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How the DOJ’s New Regulatory Framework for Gun Trusts Managed to Strike a Reasonable Balance

On January 15, 2016, the Department of Justice (DOJ) issued a final rule[i] that fundamentally changed the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) regulatory environment for items that are manufactured and transferred under the National Firearms Act (NFA) – namely: automatic weapons, silencers, and suppressors.

But amongst all of the recent gun control rhetoric, I believe the DOJ managed to strike a reasonable balance by both allowing some individuals easier access in obtaining NFA items and requiring more individuals be subject to ATF-level background checks.

New Background Check Requirement for Responsible Persons of a Trust

Currently, all persons who individually apply to the ATF for the manufacture or transfer of an NFA item must submit photographs and fingerprints to the ATF, in order for the ATF to run a background check before approving the transfer application. The individual must also submit a certification of legal compliance from the local chief law enforcement officer (CLEO), who is often the county sheriff where the person resides. But the CLEO is under no legal obligation to certify an application, and many do not for political reasons.

However, in what the current executive branch saw as a loophole, the current federal regulations do not require an ATF-level background check or CLEO certification when the owner of the NFA item will be a trust or other legal entity.

In order to close this loophole, the new regulations that go into effect on July 13, 2016, will now require that all “responsible persons” of a trust must submit photographs and fingerprints with each NFA transfer application to the ATF, in order for the ATF to run a background check before approval of the transfer.

How will the new regulations impact the use of gun trusts?

In my experience, the vast majority of clients who form gun trusts do so for one or more of the following three reasons: 1) the chief law enforcement officer where they live will not certify transfers, 2) the trust is an estate planning tool for transfer of NFA items upon death, or 3) a desire to allow other persons (normally a spouse or kids) to use the NFA items. The new regulations impact all three of these gun trust purposes, which we will review in order:

  1. Chief Law Enforcement Officer (CLEO) certification is no longer necessary for individuals or trusts.

The DOJ recognized that expanding the CLEO certification to gun trusts would effectively stop many Americans from owning NFA items because a CLEO is under no legal duty to certify any NFA transfer. Therefore, the DOJ wisely chose to remove the CLEO certification requirement for all NFA transfers, including individuals. In its place, all NFA applicants must now simply send a notification form to the local CLEO.

I predict this change will lead to a reduction in the use of gun trusts because the application process is now the same for individuals and trustees of a gun trust, with many gun trust applications being done for the sole purpose of avoiding CLEO certification.

  1. A Personal Representative transfer to a beneficiary in a probate estate is tax-free.

The final rule makes clear that when an individual who owns NFA items passes away, the personal representative of the deceased’s estate is allowed to possess the items during probate administration. If the items pass to a beneficiary named in the deceased’s will, or to an heir through intestate succession, the new owner is not subject to the $200 tax stamp for NFA item transfers.

This does not change the current informal practice of the ATF, but does give certainty to the personal representative’s right of possession and tax-free transfer, which may lead to a reduction in gun trust applications when combined with the CLEO certification removal.

  1. A beneficiary with a current right of possession is a “responsible person” for background check purposes.

With the new regulation requiring that all “responsible persons” of a trust submit to a background check, the natural question going forward will be: Who exactly is a responsible person?

As defined in the regulations, a responsible person is anyone named in a trust who “possesses, directly or indirectly, the power or authority under any trust instrument, or under State law, to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust.”[ii]

Obviously, this will include the current trustees of the trust. But many gun trusts are set up to provide for a single trustee, and many current beneficiaries who have the right to possess the items (as noted above, most commonly clients will name their spouse and adult kids as beneficiaries of the trust with the right of current possession).

The DOJ’s commentary to the final rule makes clear that any person with the right to possess the NFA items owned by the trust is subject to the new background check requirements, but any beneficiary who does not have the right to possession until death of the trust grantor (such as a young child) does not have to submit photographs and fingerprints.

What about the addition of a new “responsible person” to the gun trust?

One of my initial questions in reading the final rule is what would happen when the grantor or trustee of the gun trust wanted to add a new co-trustee or beneficiary with the right of possession? Would that new individual need to submit to a background check as a responsible person?

In somewhat of a surprise, the DOJ said no…“The Department is not requiring, in this final rule, that new responsible persons submit a Form 5320.23 within 30 days of any change of responsible persons at a trust or legal entity.”[iii] (But if the trust has different responsible persons the next time it applies to the ATF, the new persons will be subject to the background check.)

Unless further clarification is received from the DOJ, it appears that an individual can submit a gun trust application with only themselves as a responsible person, and then add responsible persons to the trust after the application is approved by the ATF (so long as the original applicant remains a trustee in control of the weapons).


The two major changes made by the DOJ from the proposed rule to the final rule (changing CLEO approval from certification to notification, and removing non-possessory beneficiaries from the definition of a responsible person) show the DOJ truly listened to the reasonable concerns that were raised in the 9,500+ comments they received. I believe the final rule strikes a very workable balance between a person’s right to own an NFA item and the current administration’s desire to make sure the items are not possessed by a person prohibited by law from owning NFA items.

I predict that going forward gun trusts will still hold an important role in the ownership and use of NFA items, with the primary reason being the desire of a client to legally allow other family members and close friends to use the NFA items.

For more information about the gun trust legal services that Attorney Adam Zuwerink and West Michigan Law provide, please visit our original blog post on gun trusts.

[i] 81 FR 2657,

[ii] Id,, at 2721.

[iii] Id., at 2713.