Whether you are new to the world of guns or you have been a collector for decades, there is a part of gun ownership that many people do not take into consideration, and that’s what happens to your guns when you die. Don’t beat yourself up too much, as no one really wants to think about that topic. This is why it’s important to think about gun trusts.
In the case of firearms, it can get very complicated very quickly if the right steps are not taken before your passing, and it’s a bit more than just listing your weapons in a living will. Or perhaps you own an NFA Title II weapon and you want to gift it to an heir; if your family is not aware of the laws of their state, they may be committing a felony by taking your weapons into their possession.
Another avenue that many people don’t consider is if the unlikely circumstances arise and you are no longer legally able to own your weapons. This could be that you are facing felony charges or a mind-altering disability that disallows your ownership of firearms. The government is not going to care that you have an antique collection or an heirloom that has been passed down for generations. In order to gain protection for your firearms, you may consider an NFA Gun Trust.
A Brief History of the National Firearms Act
The laws in America regarding gun ownership are vast. Considering the 2nd Amendment to the Constitution, the people ensure that the government has limited power over what firearms they can own. Of course, over the years as firearms and our society progress, so do the laws. To fully understand the purpose and necessity of an NFA Gun Trust, there are some key historical acts and laws that you need to first understand. This will help explain certain allowances, protections, and taxes.
National Firearms Act (NFA)
The original National Firearms Act passed in 1934 and imposed a tax on any manufacturing or transferring of firearms as they were defined. It also imposed an occupational tax on individuals and entities that conducted business in importing, manufacturing, and sales of NFA firearms. And it is required for all NFA firearms to be registered with the Secretary of the Treasury. These firearms included:
- Shotguns and rifles having barrels less than 18 inches in length
- Machine guns
- Firearm mufflers/silencers
- Certain firearms listed under “any other weapons” (AOW)
Basically, the overarching goal of the NFA was to diminish, if not eliminate, the ownership of NFA firearms and disallow their transfer after their owner’s death. The reasoning was based on the perception that a large amount of crime, specifically gang-related, involved these types of weapons.
When the St. Valentine’s Day Massacre occurred, it strengthened the resolve of lawmakers to enact the NFA. At the time when the $200 tax stamp was created for NFA firearms, it was a significant fee, which made NFA items largely unobtainable for most civilians. While inflation has made that $200 less obscene now, the taxed items have not changed even today.
While the tax fee has stayed the same, many other elements of the original act have been restructured. In 1934, there was a catch-22 issue that penalized individuals who applied to register an NFA firearm if their firearms were not registered with the state. The Supreme Court ended up siding with the citizens and deemed that information voluntarily given to the Treasury Department for the NFA registration was protected under the Fifth Amendment regarding self-incrimination. This is now known as the Haynes Decision which basically rendered the Act moot.
Gun Control Act (GCA) of 1968
In 1968, the inherent issues with the NFA were solved with Title II of the Gun Control Act. It completely eliminated the requirement for individuals to register their firearms. Therefore, any NFA firearm that was possessed before the act forgoes any necessity to be registered (that is, until the passing of the owner). Another amendment that was added was verbiage to protect gun owners from prosecution by making it illegal to use any information in the NFA application process as evidence that the individual violated any state or local requirements.
In addition to these protections, the GCA also expanded the NFA firearms list which is commonly referred to as a Title II weapon/firearm. Now, “firearms” also included “destructive devices”. The Gun Control Act was deemed constitutional during the Freed case which solidified the NFA as it exists today.
Firearm Owner’s Protections Act
The NFA firearms list also included “silencers” as an accessory that must be registered. In 1986, the definition of “silencer” was amended by the Firearm Owners’ Protection Act which was expanded to include any part(s) that were possessed with the intention to assemble or utilize a silencer. The Firearm Owner’s Protections Act also made the transfer or possession of machine guns as defined by the GCA illegal. This did not apply to government agencies or those that owned the firearms prior to the prohibition.
That covers the history of the NFA. Next, we’ll look at everything you need to know about Gun Trusts, and how to obtain your own. In short, you should absolutely use Gun Trust NFA to quickly create a NFA Gun Trust.
So What IS a Gun Trust?
With the constantly fluid and ever-changing laws regarding gun ownership in America, gun trusts were created as a type of protection from the government. Just like the NFA, acts and laws can be established tomorrow that seriously affect your gun ownership status. Depending on the law, it could prohibit you from owning or transferring many, if not all, of your firearms. That is how gun trusts were formed.
You can find a thousand answers for this question and routinely get complicated answers that are difficult to follow. To put in the simplest of terms, a gun trust (like financial trusts) is an account that you can transfer the title of your gun(s) to which is then held and managed by a third party to ensure that the transition of your gun/accessories is transferred to your beneficiary in certain circumstances such as death or incapacitation.
