4 Things You Should Know About Gun Trusts
- WHAT are Gun Trusts?
A Gun Trust is more formally known as an NFA Multi-Generational Trust. The National Firearms Act (NFA) is an Act of Congress in the United States that, in general, imposes a statutory excise tax on the manufacture and transfer of certain firearms and also mandates the registration of those firearms. The NFA is also referred to as Title II of the Federal firearms laws. The Gun Control Act of 1968 ("GCA") is Title I. All transfers of ownership of registered NFA firearms must be done through the federal NFA registry. The NFA also requires that transport of NFA firearms across state lines by the owner must be reported to the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF, or BATFE). Gun Trusts are specifically tailored to comply with the NFA regulations of Title II items, also known as class 3 weapons. Class 3 firearms or NFA weapons, which consist of machine guns, sound suppressors, short-barreled shotguns, short-barreled rifles, and other devices.
- WHY is Estate Planning for Guns So Important?
Identifying and creating a succession plan for guns could be very necessary in several instances. For instance, if you create a Gun Trust, then your firearms will be registered to the trust, not to you in your individual name, which holds several benefits for you in your lifetime, if you are ever deemed incapacitated, and also for the beneficiaries of your estate. Some benefits of purchasing and owning firearms through a Gun Trust rather than a corporation, limited liability company (LLC) or even purchasing the items as an individual, include:
A.No need to file annual statements and no annual franchise taxes ( a savings of approximately $200 per firearm).
B.An NFA Trust will provide more privacy. In Florida, there is no requirement to register or record a Revocable Trust. Therefore, the contents and terms of the Trust are not public information. Only the ATF will have a record of your firearms.
C.With an NFA Trust, multiple individuals can be listed as the trustees, thus allowing more than one person to have legal access to the weapons. Individually-owned firearms restricts access to just you only.
D.If the transfer of NFA firearms to individuals becomes prohibited or severely restricted, which pending legislation might accomplish, the trust will continue to protect your assets for generations to come.
E. Since no fingerprinting requirement exists, the process of acquiring an NFA weapon will be shorter.
- HOW Does a NFA Trust Differ From a Revocable Living Trust?
An NFA trust is a separate and unique trust document that has been customized to deal with the specific legal issues surrounding the transfer, possession, and use of firearms that are restricted by the National Firearms Act. Each trust is customized to deal with the unique issues of ownership and possession that are required for ownership of these type of items. Many people do not know that in most states it is legal to own some or all class III firearms. Another common misconception is that an individual must have a "Class 3" in order to own NFA-classified firearms. This is problematic because legal possession of an NFA firearm by an individual requires transfer of registration within the NFA registry, not recognizing your weapon as such could result in confiscation of the firearm, fines and/or jail time! Furthermore, all NFA items must be registered with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). This means that private owners (owning a gun in your personal name) must obtain a signature from the Chief Law Enforcement Officer (CLEO), who is the county sheriff or city or town chief of police (who will not necessarily grant permission), pass an extensive background check to include submitting a photograph and fingerprints, fully register the firearm, receive ATF written permission before moving the firearm across state lines, and still pay the applicable tax. Many times law enforcement officers will not sign and withhold approval on NFA documents. Several well-known lawsuits were filed due to individual gun owners having been denied NFA approval for a transfer, including: Lomont v. O'Neill, Westfall v. Miller, and Steele v. National Branch.
4. WHEN Should I Start Planning for My Firearms?
NOW!! Firearms remain one of the most heavily regulated products in our country. Federal, state and local statutes and regulations can easily make criminals out of owners, misinformed personal representatives and/or trustees. Nearly imperceptible differences will separate a perfectly legal firearm from a prohibited one. These subtleties can also have a major effect on the appraised value of those firearms.
If you decide not to enact an NFA trust, and instead plan to devise your personal firearms through a will or have the state of Florida apply intestate (dying without a valid will) statutes, please take the following steps:
First, verify that that your personal representative (also known as the “executor") is not prohibited from actually possessing your firearms. You need to speak with your designated representative in advance to make sure that he or she is not only legally qualified, but also comfortable in potentially dealing with your guns. Under Florida law, a handgun may only be lawfully “transferred" (sold or given) to a dealer or to an individual who is legally eligible to receive it (adult, non-drug user, not convicted of a crime punishable for more than just 1 year in prison or a misdemeanor involving domestic violence). Specifically, most rifles, shotguns, pistols and revolvers in Florida remain freely transferable, but, the personal representative of your estate will need to take certain precautions, such as ensuring that the proposed transferee is not a disqualified person under Federal and/or State law, as listed herein. Not checking the background of the person being given the gun(s), could result in your designated representative actually facing fines, jail time and/or confiscation of the firearm! Also, what if you want to transfer firearms to a beneficiary who resides in another state? In that case, you will actually need to instruct your personal representative to have those firearms transferred by a DEALER in Florida to a DEALER in the recipient state, who will then transfer ownership to the intended beneficiary, after applying all applicable transfer fees and taxes and obtaining necessary signatories (which may not even be granted!).
Second, talk with your representative about the value of your collection. When you die (or become incapacitated), your designated representative must determine the total value of all of your assets. Unlike other type of assets, obtaining valuations for firearms may pose unique and unwanted complications. For instance, consider what may happen if your representative takes your handgun to a dealer to have it appraised. The dealer agrees to take the gun into her possession to determine the firearm’s value and also agrees to sell it on the estate’s behalf. Your representative goes back to the dealer to receive the appraised value and to take the gun back, but the dealer refuses to give the gun back. What can the representative do? In essence, nothing! Why? Under current law, concerning firearms, the dealer has done nothing wrong. She was simply following the law!!!
Third, be aware that the personal representative of your estate only has a reasonable amount of time to deal with the firearms before they may be confiscated by the ATF !!! It is important that you AND your personal representative know if your firearms are classified as Title I or Title II firearms, and that if classified as Title II, if those firearms are even able to be fully transferrable.
Please know that not transferring (selling or giving) firearms properly can result in fines, confiscation of the firrearm, and/or JAIL TIME for YOU or your designated beneficiary and/or representative!
**The hiring of a lawyer is an important decision and should not be based solely upon advertisements.Before you decide, ask me to send you free written informationabout my qualifications and experience.
LAW FIRM OF PAMELA HIGER POLANI, LLC.