Tag: gun trust

The Benefits of a Gun Trust Today

Posted on by Michigan Gun Law

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 for creating and having 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.

What is a Gun Trust?

Posted on by Michigan Gun Law

Estate planning for firearm owners is not the same as an estate plan for a young married couple with small children. While the firearm owner may be the young married couple with small children, the estate plan for firearms needs to discuss when, to whom, and how to properly transfer both Title I firearms and Title II firearms. A revocable trust will effectively manage the typical trust assets such as bank accounts, funds from life insurance policies, a house, and distribution of trust assets to beneficiaries, a separate trust designed specifically for the transfer of firearms needs to be a part of the complete estate plan.

A revocable trust designed for the ownership and transfer of firearms is known as either an NFA Firearms Trust or a Gun Trust. While some law firms use these names interchangeably, here at Michigan Gun Law, they are two separate trusts. An NFA Firearms Trust or National Firearms Trust is a revocable living trust designed for the sole purpose of owning and transferring Title II ,also known as Class 3, firearms.  A gun trust is revocable living trust designed for the ownership and transfer of both Title I and Title II firearms.

Title II firearms are those in which the federal government has enacted laws to restrict ownership. Title II firearms include short-barreled rifles and shotguns, machine guns, destructive devices, and silencers, also known as suppressors. All of these firearms require a tax stamp to own and register the firearm to a specific individual. Title II firearms may not be loaned to another person or transferred without the involvement of paperwork and BATFE officials. State laws vary on which of these firearms are legal to own or possess within the state. Some states may allow the ownership and possession of these firearms but restrict the ability to transfer the firearm upon death.

The NFA Firearms Trust provides a means to preserve the firearm after the death of the individual creating the trust, because the trust owns the firearms and has the tax stamp, not the individual. In addition, the trust provides specific instructions to successor trustees on how to transfer the firearms, where to find the relevant laws, to whom the firearms may be transferred, and the requirements under federal law to own or possess a firearm. All this information is important to a successor trustee that may not be as knowledgeable as the firearms owner who created the trust.

Another benefit of an NFA Firearms Trust is that firearms owner can omit a family member that is not qualified under federal law to own a firearm as a beneficiary under this trust, while still providing for the family member in the separate revocable living trust. This eliminates the hard choice of leaving a loved out of the estate plan because of choices that resulted in “prohibited person” status under federal law with firearms.

18 U.S.C. 922(g) defines who is a prohibited person. Some of those people include anyone convicted of a crime punishable by imprisonment exceeding one year, someone who was dishonorably discharged from military service, someone who was adjudicated as mentally defective or committed to a mental institution, a person who is an unlawful user of or addicted to any controlled substance, an illegal alien, or a person convicted of misdemeanor domestic violence. There are other categories of individuals who are prohibited to own firearms under federal law. A thorough review of 18 U.S.C. 922(g) should be done before any individual is named or added to an NFA Firearms Trust. 

Here, at Michigan Gun Law, we vet your chosen successor trustees and beneficiaries before we draft the trust to ensure that no prohibited person is named within the trust documents. In addition, we educate the firearm owner on what steps to take when they learn that a loved one has become a prohibited person.

If you are interested creating an NFA Firearms Trust or a gun trust, call Michigan Gun Law where our attorneys have the experience and in-depth knowledge in this area to craft a gun trust that meet your needs. Contact us today at (248) 230-2545 to schedule your pre-engagement meeting.