Many firearm owners hear a lot about the benefits of "gun trusts" designed to hold ownership of firearms and specific firearm accessories. These trusts are used for forearms that are subject to strict federal and state regulations. Gun trusts can make it easier to handle firearms after the firearm owner's death, which helps prevent surviving family members from accidentaly and inadvertently violating state or federal law.
Types of weapons held in trust
Most commonly, gun trusts are utilized for weapons that are regulated by two federal laws:
- the National Firearms Act of 1934 (NFA)
- Title II of the Gun Control Act of 1968
The weapons that are covered under these laws are often called NFA or Title II firearms. They are also commonly referred to as class 3 weapons, because a class 3 Special Occupational Tax (SOT) license is required to deal in or transfer them. NFA weapons include but are not limited to:
- Machine guns
- Sound suppressors (Silencers)
- Short-barreled rifles
- Short-barreled shotguns
- Other explosive or destructive devices
NFA weapons must have a serial number and be registered with the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). These weapons can only be possessed and used by the registered owner. To transfer a registered NFA weapon, the owner must get ATF approval and pay a $200 tax in most situations.
Benefits of a gun trust
A gun trust can help to avoid some of the federal transfer requirements involved in NFA weapon ownership.
- Allow more than one person to possess and use NFA weapons held in Trust. Trusts may have more than one trustee named at any one time. Each trustee in a gun trust will have the right to possess or use the trust firearms.
- Keep the gun in trust after the current owner's death. A gun trust can outlive the creator of the trust. If you create a gun trust and transfer your NFA firearms to the gun trust, the trustees and beneficiaries of the trust have whatever rights you grant them under the terms of the trust. Because there is no transfer of ownership, there is no transfer tax, transfer form or need for approval of transfer.
- Help the executor of your estate. State and federal regulations of gun ownership, possession and use are cloudy and confusing. The executor of your estate, the individual in charge of managing and transfering your assets, is most likely not familiar with the laws of your state or federal regulations regarding your NFA weapons. An executor can potentially violate criminal laws byt transferring a weapon without going through the proper procedure. This can include transferring ownership without permission, transporting or delivering it to a state where it is illegal or giving it to a person who is legally prohibited from owning it. Appointing a trustee familiar with state and federal regulations regarding your firearms and weapons can help avoid these potentially life altering messy situations.
- Avoid probate. Probate, the legal process that your assets and property go through after you pass, can be a long and complicated mess if there is even the smallest problem. Because your firearms are in a gun trust, your firearms and weapons avoid having to go through the probate process and can pass directly to your designated beneficiaries.
Be wary of other trusts; make sure it is a gun trust
A gun trust is very different from the most common type of trust, the revocable living trust, which is used to pass on your assets to others at the time of your death while avoiding probate. A common revocable living trust is not meant to handle the issues that a gun trust deals with regarding state and federal gun laws. Both their form and purpose are very different.
Make sure that if you have NFA weapons that you intend to pass on that you ensure that they are passed on in a safe and legal manner. Failure to do so can result in fines and legal charges brought against those who may have accidentally violated state or federal law.