Why A Firearms Trust?
The simplest of reasons is to simplify the acquisition of certain federally regulated firearms. However, as you will see below, this is ONLY the tip of the iceberg. There are many more significant benefits to be gained.
The National Firearms Act (NFA) regulates the possession, use, and transfer of several different types of weapons. These weapons are commonly referred to as “Title II” weapons and include machine guns, short-barreled rifles and shotguns, suppressors, destructive devices, and Any Other Weapons (AOWs).
The NFA permits only two ways to acquire Title II weapons: individually or through an entity. To obtain these items as an individual, a person must submit fingerprints, a photograph, pay the $200 application fee/tax, and obtain the signature of the Chief Law Enforcement Officer (CLEO) in the jurisdiction in which they reside. In short, a hassle for each purchase.
Most firearms attorneys will tell you that individual ownership is NOT the best way to own Title II weapons. Why? Well, only the individual under whose name the weapon/device is registered will be entitled to use the item. That means you cannot share, lend to, or even permit a friend or family member to use the item, even at the range with you.
Many firearms attorneys have argued that the BATFE defines the term “unauthorized transfer” broadly and, depending on the circumstances, may include handing a Title II weapon to a friend at the firing range or even allowing a spouse to have the combination of the safe where the Title II weapons are stored. Imagine that! Just your wife knowing the combination to the safe that holds any Title II items can be a felony.
As a result of the drawbacks of individual ownership, combined with possible CLEO non-participation in the application process, many gun owners have resorted to forming an entity to purchase and hold Title II weapons.
There are several advantages to using an entity to purchase and hold NFA items:
- No fingerprints are required
- No photographs are required
- No CLEO signature is required
- In contrast to individual ownership, multiple people may use the weapons
The question then becomes which type of entity is best to hold Title II weapons. The answer is a firearms trust.
Introducing Firearms Trusts
Corporations, LLCs, and nonprofit corporations can all be used to obtain Title II weapons. The problem with these entities is that they all require fees with the state. You must pay an initial fee to form the entity and a yearly fee to maintain it. In Nevada, that can amount to 100s of dollars annually. Further, these types of entities are designed to earn money…not to hold, share, and distribute assets. They are not a proper fit for this purpose.
In contrast, a trust does not require any filing fees with the state. Because trusts are primarily an estate-planning tool, they are designed to hold, share, and distribute assets. While it is true that you could use a free trust you pick up at a gun shop or download one from a discount online source to obtain NFA weapons, these trusts most likely do not protect a person’s family and friends adequately, as the trustees are granted powers which would allow them to commit felonies in many different situations.
Accordingly, a well-written firearms trust is designed for one purpose and one purpose alone; owning, enjoying, and eventually distributing firearms, ammunition, and accessories. It is purpose-built and is NOT a warmed over conventional trust.
In the common American homestead, a firearms collection is the product of only one spouse’s interest. The other spouse tolerates this interest, but does not care nearly as much about the collection of items. Possibly through death or disability, the disinterested spouse or another family member may be forced to manage and/or distribute the collection. Because of the vast amount of federal and state regulations pertaining to both NFA and non-NFA weapons, a disinterested spouse or family member may make a mistake as to the applicable laws. A violation of the applicable laws usually results in the commission of a felony. Yes, you read that correctly, your wife or children could commit one or more felonies just because they assumed ownership of your collection and tried to sell it.
Because a well-written firearms trust is designed with this scenario in mind, there are detailed instructions to guide a trustee in handling the assets as well as an overview of applicable laws and regulations.
A well-written firearms trust is also designed to allow for multiple users of the items held by the trust. This is in direct contrast to a standard or generic revocable living trust. The well-written trust specifically allows for any named trustee, successor trustee, and any named beneficiary to have the ability to use the trust assets. There would even be a provision that will deem any person that you are shooting with a beneficiary of the trust. The trust would also allow for the formal appointment of beneficiaries for a limited duration with a set expiration date. An “automatic beneficiary” and a “limited duration beneficiary” have no rights for inheritance unless they are also listed as a “remainder beneficiary.”
A well-written firearms trust may also have many standard trust features such as avoiding the probate process for your firearms and the public record that it would create. There is also the ability to create and update a tangible personal property memorandum which grants different people specific items of a collection.
Sin City Munitions has connected with a Las Vegas law firm that specializes in NFA Firearms Trusts. The Bunker Law Group can write your gun trust and get you the security and peace of mind discussed above.
Use the form below to start the process of getting your own gun trust established.