USA – -(Ammoland.com)-Welcome back to The Legal Brief, the show where we CRUSH the various legal myths and misinformation surrounding various areas of the gun world. I’m your host Adam Kraut and today we’re talking about what happens to those NFA firearms after you die.
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As the popularity of National Firearms Act or NFA firearms has increased, the question of “what do I do with this stuff when I die?” is being asked more and more. You may have heard some of the good old wives tales that used to be whispered around gun shows like “you have to turn them over to the government” or “they can’t be passed on to anyone else”, etc.
In all reality, the disposition of the NFA firearms you own when you die is not very complicated. As you likely know, the two most common ways people choose to purchase NFA firearms are either as an individual or through a trust. The process is similar for both to a large degree.
When an individual dies, they either die with a will or intestate (without a will). If the person has a will and it directs where the firearms go, it makes life a little easier. If they don’t, it likely requires a lawyer to figure out how the state’s law requires property to be divided. Most people believe that if a couple are married without either having a will, everything goes to the spouse. That is actually not true, so you should probably look into getting a will.
In either event, the estate will have an executor or an administrator. ATF clarified in everybody’s favorite regulatory change, ATF 41F, that the executor or administrator is legally able to take possession of the NFA firearms while the estate is being probated. In the case of a properly drafted trust, there will be trustees who are still alive. They are also able to take possession of the firearms in order to administer the trust according to its provisions.
So what happens next? Well, there are two ways the NFA Firearm can transfer. One is tax free on a Form 5 and the other is a tax paid transfer on a Form 4. If an individual specifically names a person in their will or by operation of law (if they died intestate) the firearm transfers tax free on a Form 5. The same is true for a trust and a named beneficiary.
However, if the firearm is being transferred to a third party, someone not named as the recipient in a will, entitled to it by operation of law, or as a beneficiary of a trust, the firearm must transfer on a Form 4, which means someone is paying the $200 tax. It is ok for an estate or for trustees to sell the NFA Firearms if the legally entitled recipient does not want them. They, however, are entitled to the cash value of whatever they were sold for. Let’s be honest, some people in our lives may want cash rather than some silencers or machine guns, although I can’t imagine why.
I won’t cover filling out the Form 5 in this episode, but if you guys want to see that covered, let me know in the comments. As you probably have learned, your NFA firearms don’t just disappear into an abyss. They either go to your heirs, named recipients tax free or can be sold or given to a third party tax paid. It is important that you do take the time to make sure your affairs are in order. If you are an individual, strongly consider having a will drafted and not on the back of a napkin in a bar. They are not very expensive and ensure your things go where you want them to after you kick the bucket. If you’re using a trust, make sure it is drafted properly to ensure that someone is actually able to administer it, without requiring a court to appoint a trustee. Take a few moments to explain to your spouse, significant other or family how this stuff works, so if they find themselves in a position where it has to be dealt with, they are able to start down the right road or give the information to the lawyer to do it.
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Links for this episode:
- Email List: https://www.adamkraut.com/join-the-email-list/?rq=email%20list
- 27 C.F.R. 479.90a – Estates – https://www.law.cornell.edu/cfr/text/27/479.90a
- ATF Form 4 – https://www.atf.gov/firearms/docs/form/form-4-application-tax-paid-transfer-and-registration-firearm-atf-form-53204/download
- ATF Form 5 – https://www.atf.gov/firearms/docs/form/form-5-application-tax-exempt-transfer-and-registration-firearm-atf-form-53205/download