The reason that gun trusts became common was for Title II weapons classified under the National Firearms Act which includes, but is not limited to, fully automatic machine guns, short-barreled shotguns, and restricted accessories such as a suppressor. They were created because if you were a qualified individual who legally owned a Title II weapon, the law read that you would be the only person legally allowed to handle that firearm.
This means that no one else can possess or shoot the firearm, even within the same household or it would be considered a felony offense. A gun trust allowed the ownership to be transferred to the trust and qualified trustees listed to legally be able to possess the weapon.
Therefore, you will commonly see gun trusts listed as NFA (National Firearms Act) Trusts. These NFA trusts can be misunderstood to be only applicable to Title II weapons, but this is inaccurate. You can actually transfer the ownership of any of your firearms to an NFA Gun Trust regardless of if the weapon is Title I (most firearms) or Title II.
1. Types of Gun Trusts
There are two types of gun trusts you will see: revocable or irrevocable. If you choose a revocable gun trust (most common), you will be able to make amendments to the trust terms and parties to include changing beneficiaries or co-trustees. These elements of the trust can be changed at any time. An irrevocable gun trust is just that; once you sign on the dotted line, there is no going back.
Some may be wondering why you would choose an irrevocable gun trust. This could be for estate and/or tax purposes. Once an irrevocable gun trust is set, then the property is effectively removed as a possession from the individual’s estate and there are no inherited taxes when passed along to an heir.
Also, there is a way that a revocable gun trust can become irrevocable. If a revocable gun trust was put into place and the grantor passes, then there will be a timeframe allocated from the date of death that may allow for changes to be made by other involved parties. If that timeframe passes, no more changes can be made, and the gun trust becomes irrevocable.
2. The Pros and Cons of an NFA Gun Trust:
There are many reasons why you will want to get an NFA Gun Trust. Most of them will simply be for the legal and estate protections that come with the trust as well as the convenience of avoiding federal requirements that relate to transferring ownership of a firearm. But there is also convenience and peace of mind that are attached as well.
First, let’s look at the pros of having a gun trust.
Your Executor Will Thank You
Whoever you name as the executor of your estate will already have a lot on their plate. Along with their grief, they will have to deal with any assets, debts, and execution of any Wills. And if your executor is not familiar with gun laws, dealing with inherited firearms can be a legal nightmare. You could place your executor in a lot of trouble if they take possession of your firearms and they are not in a gun trust.
The Gun Control Act covers the issues as far as possession, transference, and/or traveling with the weapon to certain states. Also, if your executor has been convicted of a felony, domestic violence, or has any other legal restraints from possessing a firearm, you’ve just put them in hot water. However, when you have an NFA Gun Trust, your executor never needs to handle the firearms directly at all.
No Probate
After the passing of an individual, the property is not just distributed immediately by the executor. Many times, an estate, or elements of it, will have to go through probate court to determine that all property, debts, and other assets go to the right party. If you have placed your firearms in a gun trust, the probate court is completely avoided, and the firearm(s) can be passed down accordingly.
Longevity
The gun trust can last far beyond your passing which builds inherent protections for your property and those that inherit the firearms. And because the NFA Gun Trust owns the firearms and your trustees are simply granted certain privileges, no ownership transfer occurs within the trust. The firearms can simply stay registered to the trust and the process of paying a $200 transfer tax (also known as a tax stamp). Filling out ATF paperwork, or having to go through other ATF requirements and additional background is not necessary.
Multiple person possession allowances
If you own a Title II weapon, you are the only person who can possess, store, or utilize it without criminal consequences. If the weapon is placed in a gun trust, then any person that you name as a trustee immediately has the same rights as you do with the weapon. This means that when you go to the shooting range with your trustees, you don’t have to worry about a person picking up your firearm and immediately having committed a felony.
That covers most of the benefits of having a gun trust. Next, let’s look at some of the potential drawbacks to them.
Costs
There are a couple of costs that come with the set-up process for a gun trust. First, you will be required to obtain an NFA tax stamp with $200 for all firearms listed in Title II or $5 for AOW (all other weapons) if listed in an NFA Gun Trust.
Note that an NFA tax stamp is required for Title II firearms before you purchase or manufacture the weapon regardless of being registered to a gun trust or an individual.
Also, most gun trusts have a processing fee when establishing the trust. These fees can vary widely, but going the online route, such as Gun Trust NFA, will be substantially cheaper than having a lawyer draft your trust.
The Law is Still the Law
A gun trust can allow you to possess restricted firearms, but it does not grant you the ability to ignore local law. Certain states prohibit certain weapons or suppressors so regardless of whether you have them listed in a gun trust, you cannot possess them in those states or else you could be facing criminal charges.
An extension of this is that you cannot list a trustee on the gun trust for a weapon that they would not legally be able to possess to include felons or minors for certain weapons. The gun trust does not override these laws. It’s a good idea to always check with your state of residence to ensure you are up to date with all local laws and regulations.
