transfer the Title II firearms out of your trust once you die.
What is Form 5320.20?
You may not cross state lines with certain Title II firearms without ATF approval. This the form you submit to them for approval. It can be sent by fax, and comes back much more quickly than the other ATF forms listed. Silencers do not need an approved Form 5320.20 before you cross state lines. Every other type of Title II firearm requires this form. If you plan to shoot just across the border all the time, you can get approval from the ATF for a year-long period. Just submit the 5320.20 once a year. This form must also be submitted if you’re moving out of state.
What is eForms?
The ATF has created a website for electronic filing of certain forms.
What is a CLEO?
CLEO stands for chief law enforcement official. This is the person that has to be notified that you're applying for a tax stamp by sending them a copy of your ATF tax stamp application.
What is a Class III/Class 3 dealer?
In order to sell regular (Title I) firearms, you must have a federal firearms license (FFL). An FFL who sells Title II firearms must pay an additional Special Occupational Tax (SOT). To deal in NFA or Title II firearms, that SOT is a Class 3. (To make Title II firearms, the dealer must be a Class 2 SOT.) In shorthand, dealers in Title II firearms are often called Class III dealers. If you want to own Title II firearms, you’ll probably quickly become familiar with your local Class III dealer.
Questions About Trusts
What is the “trust loophole?”
Some people like to think of using trusts to acquire Title II firearms as a “loophole.” It’s not really a loophole, though. Trusts are simply a different, and completely valid, way to own Title II firearms. The ATF has publicly stated that they support the use of trusts to acquire Title II firearms.
What are the benefits of a trust?
The main benefit of owning Title II firearms through a trust is that you can have multiple trustees listed on the trust. Each trustee is legally allowed to be in sole possession of the Title II firearms owned by the trust. Unlike individual ownership, where the registered owner is the only one who can possess the Title II firearm by himself, a trust allows a situation where a married couple can both be in possession of a Title II firearm without the other person around.
How much will a trust cost me?
The cost for a do-it-yourself Wildcat Trust package is just $99, but we often have sales! This is the least expensive trust product on the market, but has the benefit of having been drafted by an attorney knowledgeable about the National Firearms Act. Since you are not getting specific legal advice from an attorney, but a fill-in-the-blank trust product, you pay much less than you would if you retained an attorney to do the same work.
What if I want to change or add trustees or beneficiaries later?
Your gun trust will be a type of trust called a “revocable living trust.” Revocable living trusts can be amended or modified at any time by you since you are the creator or “grantor.” That means that you can use a document called an “amendment of trust” to change your trustees or beneficiaries. An amendment form is included in your Wildcat Trust package.
Who should I list as trustees?
Trustees should live up to their name and be people you trust. It’s a very serious decision to make, in fact. It’s true that you, as the creator of the trust, can remove a trustee if necessary. However, while they are listed as trustees, these people have considerable power over the property in your trust. That’s why I recommend that my clients only list people as trustees that they absolutely trust to behave responsibly. Usually that’s limited to spouses and close family members, but ultimately it’s your decision, and if you trust your best friend like a brother, he can be listed as a trustee as well. All trustees can legally possess the Title II firearms in the trust without you present.
Why can’t I just use Quicken Willmaker/someone else’s trust?
The Wildcat Trust package was created by an attorney experienced in drafting NFA trusts for clients. Using the same NFA-specific trust language, the Wildcat Trust provides all of the protections as an attorney-drafted trust for a fraction of the price. All you have to do is input your personal information into the blanks in the fill-in PDF documents. As long as you follow the instructions provided in the accompanying guide, you will have a valid, legal trust that you can be confident will pass muster with the ATF.
Programs like Quicken Willmaker do not contain NFA-specific language. Further, trusts made with such programs will allow you to create a trust that is void and invalid by allowing, for instance, the same person to be a grantor, trustee and beneficiary. It is not the ATF’s job to make sure that your trust keeps you legal—it is yours.
The Wildcat Trust package is also the least expensive NFA-specific trust product on the market.
What makes using a trust superior to using a corporation to own Title II firearms?
Trusts have clear benefits over individual purchases of Title II firearms. Corporations are another possible way to own Title II firearms as well. Trusts are better than corporations for most people because of the additional difficulties that attend owning a corporation. A few states do require registration of trusts, but most do not. Corporations usually must be registered with the Secretary of State, file annual reports, and maintain a registered agent and registered office. Simply put, trusts are simpler and allow the same benefits as corporations.
Things you can own with a trust
What can I own with a trust?
Federal law and the laws of most states allow you to own silencers, machine guns, short-barreled rifles, short-barreled shotguns, destructive devices and “any other weapons” using a trust. (If you’re unsure of whether your state allows the ownership of NFA firearms, be sure to check before buying a Wildcat Trust package.)
Are these types of guns really legal?
Contrary to popular belief, silencers, machine guns and other exotic firearms are perfectly legal to own. They are simply more highly regulated. Most states have no laws prohibiting the ownership of Title II firearms. Federal law requires submission of a form and the payment of a tax before the firearm can be transferred or built.
What is a silencer?
Any device which reduces the noise of the discharge of a firearm by any measurable decibel reduction is a silencer. Although most silencers are not “Hollywood” quiet, many of them make firearms “hearing safe.” Anyone who can own a firearm can legally own or make a silencer by filing the correct forms with the ATF.
Is it a silencer or a suppressor?
Many people “in the know” refers to these devices as “suppressors,” especially since they don’t really “silence” a firearm completely. Suppressor is a perfectly acceptable term. The ATF and federal statutes use the term “silencer” because that is what they were originally called by their inventor, Hiram Maxim, who also created the automobile muffler.
What is a machine gun?
