What is a Gun Trust?

A gun trust offers numerous distinct advantages for gun owners, collectors, and enthusiasts to take advantage of. For most individuals, there are three primary advantages of a gun trust:

1. Shared Possession and Access to Trust Assets
2. Estate Planning with a Gun Trust
3. Privacy Benefits of a Gun Trust

1. Shared Possession and Access to Trust Assets

First and foremost, is the shared possession of and access to the assets of the trust. Firearms regulated by the National Firearms Act – machineguns, short barreled rifles, short barreled shotguns, silencers/suppressors, destructive devices, and “any other weapons” – are only lawful to possess if they are properly registered with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and only the registered owner can lawfully possess them. When the registered owner of a National Firearms Act firearm is an individual, only that individual can lawfully possess the firearm. Such a person can let others shoot or utilize the firearm while still present, but can never allow anybody else to have unsupervised access to the firearm. Not even their husband, wife, parents, or children. For most people, that would mean locking your family members out of your safe or acquiring a second safe just to store those firearms.

Establishing a gun trust allows the trust to be registered as the owner, rather than an individual. While the settlor of a revocable trust will still control the ownership of the firearms, the settlor can also name other trustees who would have the authority to possess and have access to the firearms without the immediate supervision of the settlor, unlike those owned by and registered to an individual. This means naming your spouse, parents, [adult] children, friends or others as trustees would permit them to have access the firearms (no need to buy two safes or lock your loved ones out) and take them to the range, hunting, or anywhere else they may need to go, without your immediate supervision. Even if there is nobody else you would like to be able to possess the firearms without your supervision, establishing a gun trust now will make it easier to grant someone that permission in the future.

For example, if you currently have a National Firearms Act firearm registered to you individually, and wish to transfer it to a trust, you will be required to file a new Form 4 application to transfer that firearm from yourself, into a gun trust. That transfer will incur another $200 transfer tax, even though you already paid the tax when you originally acquired the firearm. However, if you establish a gun trust prior to purchasing the firearm and transfer it to the trust, you can later amend the trust to add additional trustees and give them the authority to possess the firearm, without the need to initiate a transfer of the firearm and pay the duplicate tax.

2. Estate Planning with a Gun Trust

The second primary advantage of a gun trust is estate planning. While it is common knowledge that everybody should have a will prepared in the event of their death to make the probate process easier, most wills are what we refer to as “simple wills” and generally just direct the distribution of a couple major assets (house, car, etc.) and then deal with everything else in the exact same way as remainder personal property, usually directing everything to one’s spouse or children in equal shares. With these simple wills, there is usually little to no flexibility for specific distributions – distributions which direct specific pieces of property to specific people.

In the course of our practice:

• we have found that the majority of our clients usually leave all of their property in their will to their spouse and/or their children in equal shares, even if one or more family members don’t have any interest in firearms and are likely to sell them.
• At the same time, we also find that most people generally do not want their firearms sold off after they pass and would prefer all of the firearms go to specific people they shared that interest with during their life, sometimes a spouse, but more likely one of their children or even a close friend.

Setting up a gun trust and transferring firearms to it, whether:

1. national firearms act firearms
2. regular Title I rifles
3. pistols
4. shotguns

separates them from the individually-owned assets transferred via the probate process after your death. When you establish a trust, you would designate one or more beneficiaries to receive the trust’s assets after your death, and they do not need to be the same as the beneficiaries identified in your will. Many of our clients use their gun trust to make sure that someone who shared their passion for firearms during their lifetime receives all their firearms, ammunition, and related accessories after their passing.

3. Privacy Benefits of a Gun Trust

The third and final primary advantage of a gun trust is privacy. This is closely related to estate planning for reasons that will become clear. Despite that it deals with firearms, the National Firearms Act is actually a tax law and is found under the Internal Revenue Code, hence the “tax stamp” registrations. As a tax law, National Firearms Act registration information is confidential and not available to the public, whether the firearms are registered to an individual or a trust. When an individual dies, and the probate process begins, their will is filed with the Register of Wills and Orphans’ Court, where it becomes a public document.

In some counties, obtaining a copy may require traveling to the court, but in others, it may be electronically available through the court’s website for those who know where to look. This means that if your will lists your firearms and who is to receive them after your death, that information will be public. A trust on the other hand, generally is not filed with the court and does not become a public document when it is administered unless its distributions are challenged for some reason.

If you or someone you know are interested in establishing an NFA Firearms Trust, contact us today!