One of the most important steps in creating a Gun Trust is determining the powers, duties of the trustee(s), and other terms in the trust. Because the duties of the trustee(s) and terms of the trust are so drastically different from the traditional purposes for trust arrangements, we recommend creating a separate trust specifically for your firearms.
Be wary of including too many people in the trust because anyone designated as a trustee is free to use the firearms. This presents significant risks because each trustee is jointly and severally liable for all of the actions of co-trustees under the partnership issues addressed in the NFA.
Gun trusts can be set up to be very flexible. Most are established as a revocable trust, which means it can be changed by the grantor during his or her life. With a revocable trust, the grantor may add or subtract individuals or weapons to and from the trust as necessary. Another advantage is that a trust allows the grantor to legally bypass many ATF application requirements. Fingerprints, photographs, and CLEO signature are not required. Not only can this speed up the process, but you do NOT need to provide the government with this information.
Sometimes people will ask about setting up a corporation as the registered owner. Trusts are generally private and do not require public filing (this may not be the case in every state so you should check with a local attorney on this). Corporations are public, do require filing, and also require annual maintenance fees and taxes. For these reasons, setting up a Gun Trust is the way to go.
At Resch and Root, LLC, we offer a customized Gun Trust designed to help you avoid legal hassles now, hassles if you become disabled or die, and minimize the likelihood of an “accidental felony” due to unlawful sharing, gifting, or selling a firearm.
The Gun Trust has proven to be a powerful tool in estate planning when an estate contains NFA firearms.
The NFA was passed in 1934 in response to the gang violence of that time. It imposed a tax on certain firearms thought to contribute to the growing crime problem, including machine guns, short barreled rifles and shotguns, and silencers. In an effort to discourage possession of these types of weapons, individuals were required to register them with the federal government and pay a tax stamp fee of $200.
The NFA was amended in 1968 and again in 1986, but its basic provisions remain unchanged: national registration of certain weapons and payment of a $200 tax per weapon, or $5 for devices classified as Any Other Weapon. ("AOWs"). The NFA has strict requirements and carries stiff penalties for violations. Only a registered owner of an NFA weapon may be in possession of that weapon. Illegal possession of an NFA firearm carries a prison sentence of up to 10 years and/or a fine of up to $250,000.