There are many different kinds of trusts, the main benefits of which are to avoid probate and to allow property owned by the trust to easily pass to the beneficiaries. Some, like a special needs trust, allow special needs beneficiaries to receive funds without jeopardizing their right to public benefits. Another kind of trust that is becoming increasingly popular are gun trusts.
As the name implies, the trust is designed to pass firearms to named beneficiaries without having to go through probate or court intervention. Firearms are not your typical personal property and though you may inherit a firearm through a will or by intestate succession, your receipt and possession of it may be illegal. Even if your purchase is legal, there are steps to take such as background checks, being fingerprinted and obtaining the approval of the local police chief in many cases before you can legally possess a gun.
The Trust Loophole
But if you have a valid gun trust, none of this may be applicable. According to the Federal Firearms Regulation Guide, or regulations promulgated by the Alcohol, Tobacco and Firearms agency (ATF), guns in such trusts are exempt from background checks. In other words, you may be able to receive and possess restricted firearms that are left to you in a gun trust regardless of whether you have the legal right to own one.
Although not required, most licensed gun dealers conduct background checks anyway. This is either because they are unaware of the loophole or want to ensure that they are not liable, criminally or civilly, for selling a restricted firearm to someone who would not otherwise be eligible to acquire one and who may assault someone with a firearm purchased from them.
There are certain firearms whereby their possession and sale are restricted. These are listed and regulated under the National Firearms Act of 1934 (NFA) and Title II of the Gun Control Act of 1968. These refer to weapons and accessories that are not used by hunters or your next door neighbor and include grenades, silencers, machine guns and short barreled and sawed off shotguns. If you own any of these Title II weapons, even selling them requires a background check.
What Gun Trusts Can Do
Although most law enforcement officials dislike the gun trust loophole, advocates assert that the trusts are not misused nor are they a legal avenue for criminals to purchase and possess firearms. They do point out that most gun dealers conduct background checks anyway and may refuse to transfer the guns to a felon, drug addict or person with a history of mental illness or person otherwise prohibited from possessing one.
If you do decide to have a gun trust created, there are certain safeguards that it can provide:
- You can provide that a weapon or weapons be possessed by more than one person. Otherwise, only one person who is the registered owner may possess the gun, which may not be used by anyone else without being directly observed by you according to NFA regulations.
- A trust allows you to leave the firearms in the possession of persons whom you trust to be responsible owners.
- Gun trusts obviate the need to go through the background check, fingerprinting and obtaining of permission from the local Chief Law Enforcement Officer.
- A transfer by trust ensures privacy, which is not available if the weapons are passed by will or intestate succession.
- You can avoid the possibility that a family member may be violating the law.
Have an Estate Planning Lawyer Create Your Trust
Though there are do-it-yourself guides on drafting a trust, these are general in scope and do not account for individual preferences or conditions and may not be current regarding any rule or law changes affecting trusts. An estate planning lawyer can ensure that your gun trust is valid and complies with the law.
Dan McKenzie is a Denver estate planning lawyer who has created numerous gun trusts for his clients in the Denver and surrounding communities and can advise you on how a gun trust can achieve what you wish to do while being in compliance with state and federal laws regarding gun ownership, possession and sales. Contact him today to assess your trust needs and other estate planning goals.