Estate Planning and Trusts Blog

Why Have a Gun Trust?

A gun trust is the best way to own an NFA firearm.
There are still many good reasons to have a gun trust.

On July 13, 2016, the ATF changed the Rules that had been in place for decades regarding the transfers of NFA/Title II weapons. The new Rules eliminated the requirement that a chief law enforcement officer (CLEO) sign off on an individual’s ATF application before it could be submitted to the ATF. Many people saw that as a win, as it makes it much easier to buy or sell NFA weapons without a gun trust. But things aren’t always as cut and dried as they may seem.

NFA and gun trusts before July 13, 2016

Since most CLEOs in Florida wouldn’t sign off on the ATF application, individuals who wished to transfer an NFA weapon created gun trusts to legally bypass that requirement. While using a gun trust expedited the transfer of NFA weapons, it didn’t allow prohibited persons to access such weapons as NICS instant background checks were still done before the weapon left the dealer’s store. Also, the trustee was legally responsible for making sure all persons associated with the trust (grantor, trustees, beneficiaries) were not prohibited by federal or state laws from possessing firearms.

NFA and gun trusts now

Today, an individual can transfer an NFA weapon by completing the ATF application, submitting a copy by mail to her CLEO (although Florida has a law prohibiting government officials from creating lists of any sort pertaining to gun ownership), and then submitting the ATF application, fingerprint cards, and a passport photo to the ATF.

A trustee of a gun trust must complete the ATF application, but will also need to have every “Responsible Person” associated with the trust complete a new ATF form. The trustee must submit a copy of all the ATF forms by mail to her CLEO, and then submit all that ATF paperwork PLUS fingerprint cards and passport photos for every responsible person to the ATF.

Whoa! That’s potentially a lot of paperwork, time, and money.

Why a gun trust is still valuable

So, you’re probably thinking, “Hell, it’ll be easier to just buy a suppressor as an individual. Forget the trust.” Yes, in some cases, it may be appropriate. If you can say “yes” to every one of the following, you may want to buy, sell, or manufacture as an individual:

  1. I would never allow my spouse,  a friend or other family member to use my suppressor or other NFA weapon without me being right next to them (illegal possession = felony).
  2. No one except me has access to the gun safe where I store the NFA weapons I own as an individual – that includes my spouse and adult children (illegal constructive possession = felony).
  3. My spouse or significant live-in other will never need to use my suppressed weapon for self-defense when I’m not home (illegal possession = felony).
  4. I have a current, valid Durable Power of Attorney, and all of my named Agents can recognize which of my weapons are highly-regulated NFA weapons and which ones aren’t, and will know what to do with them if I become incapacitated (illegal possession= felony, contraband weapons confiscated by ATF).
  5. Or, if I don’t have a current, valid Durable Power of Attorney, I understand that if I become incapacitated, someone will have to go to court ($$) to be named my guardian so my NFA weapons can be legally transferred or sold.
  6. I have a current, valid Will, and all of my named Personal Representatives can recognize which of my weapons are highly-regulated NFA weapons and which ones aren’t, and will know how to legally transfer them when I die (illegal possession = felony, contraband weapons confiscated by ATF).
  7. Or, if I don’t have a current, valid Will, I understand that a judge will name a Personal Representative to handle my estate, in accordance with Florida law: spouse, then children, then parents, then siblings, etc. All of these people can recognize which of my weapons are highly-regulated NFA weapons and which ones aren’t, and will know how to legally transfer them when I die (illegal possession = felony, contraband weapons confiscated by ATF).
  8. I am not a veteran, so there’s no chance that the VA could someday unilaterally decide that I’m not capable of handling my finances and assign me VA Fiduciary (automatic addition to NICS database as a mental defective = prohibited person = illegal possession = felony; contraband weapons confiscated by ATF).
  9. I will not use medical marijuana as long as it’s federally regulated under the Controlled Substances Act (illegal drug use = prohibited person = illegal possession = felony; contraband weapons confiscated by ATF).
  10. I understand that any NFA weapons I own as an individual will be subject to probate ($$), and will be distributed under the terms of my valid Will, or, if I have no valid Will, per Florida law.
  11. I have no concerns about privacy when I die. I understand that my Will – which may designate who will receive certain weapons – shall become a public court record and will be available to virtually anyone.
  12. I have complete faith that the Supreme Court and politicians will continue to defend my constitutional right to own guns.

Okay, I threw that last one in there for fun – none of us believe that!

