What is a Gun Trust?
One of the less commonly encountered issues the personal representative of an estate will encounter is the transfer of firearms from a decedent’s estate to the beneficiaries of the estate. However, when a personal representative is administering an estate that owns firearms, it is likely that there will be several firearms to transfer to beneficiaries or sell as the average gun owner in America owns eight (8) guns. Gun trusts are an alternative to keeping firearms in your probate estate and help ensure that the personal representative of your estate does not run afoul of any federal or state firearms laws.
A gun trust is a trust used to purchase, receive, transfer, and hold guns which are subject to certain federal laws and regulations. Like any other trust, a gun trust has one or more trustees, who hold legal title to the trust property, and one or more beneficiaries, who hold equitable title to the trust property. Typically gun trusts hold firearms that are subject to certain federal restrictions which make them more difficult to obtain. However, gun trusts can also hold firearms which are subject to less stringent federal regulations if an owner would like to use one entity to hold and transfer all of their firearms. As with any trust, the grantor of the trust should not appoint himself as sole trustee and sole beneficiary as this will result in a merger of title and essentially negate the existence of the trust.
The Gun Control Act of 1968 (GCA) is the federal law governing the ownership of firearms that are held in gun trusts and this law has two main titles, Title I and Title II. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) then promulgates regulations pursuant to those laws and is also responsible for enforcement. Many of the provisions of the NFA were included in Title II of the GCA and the firearms governed by Title II are commonly referred to as NFA firearms.
The majority of firearms owned in the United States are governed by Title I and includes rifles, shotguns, and handguns. Title I firearms can be single-shot, bolt-action, and even semiautomatic. These firearms are regulated to a far lesser extent by the federal government than Title II firearms and so they do not require the NFA transfer tax or application process.
Examples of NFA or Title II firearms include machine guns, short-barreled shot guns (commonly referred to as sawed-off shotguns), short barreled rifles, silencers, large bore firearms, explosive ordinance (including bombs, grenades, rockets, mines or other similar devices), and a final category called “any other weapon” which is defined as “any weapon or device capable of being concealed on a person from which a shot can be discharged through the energy of an explosive.” Transfer of Title II firearms is subject to strict legal requirements and failure to comply with these requirements can result in substantial fines and imprisonment. A transfer is defined as “selling, assigning, pledging, leasing, loaning, giving away, or otherwise disposing of” a registered Title II Firearm. Before a Title II firearm can be transferred, it must be registered with the National Firearms Registration and Transfer Record. It is important to note that even letting another individual hold or use the firearm can be considered a transfer, so the only persons that can use the Title II firearms held by a gun trust are the trustees.
A Title II Firearm can only have one owner and a gun trust qualifies as a single owner as it is a single entity, even if there are multiple trustees as long as each trustee is legally eligible to hold Title II firearms. A trustee must be at least eighteen years of age in order to possess a Title II weapon and must be twenty-one years of age to purchase a Title II firearm.
The Department of Justice has amended the regulations of the ATF concerning the making or transfer or Title II or NFA firearms. Under the previous regulations, only individuals were required to provide fingerprints, photographs, and certification signed by a chief law enforcement officer when they were applying to make an NFA firearm or were the transferee on an application to transfer an NFA firearm. Under the new regulations, both individuals and trusts and other legal entities will have to provide fingerprints and photographs. However, instead of the requirement for a certification signed by a chief law enforcement officer, the applicant and/or transferee will only have to provide notification to a chief law enforcement officer.
In addition to being used as a vehicle to transfer guns after an individual’s death, gun trusts can also be used to purchase guns. It is also key that the funds used to purchase the firearms come from the trust instead of using an individual’s personal fuds. The trustees can then use the firearms held by the gun trust subject to any conditions that are written into the terms of the gun trust and also subject to federal, state and local laws. It is illegal for anyone but the registered owner of the NFA firearm to use it or be in possession of the firearm and one way to avoid triggering that law is to name multiple trustees.
Gun trusts also provide a higher level of sophistication regarding the navigation and compliance with the law than simply having the personal representative if an estate handle the firearms, as he or she may have no experience whatsoever handling guns or transferring them. One major benefit of using a gun trust is that it provides a method for holding firearms in the event the gunowner becomes incapacitated. A properly drafted gun trust will instruct the trustees on gun laws concerning the federal, state and local requirements for possession and transfer of the firearms held by the trust. It will further provide guidance on any state and regional gun laws where the firearms may be transferred if one of the beneficiaries lives in a different state than where the guns are held by the trust. Finally, a well drafted gun trust will provide guidance on the proper method for completing any transfer and the eligibility of the trustees and the beneficiaries to hold and receive the firearms held by the trust.
Failing to comply with federal laws regulating the holding and transfer of certain firearms can result in substantial fines and imprisonment. Gun trusts should always be revocable so that trustees and beneficiaries can be added or removed as necessary. This is essential because there must be a method for removing trustee and beneficiaries in the event they become a “prohibited person” and are no longer eligible to hold Title II or NFA firearms.
There are several issues that the personal representative of an estate will encounter when administering an estate that owns firearms, whether or not the firearms are governed by Title II.
As detailed above, there are several legal requirements that must be met when transferring firearms governed by Title II. If the personal representative does not know that he or she needs to comply with those laws, he or she could be subject to criminal prosecution.
A final issue that can occur when there are firearms in a decedent’s estate is the personal representative not knowing how to safely store or handle the guns. During the administration of an estate, it can often take several months before distribution of the assets of the estate can occur and during that time, the decedent’s firearms must be responsibly stored. Even a process as simple as transferring the firearms out of the decedent’s residence can result in serious issues if the personal representative does not know how to safely handle and transport firearms.
Rachel H. Snead
757-399-7506 | 252-722-2890
Rachel Snead is an associate attorney with Hook Law practicing primarily in the areas of estate planning, estate and trust administration, guardianship and conservatorships, dispute resolution, and fiduciary litigation. To date, she has litigated and settled over 50 matters. She enjoys the diversity of work that elder law provides, and the challenges presented by litigation just as much as she enjoys helping people with creating their unique estate plan and navigating the complex administration of estates and trusts.
A graduate of the University of Richmond School of Law and Virginia Commonwealth University, Rachel is admitted to the Virginia State Bar. She is also a member of the Virginia Bar Association (VBA), the Hampton Roads Estate Planning Council, the Virginia Academy of Elder Law Attorneys (VAELA), and the Virginia Trial Lawyers Association (VTLA).
In 2022 she became a licensed health and life insurance agent and attended the prestigious National Trial Advocacy College at the University of Virginia School of Law where she received intensive hands-on advocacy training.
She has taught multiple continuing legal education courses including, “Getting Started in Elder Law,” “Virginia Probate from Start to Finish,” and “Guardianships and Assisted Decision-Making in Virginia,” and has facilitated sessions for VAELA including “Medicaid & SSI When a Client Owns a Business.” She has also been published on various platforms including T & E Magazine, WealthManagement.com and Age in Action, a quarterly newsletter published by the Virginia Center on Aging and Virginia Department for Aging and Rehabilitative Services.
- Estate Planning
- Estate & Trust Administration
- Guardianships & Conservatorships
- Litigation & Dispute Resolution