Many gun owners consider a “gun trust” to administer (share, use with others) certain federally regulated firearms. But as you will see below, this is ONLY the tip of the iceberg… and there are many more significant benefits to be gained.
First, 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-barrel rifles and shotguns, suppressors, destructive devices, and Any Other Weapons (AOWs). Washington State further restricts the possession and use of these weapons. In Washington it is legal to own and use suppressors, short barrel rifles, destructive devices, and AOWs as long as the NFA regulations are followed.
Under the NFA there are two ways to acquire Title II weapons: individually or through an entity. In 2016, ATF published Rule 41F which requires individuals AND “responsible persons” of an entity to provide fingerprints, a photograph, and to undergo a background check with an application to transfer an NFA firearm, in addition to paying the required $200 application fee/tax ($5.00 for an AOW). Notice of the application is provided to the Chief Law Enforcement Officer (CLEO) in the jurisdiction in which the applicant resides.
Some gun owners feel that since they have to submit documentation to acquire an NFA firearm that the need for a gun trust was eliminated. In our opinion, which ATF attorneys have agreed with, is that a well-written gun trust remains the BEST way to share private firearms, especially NFA firearms.
Individual ownership is not the best way to own Title II (NFA) firearms. Only the person whose name the weapon is registered to will be entitled to use the items. If the person is an individual, then that individual must be with the NFA firearm at all times. An “unauthorized transfer” is broadly defined, and depending on the circumstances, could 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.
A trust is defined as a person under Title II. If you create a trust as the “grantor”, you generally serve as a trustee and can appoint one or more co-trustees. Under federal law, a trustee has the right to possess Title II firearms owned by the trust. Now, there are some issues with transfers to a person who resides in another state (Title I), and even more under state laws such as Washington and Oregon which require background checks on all transfers, absent an exception. But avoiding a potential federal felony charge possibly resulting in a 10 year sentence, $250,000 fine, makes using a gun trust a smart move. And, with an attorney available to design your trust and help you understand both federal AND state gun law work… you will be far safer in your enjoyment of the firearms you own.
Our goal is to protect you, everyone you love, and everything you own… starting with your gun collection!
There are several advantages to using an entity to purchase and hold ALL firearms, even if you start with NFA firearms:
• Greater flexibility in allowing possession
• Providing written instructions about lawful possession of firearms
• Appointing specific people to handle firearms if you are incapacitated or should die
• Making certain that your firearms go to the RIGHT PEOPLE.
Should you consider a corporation or LLC for a personal firearms collection? Usually no – the best answer for most gun owners is a GunDocx® firearms trust.
Corporations, LLC’s, and non-profit 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. Further, these types of entities are designed to earn money…not to hold, share, and distribute assets. It is unclear who has authority to possess firearms… and most gun owners are social beings who want to “share.”
In contrast, a trust does not require any fees with the state. Because trusts are primarily an estate-planning tool, they are designed to hold, share, and distribute assets; they are easy to customize to carry out your goals. Your attorney helps you get creative within gun law. So, while it is true that a person could use a free trust provided by a gun shop (which may be the “unauthorized practice of law”) or download one from a discount online source to obtain NFA weapons, these trusts are plain vanilla and are unlikely to protect your family and friends adequately. Having reviewed many of them, they tend to be generic, not written to address federal and state gun law, and may grant powers to trustees that could be criminal in some circumstances.
Our GunDocx® 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.
Typically, a firearms collection is the product of one spouse’s interest. The other spouse tolerates this interest, but does not care nearly as much about the items that have been accumulated. Due to death or disability, the disinterested spouse or other 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 may make a mistake as to the applicable laws. A violation of the applicable laws usually results in the commission of a felony.
Because a GunDocx® 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 GunDocx® 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/generic revocable living trust. The GunDocx® trust specifically allows for any named trustee, successor trustee, and any named beneficiary to have the ability to use the trust assets. There is even a provision that will deem any person that you are shooting with a beneficiary of the trust. The trust also allows for the formal appointment of beneficiaries for a limited duration with a set expiration date. Best of all, we have multiple options to fit your goals and budget, and you can easily upgrade to a higher version at any time.
A GunDocx® firearms trust has 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.
With us, you have an attorney who can explain firearms law and how it works. We can help you with your estate, business or other matters over and above the issue of firearms.
If you have any questions or would like to learn more about a GunDocx® firearms trust, please do not hesitate to contact a Northwest Gun Law Group attorney.