There have been some recent controversies about whether or not a trust beneficiary, as opposed to a trustee, 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 (or in close physical proximity). The answer will depend on trust design, state law, and consideration of relevant federal law and ATF’s position.
Having corresponded at length with NFA Branch and the BATFE Office of General Counsel on this precise issue, the BATFE itself is a bit unsure, since BATFE depends on state trust law in determining the requirements of trust administration. The NFA Handbook and FAQs on the BATFE website give some slight assistance on this… but not clarity.
The Trust documents that I advise require that:
Trustee/Grantor documents the status of the person as a beneficiary and as a Special Trustee in writing.
Next, the Beneficiary/Special Trustee signs the form making clear that he/she understands trust requirements and limitations on benefits.
Next, the Beneficiary signs the form indicating that he or she is not a prohibited possessor, and they receive a copy of the Form 4 to keep with trust property and available for law enforcement review.
Beneficiary is given Trustee’s contact information and a number to the gun trust attorney
Here are the cautionary notes:
· A beneficiary cannot let others use firearms under the “umbrella safety clause" built into GunDocx, only a Trustmaker or a Trustee has the authority.
· 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.
· This gray area is 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.
· REGARDLESS of this “technical right," having a Trustee physically present, administering benefits, is the safest course to take.
Lisa Kurtz Keylon is licensed to practice law in the State of Arizona. The law firm of Lisa Kurtz Keylon, PLC provides legal services for clients in the State of Arizona. The information provided on this website, our newsletters and blog is general and educational and neither should be construed as legal or tax advice, nor does the use of the website create an attorney/client relationship. Laws of specific states or laws relevant to a particular situation may affect the applicability, accuracy or completeness of this information which cannot take the place of one-on-one personal, legal consultation and advice. Federal and state laws and regulations are complex and subject to change. No legal representation is created, and we make no warranties with regard to the information or results obtained by its use. Neither the authors nor anyone forwarding or reproducing this work shall have any liability or responsibility to any person or entity with respect to any loss or damage caused, or alleged to be caused, directly or indirectly, by the information contained in this website or blog.