A Gun Trust is a legal entity designed to hold firearms as an alternative to personal ownership. It is usually set up as specialized living trust with limited ownership of personal firearms and related accessories. A Gun Trust is most beneficial to individuals who intend to own federally regulated firearms, also known as Class II or NFA firearms. When properly set up, the Gun Trust promotes the responsible use of firearms and is completely legal.
1) What is a Gun Trust?
A Gun Trust is a legal entity designed to hold firearms as an alternative to personal ownership. It is usually set up as specialized living trust with limited ownership of personal firearms and related accessories. A Gun Trust is most beneficial to individuals who intend to own federally regulated firearms, also known as Class II or NFA firearms. When properly set up, the Gun Trust promotes the responsible use of firearms and is completely legal.
2) What are the benefits of a Gun Trust?
A properly drafted Gun Trust can expand the list of eligible NFA object “owners” or beneficiaries. The Firearms Trust may expand the list of persons who may own, use or transport an NFA firearm. Any current trustee is eligible, including the original trustee and any subsequently named responsible persons. For example, you can create a gun trust and then add your spouse and children as trustees or beneficiaries.
A well drafted Gun Trust can prevent unintentional crimes. The Gun Trust strictly prohibits the unauthorized use and handling of NFA firearms during the lifetime of the original Trustee and after his death, and will inform all concerned of the relevant laws and regulations. For example, a well-drafted Gun Trust document clearly states who is allowed to use and own NFA firearms and who is not. This language often helps prevent unintentional crimes by the guardian and the guardian’s family.
Estate planning. Upon the incapacity or death of the original trustee, a successor trustee is appointed to administer the trust and to keep and distribute the firearms without probate or other court intervention (All ATF rules apply for transferring NFA items outside of the trust).
Protection of inheritance. After the incapacity or death of the original trustee, the Gun Trust can provide long-term protection against the creditors of the beneficiaries and in the event of the bankruptcy or divorce of the beneficiaries.
3) Do all gun owners need a gun trust?
No, however, a gun trust may be appropriate in many cases due to its estate planning and inheritance protection features.
4) How about using an existing trust, corporation or LLC instead?
The Gun Trust includes specific provisions for the Gun Control Act and related regulations, while other trusts rarely do. For example, a typical living trust may allow the distribution or handling of firearms to or by a prohibited person without considering the unique legal issues involved.
In Arizona, a firearms trust is a better choice than a corporation or LLC because business entities must be registered with the Arizona Corporation Commission. The Gun Trust is governed under private law and is not subject to the supervision of any state agency in Arizona (of course, all AFT rules and regulations apply).
