Subject: Trusts Offer a Legal Loophole for Buying Restricted Guns
From: "Molly Magarik" <[email-masked]>
To: "Jim Smith" <[email-masked]>, "Hunter Biden" <[email-masked]>, "Kaufman Ted" <[email-masked]>, "Eric Schwerin" <[email-masked]>, "Alexander Snyder-Mackler" <[email-masked]>, "Josh Alcorn" <[email-masked]>
Date: Mon, 25 Feb 2013 16:39:09 -0500

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February 25, 2013
Trusts Offer a Legal Loophole for Buying Restricted
Guns<http://www.nytimes.com/2013/02/26/us/in-gun-trusts-a-legal-loophole-for-restricted-firearms.html?nl=afternoonupdate&emc=edit_au_20130225>
By
ERICA GOODE<http://topics.nytimes.com/top/reference/timestopics/people/g/erica_goode/index.html>

A growing number of shooting enthusiasts are creating legal trusts to
acquire fully automatic guns, silencers or other firearms whose sale is
restricted by federal law — a mechanism that bypasses the need to obtain
law enforcement approval or even criminal background checks.

The trusts, called gun trusts, are intended to allow owners of the firearms
to share them legally with family members and to pass them down
responsibly. They have gained in popularity, gun owners say, in part
because they may offer protection from future legislation intended to
prohibit the possession or sale of the firearms.

But because of a loophole in federal regulations, buying restricted
firearms through a trust also exempts the trust’s members from requirements
that apply to individual buyers, including being fingerprinted, obtaining
the approval of a chief local law enforcement officer and undergoing a
background check.

Lawyers who handle the trusts and gun owners who have used them say that
the majority of customers who buy restricted firearms through trusts do not
do so to avoid such requirements. And most gun dealers continue to require
background checks for the representative of the trust who picks up the
firearm. But not all do. Christopher J. Dorner, the former Los Angeles
police officer who embarked on a weeklong assault on law enforcement
officers this month that ended with his
death<http://www.nytimes.com/2013/02/13/us/officials-report-shootout-with-fugitive-ex-officer.html>on
Feb. 12, said in a rambling 11,000-word manifesto that he had used a
gun
trust to buy silencers and a short-barreled rifle from a gun store in
Nevada without a background check.

Referring to a computer program available from the personal finance
software company Quicken, Mr. Dorner wrote, “I was able to use a trust
account that I created on quicken will maker and a $10 notary charge at a
mailbox etc. to obtain them legally.” Mr. Dorner was not a felon and
probably would have passed a background check had he received one.

Mike Campbell, a spokesman for the Bureau of Alcohol, Tobacco, Firearms and
Explosives, which enforces firearms regulations, said that applications
filed with the A.T.F. for transfers of restricted firearms to trusts or
corporations have more than doubled in the last four years, to more than
39,000 in 2012 from about 15,000 in 2008. He said the increase was largely
attributable to the growth in the number of trusts.

Mr. Campbell confirmed that under current regulations, background checks
were not required for the buying of restricted firearms through trusts. He
added that the agency was aware of the loophole and was reviewing changes
to close it.

Lawyers who prepare gun trusts said requests for the documents had been
increasing in recent months as proposals for gun legislation proliferated
in state legislatures and on Capitol Hill. They said some gun owners were
even creating trusts for nonrestricted firearms like semiautomatic rifles
and pistols, hoping to protect them against the specter of future
legislation.

The cost of setting up a trust can vary from a small sum for an online form
to $100 to $2,500 in lawyers’ fees, depending on location and the type of
trust.

The sale and possession of silencers, fully automatic guns manufactured
before 1986 and other firearms and accessories that fall under the 1934
National Firearms Act are legal in many states. But the A.T.F. keeps a
registry of the firearms and must approve their sale, a process that can
take several months, and the buyer must pay a $200 tax.

J.W. Hagan, a computer administrator in Jacksonville, Fla., said he created
a trust to buy silencers, which have become popular for target shooting and
hunting and can be owned legally in a growing number of states. He said the
trust would ensure that if he died, his firearms would remain legal. The
trust would also allow his fiancée to use the silencers once the couple
married.

“If I didn’t have a trust, she wouldn’t even be able to have the password
for my safe,” he said.

David Goldman, an estate lawyer in Jacksonville who pioneered the use of
gun trusts six years ago, said most dealers carried out background checks
for restricted firearms, just as they did for other customers buying
firearms. He called the notion that criminals might use the trusts to buy
the firearms through a dealer “ridiculous.”

“Illegal versions of these items are not only cheaper,” he said, “but you
can obtain them six months faster, and you don’t have to form a trust,
which could be $500 or $1,000 depending on level, and you don’t have to
tell the A.T.F. about it.”

Mr. Goldman, who has prepared several thousand gun trusts and teaches
courses on their use, said that the trusts have many benefits, like
ensuring that firearms were passed on responsibly when an owner dies,
keeping them from falling into the wrong hands in a difficult divorce or
helping to negotiate moves to other states that might have different gun
laws.

“There was never a proper way of dealing with firearms with estate planning
and whether beneficiaries were appropriate to receive them,” Mr. Goldman
said.

Gun owners also turn to trusts, other lawyers who handle them said, because
in many jurisdictions, law enforcement officials refuse to sign off on the
purchase of restricted firearms, making it difficult or impossible for
enthusiasts to buy them as individuals.

Brian Reynolds, a lawyer in Denver, said he had prepared several gun
trusts, mostly for people who wanted to buy silencers for long-range target
shooting. But in many parts of Colorado, he said, sheriffs and police
chiefs will not approve such purchases.

“By having a trust, you bypass the need to get that authorization,” Mr.
Reynolds said.

However, Jim Bueermann, the president of the Police
Foundation<http://www.policefoundation.org/>,
a research organization in Washington, said, “My guess is that the majority
of police chiefs would agree that there is a reason why, as a general rule,
people are prohibited from owning silencers, machine guns and what we would
call sawed-off rifles or shotguns.”

Mr. Bueermann said he was especially concerned about the loophole in A.T.F.
regulations that made it possible to buy restricted firearms without a
background check and that he thought most Americans would find this
shocking. The A.T.F.'s regulations, in fact, exempt trusts from background
checks, as noted in the Federal Firearms Regulations Reference
Guide<http://www.atf.gov/publications/download/p/atf-p-5300-4.pdf>,
known as the White Book, and on the forms for gun sales that dealers file
to the agency. (In one publication, its handbook on the National Firearms
Act, the agency does say that the trust representative who picks up a
restricted firearm at a dealer must have a background check, but that
deviates from what the regulations require, the A.T.F. confirmed.)

Many dealers conduct checks anyway. But others take the government at its
word. One dealer, for example, said he did not think he had to run
background checks for sales to trusts because Form 4473, the record of the
transaction filled out by the dealer and the customer and sent the A.T.F.,
specifically lists trust transfers of restricted firearms as an exception
to the requirement for background checks.

Bob Irwin, who owns the Gun Store in Las Vegas, said his store always
performed background checks for firearm purchases involving trusts — the
store has handled three so far this year — but he was aware that some
dealers did not.

The gaps in the law that allow such lapses, he said, are “astronomically
stupid.”

“That really is a loophole,” Mr. Irwin said. “I can certainly see how a
felon could wind his way through it and end up with machine guns.=9