The sales of firearms in the United States is rising, and for people who want to pass on their collection of guns to the next generation, estate planning has been particularly difficult. However, with the advent of the “gun trust” there is now a way to ensure that your collection is passed safely and to the correct beneficiaries. The gun trust has become the go-to vehicle for bequeathing firearms in an estate for owners who do not wish to have their collections sold after their death.
Increased Demand for Gun Trusts
The FBI’s National Instant Criminal Background Check System ran 21.1 million background checks for firearm purchases in 2013, a significant increase from the 19.6 million checks performed in 2012. The number of background checks also jumped in December of last year, with the FBI’s system running more than 2.3 million checks in that month alone, compared to only two million checks the December prior. This system runs a background check every time that a person walks into a licensed gun dealer and wishes to purchase a firearm.
For clients that have now amassing a collection of guns, many are now considering who will inherit them in their estate plan. This is where the gun trust comes into play. “You want a mechanism where, if the person [owning the guns] loses capacity, someone can secure the assets, make sure they’re safe and make sure they go where people would want them to go.”
Benefits of the Gun Trust
There are two primary uses for a gun trust: easing the process of obtaining federally regulated firearms and easing the burden of possessing and transferring firearms between people in an estate plan. In regards to obtaining federally regulated guns, these are known mostly as Title II weapons. Title II weapons include such things as machine guns, silencers, and other firearms listed in the Gun Control Act of 1968.
The typical process to acquire a Title II weapon is to go through a fingerprinting and photo ID process, paying a tax stamp fee to the ATF, and getting the signature of a chief law enforcement officer that states that you should be allowed to possess such a firearm. With a gun trust, the trust itself can act as the purchasing agent for Title II firearms, easing the process for people who wish to make more than one purchase of these weapons.
Gun trusts also help with the transfer and possession of single firearms or weapons within an estate plan. A gun trust is particularly helpful when a gun-enthusiast passes away and the spouse has no knowledge about how to properly transfer the firearms to another person. If done incorrectly, you can be charged with a felony for improper transfer, even if you are passing it along to the person that it was intended for.
Legal Ramifications of Gun Trusts
The main benefit of a gun trust within an estate plan is that the trustee has knowledge of the proper state and federal procedures for transferring firearms from the estate to the intended beneficiaries. This includes notifying the proper authorities if Title II guns are crossing state lines as well as filing the proper forms with the ATF when possession of a gun transfers to an heir.
In addition, beneficiaries can also use a gun trust for income made off of the sale of the guns. The gun owner can control, through the details of the trust, where and how the profits of the sale of the gun collection should be used. The proceeds of the sale can go directly to the beneficiaries of the trust, or it can be set up as a charitable remainder trust to pass some of the proceeds to a worthwhile organization.