Closing the ‘Loophole’

Yesterday the New York Times ran an article on “Gun Trusts.” As can be imagined, the newspaper described the use of trusts as a ‘legal loophole’ for buying restricted firearms, and attempted to create a ‘need’ to react. Nothing could be further from the truth.

Items purchased by a trust are still registered, and the Federal Government knows where they are located. Describing this level of control as a ‘loophole’ is a bit of a stretch.

However, even if this is a ‘loophole’ it is worth remembering the words of Ludwig Von Mises: “Capitalism breathes through those loopholes.” Without true ‘loopholes’ this country would not function. The politicians know this, and that is why ‘loopholes’ are included in any law. See Rothbard on Loopholes.

Back to trusts. The use of a trust does not magically make new firearms available to an individual. State laws still apply to a trust and illegal items cannot be purchased through the trust. Try buying a suppressor in trust in California. It will not work. What a trust allows is the equal protection of the laws to everyone within a jurisdiction. Besides being a primary principle of the Fourteenth Amendment this is a basic requirement of a free republic.

Without a trust, purchasing a NFA firearm requires the approval of the local Chief Law Enforcement Officer (CLEO). There is no guidance on who should or should not be approved, and there is no mechanism to allow for review of decisions. Instead the ability to veto the exercise of a constitutional right is placed in the hands of a local bureaucrat without any accountability or restrictions. Any veto power over the First Amendment of this nature would not, rightfully, stand a chance in court.  Yet this law restricting the Second Amendment has been around since 1934.

The article further lamented the lack of ‘background checks’ on trusts. Transfers to trusts do not require submitting fingerprints, but it is worth noting that trusts do not have fingerprints. Trusts do have trustees, and the ATF requires full copies of a trust for every transfer. A NICS background check takes three days at most. A NFA transfer takes upwards of nine months. It is safe to say the ATF can do a background check on every trustee of the trust and still have time to spare. (I would bet they already do this, and if they do not, it will not take an executive order to implement. And anyone already going through a NFA transfer really will not care if a background check is performed. )

Purchasing a NFA firearm is serious business. The use of a trust eases the restrictions on who may possess the firearm, it speeds up the transfer time, it ensures equality before the law, and it provides a convenient and predictable control of your firearms after your death. It does not allow the purchaser to skip background checks, it does not allow for tax free transfers, and it does not provide unregistered firearms. Every NFA firearm, rather owned by a trust, a company, or an individual is registered with the Federal Government and a list of their locations is kept by the ATF. This is not a loophole. It is a restriction on liberty that is slightly less onerous than individual ownership, and for some that is enough justification to use a trust.