But if you can’t say “yes” to the other items on the list, consider speaking with a gun trust attorney. And if you currently have just a basic $100 NFA gun trust, consider upgrading it as it may not offer all the protection you need.

Gun trusts can be valuable estate planning tools, and there are ways a knowledgeable trust attorney can draft gun trusts to maximize sharing, privacy, and control while minimizing the onerous requirements of the new Rules. Gun trusts can include all your weapons or only your NFA weapons. They may help keep your guns in your family’s hands when things go terribly wrong for you (incapacity, legal problems, death, etc.). They can be revocable or irrevocable, depending on your situation. They can end at your death or continue for generations.

Your gun trust – just like the rest of your estate plan – should fit your particular needs just as your favorite holster fits your carry gun.

Other articles you may find interesting:

Medical Marijuana and Gun Laws: One Toke Over the Line

NFA Firearm Trust FAQs

Here’s Why You Need Estate Planning

Estate planning for farmers
Estate planning ensures that children don’t inherit property before they’re mature enough to properly manage it.

It’s always the right time to do your estate planning, but it’s most critical when you have beneficiaries who are minors or with special needs, says the Capital Press in the recent article, “Ag Finance: Why you need to do estate planning.”

While it’s likely that most adult children can work things out, even if it’s costly and time-consuming in probate, minor young children must have protections in place. Wills are frequently used, which means the estate generally goes to the child when he reaches age 18. However, few teens can manage major property, such as a farm or a business, at that age. A trust can help, by directing that the property will be held for him by a trustee until a certain age, such as 25 or 30.

Probate is the default process for administering an estate after someone’s death. A Will or other documents are presented in court and a Personal Representative (Executor) is appointed to manage it. It also gives creditors a chance to present claims for money owed to them. Distribution of assets will occur only after all proper notices have been issued, and all outstanding bills have been paid.

Probate can be expensive. However, wise estate planning can help most families avoid this and ensure the transition of wealth and property in a smooth manner. Talk to an experienced estate planning attorney about establishing a trust. The person who owns the farm, business, home, or other assets, can name themselves as the beneficiaries during their lifetime, and instruct to whom it will pass after their death. A living trust can be amended or revoked at any time, if circumstances change.

The title of the property is transferred to the trust. With a trust, it’s easier to avoid probate, and the property can transition to the beneficiaries without having to go to court. Living trusts also help in the event of incapacity or a disease, like Alzheimer’s, to avoid guardianship. It can also help to decrease capital gains taxes, since the property transfers before their death.

If you have several children, but only a couple of them work with you on the farm or in your business, an attorney can help you decide how to divide your estate equitably.

Reference: Capital Press (December 20, 2018) “Ag Finance: Why you need to do estate planning”

ATF Changes NFA Rules Under Cover of Darkness

NFA rules changed for silencers
New NFA rules will affect silencers and other firearms.

Last night, while most of the media were sleeping, the ATF changed NFA rules that have been in force since 1934, and issued its final ruling on its proposal (41-P) to close the so-called “gun trust loophole.”

As originally proposed, the ATF would make transfers (purchases and sales) of National Firearms Act (NFA) weapons by trusts and corporations subject to the same archaic rules that burden individuals – namely CLEO certification, FBI fingerprints, and passport-type photos. Currently, the trustee or corporate officer preparing the paperwork and picking up the weapon is subject to a NICS background check – like any other gun buyer – and is held legally responsible under hefty federal penalties for ensuring that no prohibited person has access to the weapon.

I haven’t had time to digest the entire 240+ page ruling yet, but it appears the ATF backed away from requiring CLEO certification for trusts and corporations, and instead will require CLEO “notification” as well as fingerprints, photos, and NICS background check of all persons having control of the weapons. Generally, for trusts, that would be the trustees but may also include some beneficiaries.

This change will become effective in about 6 months.

As I currently understand it, if this ruling stands, neither individuals nor trusts will need CLEO certification (CLEO approval) before they can buy a suppressor or SBR. Instead, the CLEO must be “notified” that a transfer is taking place. And, it appears that all trustees will have to submit fingerprints and photos, and be physically present for the NICS background check.

This appears to be an unconstitutional overreach by the Obama administration, and pro-Second Amendment legal organizations are already preparing for battle. Be sure to support them to preserve your rights.

I’ll be reviewing the ruling in more depth and consulting with other gun trust lawyers to see how this may play out with existing and new gun trusts and will keep you posted.