Whether it’s an M16, a GE mini-gun or a MAC 10, any firearm that discharges more than one shot with a single pull of a trigger is a machine gun. Machine guns are the most expensive type of Title II firearms, because the registry is closed to new guns. Only machine guns imported before 1968 or domestically manufactured before 1986 may be owned by private individuals. (Special types of firearms dealers can own newer machine guns, but they can’t sell them to anyone but the military or police.) Because the supply of legal machine guns is limited, their cost is quite high. The cheapest sheet-metal MAC-10 machine pistols are over $3000, and a transferable M16 may cost closer to $20,000. Unfortunately, the only way to get a legal machine gun is to pay the asking price and have it transferred to you on a Form 4. The ATF will not approve a Form 1 for a machine gun. When it comes to fully automatic firearms, if it sounds too good to be true, it probably is! The one exception to the machine gun category is the Gatling gun. Gatling guns may be commonly thought of as machine guns, but they use a crank to operate. Each partial revolution of the crank is thought of as an action of the trigger, so even newly manufactured Gatling guns are not considered machine guns. (However, if an electric motor were attached to the crank, it would become a machine gun.)
What is short-barreled rifle (SBR)?
A Title I rifle must have a barrel of at least 16 inches and an overall length of 26 inches (measured with any folding or collapsible stock extended). If you want a shorter rifle, it’s a short-barreled rifle and requires a tax stamp. The most popular firearm to make into an SBR is the AR15 because it is simple to switch to a shorter barrel. With the AR15, because the lower receiver is the registered part, you may register one receiver as an SBR and own multiple calibers or lengths of upper receivers. The ATF only asks that you notify them if you change the caliber or length “permanently” so that they can keep the registry up to date.
What is a short-barreled shotgun (SBS)?
A Title I shotgun must have a barrel of at least 18 inches. If you want a shorter shotgun, it’s a short-barreled shotgun. Shotguns with 14 inch or less barrels are popular for home defense because of their maneuverability. If a shotgun has only ever had a pistol-grip, it can be made into an Any Other Weapon instead. Short-barreled shotguns have shoulder stocks.
What is a destructive device?
A destructive device could be any number of things. Weapons with a bore larger than half an inch are destructive devices, except for shotguns which the government has deemed “suitable for sporting purposes.” That means that most 12-gauge shotguns are not destructive devices, since they are suitable for sporting purposes, but certain ones are. The “Street Sweeper” is a particular 12-gauge revolving shotgun, created for riot control purposes, that was deemed a destructive device. Rifles can also be destructive devices, such as the Lahti 20mm anti-tank rifle, which must be registered. Explosives are also destructive devices. Grenades, mines, bombs, rockets and missiles are all destructive devices, which can be legally owned if the tax stamp is paid. However, a separate $200 tax stamp must be paid for each one, and once you blow it up, that $200 is gone forever. One of the most common destructive devices is the 40mm grenade launcher, whether stand-alone or in M203 configuration for use under the barrel of an M16 or AR15. These launchers are a destructive device requiring a $200 tax stamp, as are any explosive rounds for them. However, non-explosive 40mm rounds are not destructive devices, meaning you can own and fire all the “chalk” rounds you want for your registered 40mm launcher without paying additional taxes.
What is an Any Other Weapon?
This is something of a catch-all category. Things like pen guns and cane guns fall into this category. The main thing most collectors might want to register as an AOW is a smooth-bore pistol. Shotguns with stocks (or that have EVER had a stock installed) can be made into short-barreled shotguns. But virgin shotgun receivers can be built with a pistol grip only and short barrel. These are registered as Any Other Weapons. Although there is some disagreement on the matter, the ATF also takes the position that a handgun with a vertical forward grip must be registered as an AOW. The AOW has one final difference from other categories of NFA items. Manufacturing or transferring all other NFA items requires a $200 tax. For the AOW, manufacturing is still a $200 tax, but a transfer is only a $5 tax.
The Process for Acquiring Title II Firearms
What fees do I have to pay to own Title II firearms?
There is no “license” to own Title II firearms. If you can own a regular firearm, you can own a Title II firearm. Each time you buy or make a Title II firearm, you must pay the ATF a $200 tax (except if you’re transferring an AOW, which is a mere $5 tax). Once the tax is paid, you do not have to pay any yearly fees or any other fees.
What is a tax stamp?
A tax stamp is an actual stamp that proves that you have paid the $200 tax to the ATF in order to legally own a Title II firearm. It will be affixed to your Form 1 or Form 4 and “cancelled.” It’s important to keep it in a safe place.
What should I do with my tax stamp?
Your tax stamp is the proof that you have paid the required tax to the ATF. It is very valuable document, and you should keep it in a safety deposit box or fire safe. Make a copy to keep with your firearm, just in case a law enforcement official ever wants to see it. If you lose your tax stamp, you could end up in real trouble. The ATF is supposed to keep a registry of all Title II firearms and their current owners, but the registry has been proven to be incomplete and out-of-date. It’s important to keep your own proof that you legally own your Title II firearms.
How long does it take to get Title II firearms?
The process for acquiring Title II firearms can be lengthy. Once you have your trust created and signed, you can submit a Form 1 or Form 4 to the ATF along with a check or money order for $200. The ATF will cash your check as soon as it receives it. (If your application is denied for any reason, you’ll get your money back.) The application must be reviewed by an examiner at the ATF office, and because of a backlog, this process seems to take 4-6 months on average. You may call the ATF during this time to check on the status of your application. You simply provide them with the serial number of the firearm and your trust’s name. During most of this time, the status will be “pending,” which really tells you nothing. Once your application is approved, the completed tax stamp is returned to you, and you can then pick up your Title II firearm from your dealer, or make your Title II firearm if you submitted a Form 1.