A firearm with bullets on the side sitting on a table.

We’re Texans, and we love our guns. In fact, Texans own more National Firearms Act weapons than any other state.

And that is why we all need to know about gun trusts.

A gun trust is a convenient method to own an NFA firearm and comply with the fairly complex Federal laws. Why is that important?  Because violating the Federal gun laws can result in fines (up to $10,000), imprisonment (up to 10 years), and forfeiture of the weapons.

The Gun Control Act of 1968 has two classifications of weapons: Title I and Title II. Title I refers primarily to rifles, shotguns and handguns, which are generally regulated by state law. Title II weapons are usually referred to as NFA firearms, and include machine guns, shotguns having a barrel of less than 18 inches in length, silencers, a rifle with less than 16 inches in length, destructive devices and “any other weapon.”

The Secretary of the ATF has a central registry for all NFA firearms. A potential owner must be registered before actually possessing the firearm. As of July 13, 2016, this registration requirement was expanded to include beneficiaries of a gun trust. The registration is done by submitting a document called “Form 4, Application for Transfer and Registration of Firearm.”

When the owner of an NFA firearm dies, the weapon becomes part of his probate estate. The ATF will only communicate with the lawfully appointed executor of his estate. The executor has constructive possession of the firearm, which can cause all sorts of problems. For example, the executor may live in a state (like California) that actually prohibits ownership of that particular firearm.

The executor won’t be the registered owner of firearm, which means that he probably won’t be able to get the firearm appraised or insured. And he will have trouble distributing the firearm to the named beneficiary if that beneficiary can’t qualify under law to own the weapon.

A gun trust avoids these problems. The gun trust is a specialized type of revocable living trust. In this scenario, the gun owner would transfer ownership of his NFA firearms to the trustee of the gun trust. When the gun owner dies, the trustee still has title to the guns through the gun trust, and the new beneficiaries are the people named in the trust document. The weapons do not go through the probate administration, and do not have to be listed in a publicly filed inventory.

The ATF considers a gun trust a legal entity. An NFA firearm can be registered to the trust. The trust can have any number of trustees, each of whom can legally possess an NFA firearm registered to the trust. Transferring possession of the firearm between the trustees is not considered a “transfer” under Title II.

A gun trust should be an integral part of any gun owner’s estate plan.

Hammerle Finley Law Firm. Give us a call. We can help.

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The information contained in this article is general information only and does not constitute legal advice.