There never was such a thing.
Some people claimed that somehow gun trusts provided legal loopholes for criminals to purchase firearms. They seemed to conveniently ignore the fact that criminals don’t bother with gun trusts because …(I know this is shocking)… criminals don’t need gun trusts to obtain weapons!
The truth is that everyone connected to the gun trust – the Trustmaker, the Trustees, and the Beneficiaries (who have possession) – must be qualified under federal, state, and local laws to receive and possess firearms. This law is the same whether you buy a NFA weapon as an individual, a trust, or a corporation.
The so-called “loophole” was the 75-year old ATF rule that allowed entities such as trusts and corporations to bypass the CLEO certification requirement and to forego the hassle of submitting photos and fingerprints. This exception was specifically written into the existing laws – twice!
But despite the exception, no reputable gun dealer would allow a Trustee walk out of his shop with a firearm without doing an instant NICS background check – just as he would with any other firearm purchaser in the U.S.
Back in 1934 and 1968, instant computerized background checks (NICS) didn’t exist. Now they do, so the CLEO and photo/fingerprint requirements are simply archaic holdovers from the past.
Sadly, instead of bringing the requirements for individual purchasers of NFA firearms into the 21st century, as of July 13, 2016, the Obama administration instead chose to subject gun trusts to the archaic requirements of the 1960s. In the name of closing a non-existent loophole, lawful gun owners are now subjected to more paperwork and needless expenses.
Additionally, revocable gun trusts provide no protection from personal liability. If you – or someone in possession of your NFA firearm – violates the law or hurts someone else while using, transporting, or transferring your NFA firearm, you could be held legally responsible, just as you would if you owned the weapon in your individual name.