WHAT IS A GUN TRUST?
A Gun Trust is the generic term for an irrevocable or revocable trust that takes title to firearms. “Gun Trusts” are sometimes known as NFA Firearms Trusts, Firearms Trusts, or Firearms Revocable Trusts.
Any legally owned firearm can be placed under a gun trust. But, these trusts are particularly applicable to weapons that are classified under the National Firearms Act (NFA) Title II of the Gun Control Act of 1968.
Some examples of Title II weapons are:
- Fully automatic machine guns,
- Short-barreled shotguns, and
- Suppressors (also known as silencers).
THE PARTIES INVOLVED IN A GUN TRUST
Also known as the grantor, these are the individuals that create gun trusts and are responsible for them.
These are the parties responsible for the gun trust. So, they’ll need to submit their passport size photographs and fingerprints along with the AFT Form 5. They also have the power to possess and use the weapons listed in a gun trust without the owner (the settlor) being present. Co-trustees have to be the minimum legal age of 18.
It refers to the person that takes over the gun trust after the passing on of the co-trustees and settlor. Just like the co-trustees, a successor trustee has to be at least 18 years in age and play the role of the beneficiary or co-trustee in a gun trust. Nonetheless, it’s essential to keep in mind that successor trustees are not responsible for the NFA trust. But, this changes if they become the co-trustees. And, they can only use the said firearms under the owner’s supervision.
They are the people that will take ownership of the weapons listed in a given NFA gun trust when the settlor kicks the bucket. Beneficiaries have to meet all the requirements to own an NFA firearm. For instance, they must be at least the legal age of 18 and have no criminal record.
The beneficiaries are passive members of the gun trust and are therefore not responsible for it. They’d only become responsible parties if they’re named as the co-trustees of the gun trust, which would then allow them to use the NFA firearms without the owner’s supervision.
In a gun trust, these refer to the settlor coupled with the listed co-trustees. The listed successor trustees also fall in this bracket if they’re named as co-trustees.
TYPES OF GUN TRUSTS
Gun trusts fall into two categories:
Revocable Gun Trusts:
They are typical revocable trusts that contain language that is specific to the National Firearms Act (NFA). Revocable Gun Trusts are the most popular because they allow modifications through amendments after execution.
Irrevocable Gun Trusts:
They are typical irrevocable trusts that contain language that is specific to the National Firearms Act (NFA). Irrevocable Gun Trusts are not as popular because they do not allow modifications through amendments after they are executed
WHY IS A GUN TRUST IMPORTANT?
Having a gun trust packs an array of benefits, some of which are outlined below:
Easier Use and Management:
If you have a Class 3 Federal Firearms License, then you know it is illegal to hand over your firearms to anyone to use or store them for you. This means that taking your friends, colleagues, or family members shooting with your weapons is a felony.
However, a gun trust protects you from this law. It allows any of your trustees and beneficiaries to legally operate and possess any of your weapons.
No CLEO Signature Required:
When buying a firearm you are typically required to visit your local Chief Law Enforcement Officer (CLEO) for fingerprinting and approval. However, a gun trust eliminates this process and now you just need to notify them
Legal beneficiaries can submit an ATF Form 5 (NFA gun trust form) for the inheritance of the firearms.
Setting up a gun trust can be multi-generational, which means they are designed to be functional after the settlor/ grantor dies or becomes incapacitated. This permits successors to take over the trust and resume its operation without needing to transfer ownership of the weapons. Gun trusts also aid in avoiding probate.
WHAT A GUN TRUST CANNOT DO
Here are some of the Gun Trust limitations:
- Bypass Firearm Limitations: A gun trust does not permit you to own any weapons that are illegal to obtain.
- Permit Illegal Users: A gun trust prohibits users that cannot otherwise legally use or possess a firearm.
- Registration: A $200 NFA tax stamp is required whether or not you have a gun trust in place. So, you are still required to pay this fee and register the firearm with the ATF.
WAYS TO SET UP A GUN TRUST
Here are some of the ways to create a gun trust.
- Online: In today’s online era, the internet has become the go-to for almost anything, and gun trusts are no exception. There are many sites that sell NFA trusts. But, like everything else, there are also counterfeit gun trusts that are automatically denied by the ATF. So, keep this in mind to avoid wasting money. If you decide to go this route, it is advisable to pay an attorney to review the gun trust.
- Gun Trust Attorney: To avoid the risk of getting scammed by buying a bad NFA trust online, you can reach out to a reputable lawyer that will craft one from scratch, suited to your preferences.
- DIY Templates: In a bid to save money, there are countless “Do It Yourself” templates on the internet. But, like buying a ready-made gun trust online, we don’t recommend investing in these templates. They may not be fully protected and compliant with the ATF. If you decide to go this route, it is advisable to pay an attorney to review the gun trust.
WHY YOU SHOULD USE AN ATTORNEY INSTEAD OF ONLINE SERVICES
While online services offer cost savings, using a lawyer comes with unbeatable perks and can offer the same convenience.
Using a qualified lawyer adds value in the crafting and implementation process of a gun trust. Sure, some aspects of it mimic form letters. But some sections are customized to suit your particular situation.
It’s best to consult an attorney that’s an expert in adding this personal touch to your gun trust. This includes relevant documentation.
Much-needed Support and Backup:
Gun trusts are tied to additional requirements and intricacies that go above and beyond typical estate planning. So, a reputable lawyer will offer you much-needed backup and help you get out of sticky situations.
When it comes to BATFE (Bureau of Alcohol, Tobacco, Firearms, and Explosives) an attorney can offer extensive support coupled with ongoing legal counsel. If an issue with the BATFE crops up, those who downloaded and filled out forms from the internet will be left high and dry.
But those who hired qualified lawyers can call upon them to swoop in and save the day. A lawyer also carries malpractice coverage, which comes in handy if there was an error by the drafter which led to litigation.
MISTAKES TO AVOID WHEN SETTING UP A GUN TRUST
As they say, man is to error! The same applies to the creation of a gun trust. So, here are some common mistakes that you’ll want to avoid to ensure you’re fully protected and have the much-needed peace of mind.
The legal transfer of all the assets to the trust:
It is essential to ensure that all the given firearms are legally transferred to the gun trust. The trustees can only legally use these weapons listed in the trust to avoid problems with the law.
All trustees must be present for the notarization:
It is no secret that the notarization is what breathes life into a gun trust while the law varies from one state to another regarding whether or not all trustees must be present for the notarization. So, it’s important to consider this when including a trustee that may be unable to attend.
NFA weapons are not legal in all states:
Taking the time to understand your state laws coupled with a lawyer consultation can aid in ironing out any issues. Only some states permit the legal ownership of NFA weapons. So, it’s crucial to ensure that all the firearms in your trust can be legally owned in your given state.
Gun trusts are the perfect risk management solutions for these scenarios. Those named in your trust can legally handle your NFA weapons and evade lawful issues that may later crop up where the weapons are used in emergencies, for instance.
Are you ready to get started on your South Carolina NFA gun trust? Contact one of our attorneys today!