Properly Transferring Title I Firearms to Your Trust
The Colorado Red Flag bill is on its way to becoming law. The Colorado Red Flag Bill allows the Court to issue an order requiring you to surrender your firearms. As set forth in a previous article, your firearms trust may provide additional protection from confiscation. For that reason, many people are transferring their Title I firearms to their properly drafted Colorado firearms trust.
When making a trust firearm purchase or transferring a firearm to a trust, make sure Form 4473 is properly filled out by (1) following instruction 1 (2) making the purchase leaving a proper paper trail, and (3) signing the Form 4473 with “YOUR NAME, Trustee of the [Insert name of trust]”. Otherwise, there may be no proof that the transfer was to the trust and not the individual picking up the firearm.
Over the last 20 years, firearm trusts became the preferred way to hold Title II firearms. Title II firearms are regulated by the National Firearms Act (NFA). To purchase a Title II firearm requires an application to the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). The ATF issues a tax stamp identifying the person entitled to possession of the Title II firearms. In the case of a trust, that “person” is the trust and then specific individuals may be listed on the tax stamp as responsible persons. The fact that the transfer is to the trust should be clear on the face of the application for the firearm and the tax stamp. Therefore, even if the purchase is not made with a trust financial account, there is evidence that the trust is the NFA firearm owner.
Title I firearms are firearms you can buy at your typical sporting goods store. A Title I firearm does not require a tax stamp from the ATF. Whether buying a Title I or Title II firearm, the dealer will run a specialized background check on the individual taking possession of the firearm. In our experience, this background check is not done in a way that properly documents a firearm purchase by a trust.
ATF Form 4473 is the form used to make a background check. Form 4473 is a background check on the individual taking possession of the firearm. In the case of a trust making the purchase, two problems arise. First, there may be multiple trustees and only one trustee can get the required background check on a Form 4473. Second, Form 4473 contemplates a transfer to that individual – as in they are making an individual purchase for themselves and not an entity like a trust. Therefore, even if the other trustees wanted to get a background check, without careful attention, the paper trail looks like a transfer to that individual in their individual capacity. For example, a trust with three trustees (Adam, Bill, and Charlotte) making a purchase of a Title I firearm and wanting to ensure all three trustees could lawfully be in possession under Colorado law would have to run three separate background checks. However, if not careful, the paper trail could look like an initial purchase by Adam, then a transfer to Bill via Form 4473 and then another transfer to Charlotte on her Form 4473.
In the context of Title II (NFA) firearms, the issue is not as critical because Adam, Bill and Charlotte would all be listed on the tax stamp as responsible persons, and the tax stamp is issued in the name of the trust. However, in the context of a Title I firearm, there is no official document evidencing ownership by the trust and who within the trust is entitled to possession. This can become important when local law enforcement wants to confiscate your firearms pursuant to the Colorado Red Flag Bill and an Extreme Risk Protection Order.
As we laid out in a previous article, in a properly drafted and modern firearm trust, there should be specific provisions expelling a trustee who becomes subject to an extreme risk protection order. The argument to law enforcement standing on your doorstep would be you are not in possession, custody, or control of any trust-owned firearm because upon the issuance of the order any right you had to possession, custody, or control was revoked. Ok, but let’s talk about the reality of the situation. Assuming the firearms are in your abode, the law enforcement officer is probably going to err on the side of searching and taking the firearms and letting his boss sort it out. This means that your co-trustees (or successor trustee) must convince law enforcement to return the firearms to them. Without a proper paper trail, I don’t see that happening.
The Colorado Red Flag Bill specifically allows for the firearm’s return to the lawful owner. However, the determination of who is the lawful owner appears to be in the discretion of law enforcement. Legality of this delegation of decision making aside, at a minimum, the trustee would have to prove ownership by the trust.
