BATFE Approves INVALID Trust

In an extremely disconcerting scenario, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE) has approved an application to make an NFA firearm, while acknowledging that the trust was not valid. As posted on Silencertalk.com,

“Well I just got back two approved form 1 SBR’s and on the back of one of my forms it is highlighted and says ‘consult counsel w/ the filing of your trust, proves to be invalid’

To see the entire post, click here. This is extremely disconcerting on several levels. To begin with, at this time, we do not know why the trust was “invalid;” however, he did use Quicken, which I have posted should never be used with a Gun (NFA) Trust. The individual who posted the above is going to consult an attorney regarding the validity of his trust. He also has posted that he had a co-trustee who was a minor, but that would not make the trust, outside of the NFA realm, invalid. Any individual over the age of 18 can possess/own and be the trustee of a Gun (NFA) Trust. Moreover, if the trust is properly drafted, a person of any age can be the beneficiary, so long as, the trust has a provision to hold the NFA firearm(s) until the beneficiary reaches the age of 18 or of a maturity level demonstrating the ability to own/possess NFA firearms.

The more concerning aspect to the BATFE’s approval, while acknowledging the invalidity of the trust, is that if the trust is, in fact, invalid, no transfer can take place. If the trust was not established pursuant to the laws of the state, it is not a legal entity that can own or possess any asset, let alone NFA firearms. Hence, even if the individual who posted the above amended his trust, the transfer would have been invalid and would allow for the BATFE to commence with a forfeiture action, as well as, the possibility of charging anyone who is in possession of the NFA firearms (invalid trustees) with illegal possession of a NFA firearm.

The most disconcerting part is the fact that the BATFE previously approved the making of two SBRs to this trust about a year ago. The poster stated, “First off, I already have two SBR’s on the trust. Have had them for about a year, they form 1’d no problem. Second I don’t understand why they would now decide there is something wrong with my trust.” As I have stated for over a year now, the BATFE’s determination of trust validity does NOT ensure the validity of your trust. You cannot rely on the BATFE’s interpretation and determinations of state law. The BATFE has in the past approved the transfer of machine guns, even numerous times, and years or even decades later brought a forfeiture action against the current owner because the firearm should have never been registered in the first place.

So, why would the BATFE do this? No one knows for sure, but I have warned of the possibility of forfeiture actions related to invalid Quicken/Legal Zoom trusts in the past. Moreover, to understand the interworking of the BATFE, one must understand the goal of all administrative agencies. They survive on appropriations. To go before the Congress and request additional money, year after year, theBATFE must show that they are taking guns off the street and reducing crime. This means, the BATFE may push to prosecute cases that should not be prosecuted, solely for purpose of gaining convictions or demonstrating to the Congress that it is actively pursuing illegal activity. With this scenario, the BATFE could clearly commence a forfeiture action and likely be successful. Thus, they could show the Congress that they took another machinegun off the streets….something that most Congressional leaders would applaud.

While I am not a conspiracy theorist, I can see no other reason for theBATFE to approve the transfer to a non-legal entity. Amending the trust after the fact, would not make the trust valid at the time of the approval. If anyone has comments on possible reasons for theBATFE’s actions, please feel free to post and we’ll discuss them. Some have brought up the possibility of error, which doesn’t make sense, since the words were handwritten. The more likely error is that theBATFE meant to check “Disapproved.” We have seen several applications returned that were “disapproved” because the applicant used a legally insufficient trust; however, we have never seen an application approved, where the BATFE acknowledged that the trust was invalid because the BATFE would be approving the making/transfer to a non-legal entity.

The underlying issue that most on the internet don’t want to hear is that this could have all been prevented by paying a competent NFAattorney to draft a valid trust. The individual who posted this issue is in a very tough spot because the BATFE has approved the transfer to his invalid trust. An individual who finds him/herself in such a position would be best advised to void the transfer (you will eventually get your $200 back) and resubmit the transfer once the trust is valid. This will ensure that the BATFE cannot commence with a forfeiture action.

UPDATE The individual who posted the above was in Afghanistan and working off the information that his family members gave him. He asked them to scan the Form 1s, and he found out that the applications to make the two SBRs were “Disapproved.” However, and quite concerning, as stated previously, this “invalid trust” already was approved approximately a year prior to for two SBRs, which were already built. We will keep this updated as more information comes to light.

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Filed under Firearms Law, Gun Trusts

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