- Posted February 5, 2016 at 12:25 AM
- Categories Estates & Trusts
What is a Gun Trust?
A Gun Trust is a trust created specifically to own firearms in compliance with the National Firearms Act (NFA) and specific state and local laws. The purposes of a Gun Trust are several fold: it reduces the red tape necessary to acquire certain firearms, it allows the beneficiaries to use and enjoy the firearms, and it avoids the difficulties of transferring firearms on the death of a primary beneficiary.
If an individual wishes to acquire certain firearms, federal law requires that he or she must be fingerprinted, have background checks performed, and have the Chief Law Enforcement Officer (CLEO) in the individual’s jurisdiction sign off on the necessary paperwork and send to the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). This red tape is not only burdensome, but in many jurisdictions, CLEO’s simply refuse to sign off on the necessary paperwork. These requirements currently only apply to individuals and not to entities.
Why Create a Gun Trust?
By creating a proper Gun Trust, the trust itself (an entity) can own the firearms thus avoiding much of the red tape that an individual would go through. If drafted properly, a Gun Trust can avoid a transfer upon the death of a primary beneficiary (as the trust itself continues to own the firearms).
Gun Trusts have been gaining in popularity. According to the ATF, the Bureau received over 235,000 NFA applications in 2014. The rise in the use of Gun Trusts has caused the ATF to adopt a new regulation (27 CFR Part 479 Docket No. ATF 41F; AG Order No. 3608-2016) which will require Gun Trusts to comply with the same requirements as individuals on the transfer of certain firearms occurring after July 13, 2016. This means that transfers into Gun Trusts after July 13, 2016 will require fingerprints, background checks, and CLEO approval.
Concerned about the upcoming regulatory change, many gun owners are now creating Gun Trusts and are transferring their firearms into one or more Gun Trusts prior to July of 2016. While the next several months present an excellent planning opportunity to establish a Gun Trust and transfer firearms into that trust before the regulatory change takes effect, care must be taken in establishing a proper Gun Trust.
Many people have tried to use garden variety revocable trusts (also known as living trusts) or have obtained forms over the internet. Keep in mind that a copy of the executed Gun Trust must be submitted to the ATF along with the transfer application and the Gun Trust needs to comply with federal law as well as applicable state and local law. Many generic revocable trusts and internet forms do not meet these requirements.
The law firm of Miller, Miller and Canby has been assisting clients with their estate planning needs for 70 years. Our estate planning attorneys continuously take continuing legal education courses to stay on top of new developments in this area of law, including the regulatory changes concerning Gun Trusts. Glenn Anderson heads the Trusts and Estates Practice Group at Miller, Miller & Canby and has recently completed several continuing legal education courses on Gun Trusts. Contact Glenn Anderson here.
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