The Truth About Gun Trusts

#trustplanning #trusts asset protection asset protection trust attorney trust Jan 15, 2024
The Plain English Attorney
The Truth About Gun Trusts

Gun Trusts are becoming more and more popular, but there are a lot of misconceptions and myths surrounding them. Just as with avoiding probate in estate planning with a revocable living trust, gun trusts attempt to avoid as much red tape as possible during life and after death. Here are just some of the main bullet points of Gun Trusts, but for more detail be sure to check the YouTube channel on Thursday (1/11/2024 at 4 a.m., link not active until then) and for a special podcast on 1/13/2024 at 10 a.m. with attorney Jessica Metry at The Plain English Attorney Podcast at (again, link not active until then.)

The National Firearms Act of 1934 provides for registration, background checks and other requirements related to specific classifications of firearms and not just all firearms in general. Title I firearms are revolvers, hunting rifles, "regular" barrel shotguns, and semi-automatic pistols. There are no federal registration requirements around these weapons under the Act, but there are State requirements for the purchase and ownership that can vary. Title II firearms are fully automatic weapons, short-barreled rifles and shotguns, destructive devices like mortars and grenade launchers, and silencers. There are also people who are disqualified from ownership, such as felons and people with domestic violence protective orders against them.

Each Title II weapon needs to have each owner apply and be registered in order to possess and use each Title II weapon. For example, an automatic rifle can be owned by John Doe and be registered in his name and for his use. If his wife Jane Doe wishes to use that weapon, she must also apply and be registered to use that weapon. In addition, if John's two adult children also wish to use that weapon, then they must also apply and be registered for use. There is a $200 fee on each application and transfer, so this is an $800 registration undertaking. If John Doe wants to purchase and use another Title II weapon with the same family members, it is four applications and another $800 of fees.

A Gun Trust can alleviate a lot of the paperwork and fees by collectively grouping the participants in this scenario. Here are the main points:

* The Gun Trust is the applicant for purchase on all firearms (Title I and Title II alike)

* Each of the four family members in the example has to apply and be registered in order to be co-trustees of the Gun Trust, and each pay their $200 fee

* When the next firearm is purchased, the Gun Trust makes the application and pays the $200 fee, but each individual member does not need to make and application and pay the fee

* If a co-trustee passes on, the Gun Trust determines how the assets are managed. If John Doe died but the Gun Trust states that the trust continues until the last co-trustee passes on, then that is what happens. If the Gun Trust provides for the firearms to be distributed, then that is also what happens, without probate... but the beneficiaries have to apply and register the Title II firearms before the trust can release the firearms

* It is possible to distribute the firearms to a new or existing Gun Trust provided the usual registration and fee requirements are met. For example, if John Doe's Gun Trust distributed half of the firearms to his son Jim Doe's existing Gun Trust that has Jim, his spouse, and three adult children as co-trustees, then Jim Doe's Gun Trust only has to make one application and pay one fee for each firearm on behalf of the Gun Trust instead of to five individuals.

There are many other benefits and responsibilities to comply with the National Firearms Act when using a Gun Trust, and we cover some of these items in the previously mentioned video and podcast coming this week. One final warning though... just as with downloadable Revocable Living Trust and Last Will and Testament forms, the "free" Gun Trusts available out there will fall far short of meeting the goals and expectations our clients expect, so going cheap on a Gun Trust or taking the "free" one from a gun dealer could lead to unexpected problems. And unlike with a defective trust putting assets in probate, the shortcomings of a Gun Trust could mean jail time.

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