Federal, state and local laws may impact your ownership, possession and transfer of firearms. In order to comply with the laws concerning the transfer of firearms, many owners have created gun trusts to allow them to legally transfer their firearms to their beneficiaries.
A gun trust is sometimes called a NFA Gun Trust because they cover weapons under the National Firearms Act (amended by Title II under the Gun Control Act of 1968 and the Firearms Protection Act of 1986).
Gun trusts can also protect you in the event you are incapacitated or can be utilized in your broader estate planning. For example, your family may have a collection of guns that have been passed down through generations. You want the guns to stay in the family and be passed down to future generations as well.
A gun trust will allow you to transfer the guns to your heirs as intended and ensure that they do not inadvertently break the law by receiving them. As with any trust, it is important to consult with an attorney who has experience forming these types of trusts. An improperly created trust can result in serious legal consequences for your beneficiaries.
What are the Advantages of a Gun Trust?
Besides allowing the transfer of firearms that comply with the law and avoiding probate, a gun trust that remains in effect after your death has other advantages. The NFA was enacted to control or discourage transactions involving firearms because of their frequent use in criminal activities. The NFA sets a $200 transfer tax, requires filing certain paperwork and submitting to local law enforcement.
However, because the firearms are being held in trust, the NFA transfer requirements should not apply to the beneficiary of these gifts. As well, the gun trust protects the executor, trustee and heirs of your estate who may not be familiar with gun laws and who may inadvertently violate the law by receiving your firearms.
A gun trust also allows you to name more than one person to possess the firearms under the trust and, to some extent, may offer protection from future changes in the law.
What are the Elements of a Gun Trust?
Trusts can be revocable or irrevocable. A gun trust allows the grantor to transfer possession of their guns under the circumstances chosen by the grantor. For example, if the gun owner is incapacitated, they may wish to set up a revocable trust which can be modified during their lifetime and will allow the gun owner to be named as trustee. If the gun owner intends to permanently transfer the guns to their heirs, they may want to set up an irrevocable trust that cannot be altered once created.
Whether a trust is irrevocable or revocable, it should be created with all the formalities required under the laws where the grantor resides. The trust should state that the owner’s specific purpose in setting up the trust is to comply with the NFA and other identified laws.
The grantor will name an eligible trustee (including successor trustees). Eligible trustees should be persons who are allowed to own guns under the applicable laws that the trust was set up to comply with. The trust should include explicit language as to whether it is a revocable or irrevocable trust and the conditions under which modifications may be made and by whom.
The grantor should carefully identify the firearms that are to be held in trust. The grantor may include an attachment or schedule to the trust listing the firearms. The trust should also include language to allow the trustee to be able to satisfy the goal of the trust.
For example, the trustee may need to undertake a criminal check to determine if the heirs can own firearms under the law. If the intended heirs cannot own the firearms legally, the trustee may be charged with disposing the firearms in another manner that complies with the law.
Read More About: How to Create a Trust
How Should I Prepare Myself When Setting Up a Gun Trust?
Before meeting with an attorney to help you set up your gun trust, be prepared with the following information:
- Who do you want to name as the initial trustee?
- What is the contact information for the executor, trustee, successor trustees, and beneficiaries?
- Is each beneficiary legally eligible to possess the firearm?
- Have you completed a list of firearms that will be transferred?
Your attorney may require additional information but this checklist is a good start.
Should I Consult an Attorney If I Want to Setup a Gun Trust?
The purpose of gun trust is to allow you to transfer your firearms to your heirs and have them take possession without violating the law. Though similar to a regular trust, there are differences. Therefore, you should consult with an experienced estate plan attorney to help answer your questions and set up a gun trust that works for you.