After losing a spouse or longtime partner, it's difficult to look past your grief. However, it's crucial to understand the important and timely decisions you must make regarding your finances and personal estate plan.
A gun trust allows individuals to own firearms in a legal manner, allowing them to share access to firearms with others while remaining compliant with the law. This approach is beneficial for those who own restricted firearms or firearms regulated by the National Firearms Act (NFA), such as machine guns, short-barreled rifles, short-barreled shotguns, and firearm silencers.
NFA firearms are highly regulated and require the buyer to obtain approval from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) before purchasing them. The approval process involves a background check, fingerprinting, and payment of a $200 tax stamp. After purchasing an NFA firearm, it’s the owner’s responsibility to ensure compliance with all applicable laws and regulations.
Why Set Up a Gun Trust?
A gun trust can be an ideal solution for individuals who want to share access to their NFA firearms. Essentially, a gun trust is a revocable living trust created to hold legal title to firearms. The trust is managed by a trustee, who is typically the individual who created the trust, also known as the trustmaker. The trustee has the authority to control the trust assets and make decisions about their use.
Share Use of the Trust-Owned Guns
One significant advantage of using a gun trust is that it allows multiple people to access and use firearms in the trust. Unlike individual ownership, which requires background checks and other approvals for each person who wants to use the firearm, a gun trust can provide access to the firearms to any person named in the trust. This makes it easier for families, business partners, and other groups to share access to their firearms without the need for additional paperwork or approvals.
Easier Transfer of Gun Ownership
With individual ownership, firearms are generally subject to probate after the owner’s death, which can be a lengthy and expensive process. However, with a gun trust, the firearms are held in trust, and ownership is transferred to the designated beneficiaries upon the trustmaker’s death. This can provide a smoother and more efficient transfer of ownership while also potentially minimizing tax liabilities.
Creating a Gun Trust
To create a gun trust, an individual must work with an attorney to draft a trust agreement that complies with all applicable state and federal laws. The trust agreement should specify the terms of the trust, including the trustee’s duties, the beneficiaries’ rights, and the firearms’ use and transfer. Additionally, the trust agreement should specify the funding of the trust, which may include transferring ownership of firearms to the trust, purchasing firearms through the trust, or other methods.
While a gun trust can simplify the process of owning and sharing access to firearms, it doesn’t exempt individuals from complying with all applicable laws and regulations. For example, individuals must still obtain the necessary approvals and pay the appropriate taxes for any NFA firearms they purchase, even if they are owned by a gun trust.
A poorly drafted gun trust could potentially create legal issues for the trustee and beneficiaries, including civil and criminal liability for firearms violations. Working with an experienced attorney who understands the intricacies of gun trusts and can ensure that the trust agreement complies with federal and state laws is crucial.
This article offers a summary of aspects of estate planning law. It is not legal advice and does not create an attorney-client relationship. For legal advice, you should contact an attorney.
We hope you found this article helpful. If you’d like to discuss your particular situation, please don’t hesitate to reach out. Please contact our Cincinnati office by calling us at 513-771-2444 and schedule a consultation. We look forward to the opportunity to work with you.