Can a Beneficiary be in Sole Possession of an NFA Firearm? 

Recently I have become aware of some controversy about whether or not a trust beneficiary can be in sole possession of an NFA firearm that is trust property.  This question is related to whether or not a Trustee must be physically nearby…  the answer will depend on trust design, state law, and consideration of relevant federal law and ATF’s position.

I have corresponded at length with NFA Branch and the BATFE Office of General Counsel on this precise issue.  ATF itself is a bit unsure, since ATF depends on state trust law in determining the requirements of trust administration.  The NFA Handbook and FAQs on the ATF website give some slight assistance on this… but not clarity.

At least one lawyer I know has taken the position that only Trustees can safely possess NFA firearms.  He advocates naming multiple Trustees…  This is certainly a safe and conservative approach.  I take issue with it, though, since this position is not consistent with state law or with the way in which our GunDocx trusts are drafted.

Here is a real-life question from a GunDocx Lawyer, and my answer.  It points out the advantages and flexibility of using the GunDocx system… and also some gray areas in the law.

“I’m preparing a Gold trust for a client and I want to make sure I understand the distinction between, and proper use of, the “Addition of Lifetime Beneficiary”  and “Permission to use Trust Property” ancillary documents. Is the following example a correct use of the two documents:

John Doe is grantor and trustee of the John Doe GunDocx Trust.  He wants to let his friend Mark use a suppressor owned by the trust on Mark’s upcoming hunting trip. John executes an “Addition of Lifetime Beneficiary” naming Mark as the beneficiary for 30 days. He places this in his trust binder.   John then executes a “Permission to Use Trust Property” and gives this to Mark for Mark to bring with him on his hunting trip in case he needs to prove to law enforcement that he is in legal possession of the weapon.

Is this correct or is there a different intended/proper use of these two forms?

These are some really good questions.  That was the intent of those documents.

Be warned that what I think is LEGAL may not be PRUDENT. 

1. Trustee/Grantor documents the status of the person as a beneficiary in writing.
2. Next, the Beneficiary signs the form making clear that he/she understands trust requirements and limitations on benefits.
3. Beneficiary is provided a copy of the trust, a copy of the Forms 4 required, etc. for the Beneficiary to keep with trust property and available for law enforcement review.
4. Beneficiary is given Trustee’s contact information and a number to the gun trust attorney!

Here are the cautionary notes.

1. A beneficiary cannot let others use firearms under the “umbrella safety clause” built into GunDocx.
2. Giving ANY other person use of your firearm means that you assume risk of gross or simple negligence claims being brought against YOU, the owner, if an injury results.
3. My opinion is that where a GunDocx Trust, valid under state law, is used the trust lawfully permits a beneficiary to use  trust property without a trustee being physically present, such as NFA firearms and conventional firearms, so long as the person is not otherwise prohibited from possession.
4. AGAIN – assuming that I am correct and this is legal… should you do it?  Certainly having a Trustee physically present, administering benefits, is the safest course to take.  That said, a properly designed trust that is valid under state law should permit the Trustee the discretion to make such decisions.