Gun Trusts for Estate Planning
In 1934, the government enacted the National Firearms Act (NFA) as an effort to stop gangster activity. In particular, the government used its taxing arm to arrest gangsters for being in possession of improperly registered or transferred weapons. The NFA was designed to govern the transfer of permissible weapons, to bar certain persons from possessing any firearms and to regulate possession of certain weapons.
In particular, the NFA regulates Title II weapons (referred to as Title II weapons because they are regulated under Title II of the 1968 Gun Control Act) and are also known as Class 3 or NFA weapons. These weapons include machine guns, silencers, short or short-barreled shotguns, short or short-barreled rifles, destructive devices (i.e., grenades or bombs), and “any other weapon.” The most commonly owned NFA weapon is the machine gun defined as “any weapon which shoots, is designed to shoot, or can be readily restored to shoot, automatically more than one shot, without manual reloading, by a single function of the trigger.” Only a registered owner of an NFA weapon may be in possession of that weapon. Illegal possession of an NFA firearm can result in a prison sentence of up to 10 years and/or a fine of up to $250,000.
Traditional estate planning can cause problems when dealing with firearms because the typical documents used to handle your real estate, bank accounts, and stocks, often instruct executors and trustees to do things which violate federal, state and local firearm laws when applied to the transfer, possession, and use of firearms. A Gun Trust is an estate planning document designed to help you acquire, manage, use, and transfer firearms, including those restricted by the NFA while protecting your family and executor from inadvertent violations of state and federal laws.
“State and Federal laws define who and how individuals, business entities, and trusts can purchase, possess, use and transfer firearms. In addition to the legal requirements, there are moral and ethical issues that gun owners consider before giving someone a firearm. A Gun Trust allows you to instruct others on how to evaluate the relevant factors such as the geographic location of the firearms, the location of the beneficiary, the legal status of the beneficiary, and the maturity and responsibility of the beneficiary before giving your guns to someone who may not be appropriate.” (Per David M. Goldman on www.guntrustlawyer.com)
Unfortunately the decision of the appropriateness of the beneficiary is made after your death and without your personal oversight. It is for this reason that a Gun Trust must consider your desires and objectives and not place your family and friends at risk of breaking the law when they follow your instructions.
Transfer of a Title II NFA firearm to an individual is a long process. Because an improper transfer can result in major fines and jail time, and there is a zero tolerance policy for violations; an executor must take the transfer of these weapons very seriously. Transferring, possessing, or receiving an NFA weapon that is not legally registered is a criminal act. The first job of the executor, therefore, is to determine whether the NFA weapon is registered. Any unregistered firearms should be handed over to law enforcement immediately and cannot be retroactively registered by the estate. Once a weapon has been determined to be registered, then the executor must register the firearm to him or herself. The transfer requires completing the Bureau of Alcohol, Tobacco and Firearms (ATF) Form 4, paying any required taxes and fees, and obtaining a signed law enforcement certification from the chief law enforcement officer of your jurisdiction.
Chief law enforcement officers in many (perhaps most) jurisdictions have stopped signing the law enforcement certification without cause. This is a problem because there is no way to force the chief law enforcement officers to sign the document.
What is the solution? A Gun Trust. The NFA defines “individual” to include corporations, trusts and other similar legal entities. Since a registered firearm can be registered to an individual, it can be transferred to a trust. Trusts, unlike individual persons, are not required to obtain permission from their local chief law enforcement officer.
Any trustee may use and possess the firearm. However, each trustee is jointly and severally liable for all of the actions of co-trustees.
Beware of creating a Gun Trust by using internet forms or free forms provided by gun dealers. Often these forms don’t even establish a lawful trust. If the trust does not legally exist, regardless of whether the ATF approved the transfer to the trust, the named trustee would be in unlawful possession subject to the NFA penalties. ATF approval of a purchase by a trust does not shield purchasers if a problem with the trust is later discovered. Consult an attorney experienced in these matters and make sure that the firearms are not put at risk of seizure and that neither you nor your co-trustees are at risk of violating the NFA.
Another reason for a Gun Trust is the ability to draft it such that the trust will continue to hold the firearms until the beneficiary comes of age or until the trustee determines that the beneficiary is of such maturity that he/she can assume the responsibilities of ownership. For more information, find Joshua G. Prince at www.pafirearmslawyer.com.