Gun Trusts? Yes, Gun Trusts.
The disposition of a firearm at death is not as easy as putting the firearm on a statement of tangible personal property or leaving the firearm to a traditional terminating revocable trust. Traditional methods of transferring unique assets to an irrevocable may not be sufficient for a firearm.
The Uniform Trust Code does not specifically address assets such as firearms. Additionally, state trust laws are silent on the ownership of firearms. However, state laws are not silent on the overall disposition and ownership of firearms. In addition, there are important federal statutes to consider, such as the Gun Control Act of 1968 and the National Firearms Act. For those looking into basic gun and firearm ownership laws, it might seem a daunting task to review such a numerous collection of legal text. What is the everyday firearm owner or prospective owner to do?
Creation of a Gun Trust
Clients can safely and legally dispose of a firearm to a beneficiary at death using a gun trust. The contents of a typical gun trust are no different than any other revocable trust, except for references and terms related to firearms and the Gun Control Act.
The grantor (or gun owner) creates a trust during his lifetime for his benefit, naming himself as a trustee. The trust should make specific references to an intent of complying with not only the Gun Control Act, but also the National Firearms Act. It is also important to note in the trust's statement of intent that the trust is created specifically to comply with local, state and federal law on firearms in its administration and interpretation.
In order to properly accomplish its purposes, the gun trust should have successor trustees listed whom are eligible to own firearms themselves, in accordance with the Gun Control Act. The trust should contain automatic removal language that indicates if a successor trustee, who, at the time he is to become trustee, is an ineligible trustee in accordance with the provisions of the Gun Control Act, he is deemed to have predeceased the grantor. It is recommended that at least two qualifying successor trustees be named. Instead of naming successor trustees, a trust protector or trustee selector could be named in the trust to select successor trustees who are eligible to serve in accordance with the Gun Control Act. It is the author's experience that corporate fiduciaries are unwilling to serve as trustee of a gun trust.
During the grantor's lifetime, the gun trust's benefit is that the grantor has a vehicle to own title to his firearms in case of incapacity, and also aids in inventorying the grantor's collection during life. The grantor should prepare a list of his firearms to accompany the creation of the gun trust, analogous to completing a Schedule "A" upon creation of a revocable trust or simultaneously executing a statement of tangible personal property when creating a will. During his lifetime, the grantor will leave himself with the power to amend the trust and add and/or remove additional property from the trust.
The gun trust gives the successor trustee broad language in order to deal with the grantor's firearms. This may include filling out the requisite transfer forms to transfer the firearms, reimbursement for shipping costs and/or reimbursement for travel costs to transport such firearms. The trustee should be given discretion to transfer firearms to beneficiaries, in accordance with local, state and federal law.
If the grantor is going to name specific beneficiaries during his lifetime, he should ascertain that such beneficiary(ies) is able to own a firearm. The trust will give the trustee authority to ascertain whether such beneficiary can receive the firearm upon the grantor's death. The trust should make an alternate disposition of the firearm(s) in case a certain beneficiary is unable to own a firearm. If the trust has only one beneficiary, a charitable remainder beneficiary should be utilized. (Ideally this should be a beneficiary such as the National Rifle Association, i.e., an organization that can properly dispose of the firearm.) The gun trust can leave the firearms in further trust for the ultimate beneficiary(ies), or provide an outright distribution of the firearms. However, if the firearms are of historical value, the gun trust may be used in a dynastic trust type manner, thereby preserving the firearms for generations to come.
Firearms present unique difficulties to estate planners. However, with knowledge of the relevant state and federal statutes, the value of a firearms collection and the grantor's intent with regard to such collection's ultimate distribution can be preserved through the use of a well-designed gun trust.
--- Related on ThinkAdvisor: Planning for Longer Lives: Fading Capacity
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|Date:||Apr 10, 2017|
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