What Are the Benefits of a Gun Trust?
What are the Benefits of a Gun Trust? After the enactment of Rule 41F, which became effective July 13, 2016, the common question we hear is, “What is the benefit of a gun trust now that it is no longer needed to avoid the Chief Law Enforcement Officer (CLEO) approval for the possession or use of a weapon regulated under the National Firearm Act (NFA)?” Using a trust to get around the CLEO approval for an NFA firearm was just one reason for creating a gun trust. The other benefits of a gun trust still exist.
One benefit to create a gun trust is to preserve a firearm legacy for future generations. Our founding fathers passed down an ethic and respect for firearms. By the War of 1812, this had been diluted. A gun trust is way for each of us to provide our families written instructions on the importance of the Second Amendment, proper respect for firearms, mandate regular training both on and off the range for handling firearms and shooting, and create an incentive for the need to go beyond basic training.
A second benefit to create a gun trust is for estate planning purposes. With NFA firearms, when a person passes away, the firearm must be transferred to another person that can lawfully own, possess, and use the NFA firearm. The federal regulations provide a tax-free mechanism for this transfer, which must happen. However, the transfer is not necessary when the trust is the registered owner of the NFA firearm. The NFA firearm remains in the trust and the members of the trust can still have access to that firearm.
A third benefit to create a gun trust was to avoid the federal transfer requirements. When a person purchases an NFA firearm in his or her name alone under the federal requirements and tax stamp, no one else can possess or use the firearm without violating the federal transfer requirements. This is true if the use or possession is temporary and for a few minutes. A transfer of an NFA firearm requires the completion of paperwork and transfer of the tax stamp. A gun trust avoids this process for those individuals named as either grantors or trustees of the gun trust. Each named trustee can possess and use the NFA firearms under the trust’s registration of the firearm.
A fourth benefit for the language of the trust can train successor trustees. Transferring firearms to or allowing possession of firearms by prohibited persons can create legal issues for successor trustees. Our gun trusts provide successor trustees with the information to prevent these types of transfers from occurring. The trusts also give successor trustees the discretion of delaying transfers or use of firearms to adult novice firearms user or minor beneficiaries.
While a search of the internet can result in other benefits of creating and having a gun trust for the ownership, preservation and post-death transfer of all firearms, these are the top four benefits that I have identified in my practice as key in decision making for my clients. A gun trust is not about circumventing legal requirements to own restricted firearms, but to begin the creation of family firearm legacy that carries on for generations.
If you are interested in creating or continuing your family’s firearm legacy, contact our intake team today to schedule your pre-engagement meeting and learn more on how a gun trust can complete your estate plan.