It Takes Time
Depending on how you choose to set up your NFA Gun Trust, it could take some time. Once you have completed the application paperwork, it could take upwards of a month to be put into effect, although the typical time frame is about a week. It all depends on how fast the ATF wants to move on the trust.
Lots of Paperwork
There is a lot of ATF paperwork that needs to be filled out, signed, and notarized by all parties involved along with forms for the NFA Gun Trust. It can be tedious, but the ATF forms are listed below under the DIY section. Again, using Gun Trust NFA makes this process simple, and the downloadable packet gives you everything you need to establish your trust and start.
Extra Items to Carry
You will have to carry a photocopy of the notarized trust with you along with your tax stamp any time that you are shooting or transporting the NFA firearms or items. While it may be an inconvenience, forgetting it can cause a whole heap of problems. In fact, some companies will offer shrink and lamination services for your trust documentation so you can easily carry it with you.
Now that we’ve looked at the pros and cons of establishing a gun trust, let’s talk through the roles that individuals play in the trust itself.
3. Parties Involved with a Gun Trust
Many people will need to be a part of drawing up an NFA Gun Trust and a lot of the “lawyer talk” that makes a gun trust confusing is simply labeling these people. Once you understand who plays what role, and gun trust becomes a lot simpler to understand.
The Grantor/Settlor
The grantor or the settlor is the individual(s) that creates the gun trust and is responsible for maintaining it and amending it (for revocable trusts). The gun trust benefits the grantor for the entirety of his/her lifetime. The grantor can place any and all firearms into the gun trust and will maintain controlling power to amend a revocable gun trust. They can add and remove trustees and property even through that of a legal will up until the point that the gun trust becomes irrevocable after the death of the grantor.
Co-trustees
Co-trustees are the people the at are responsible for the trust and they have the same legal authority to possess and use the weapons in the trust as the grantor once the trust is established.
All trustees must be legally able to own and operate a firearm meaning that they all must be at least 18 years of age and have no criminal records. To list them on the NFA Gun Trust, they will need to submit photos and fingerprints along with ATF Form 5. Co-trustees will have the ability to possess, transport, and use the weapons in the gun trust without the owner.
Successor Trustee
A successor trustee is a person that would take possession of the trust when the grantor and co-trustees pass away. This does not mean that they are responsible for the trust.
Successor trustees will have the ability to use the weapon only within the presence of the grantor. You should ensure that there is language included for the NFA Gun Trust that will automatically remove a successor trustee if the individual becomes unable to fill the role due to legal issues, mental debilitation, or perhaps passes before the grantor. It is highly suggested to have at least two successor trustees listed.
In a properly executed gun trust, the successor trustee will be provided with all the support in dealing with the transfer of the firearms. This could include transfer forms and reimbursement costs. Due to unknown and changing laws, do not limit your trustees with a lot of verbiage that could trip them up. Allow them to have the discretion to adhere to the law and transfer the firearm accordingly.
If their rights are too limited, they may not be able to transfer or distribute a firearm to a beneficiary due to location or other circumstances. Do, however, make sure that there is a clause that has a plan B in the circumstance that your beneficiary is no longer eligible to own a firearm.
Beneficiary
Your beneficiary or beneficiaries are the people that will gain ownership of the firearms in the NFA Gun Trust when the grantor passes. A beneficiary is not at all responsible for the gun trust and is only actively involved in they are also listed as co-trustees. As in all cases, the beneficiary must be able to legally own a firearm. You may list a secondary beneficiary in the case that your first beneficiary cannot take possession of the firearm for any reason.
And because the world is always changing and the future is unknown, you should have an ultimate last resort written into the gun trust as a coverall. In the case that all your beneficiaries are unable to take possession of your firearms, you may propose a charity that can take responsibility for the firearms.
Of course, it is preferable if the organization knows how to utilize and/or dispose of the firearm(s), and often, the National Rifle Association is listed. If your firearms are of historic value, you can create the trust to be dynamic so that it stays within your family in perpetuity or you can list a museum that would understand its value.
4. I’m In! Now How Do I Get a Gun Trust?
Alright, now that you have a pretty good idea as to what an NFA Gun Trust is, how do you go about creating one? It all depends on what you are willing to pay. Remember, no matter what, you must pay the ATF tax stamp of $200, but that isn’t necessarily the only cost. From cheapest to most expensive, here are your options:
Do It Yourself
If you are wanting to save some money and have the time to do it, you can most definitely can. You can spend a small amount on a DIY template but beware that they may not be ATF compliant. The best way to do it yourself is to go to the AFT NFA branch nearest you and get the process started in person. While this is the cheapest route, it is highly likely that you may use language that will make the trust hard to hold up in court.
As such, we highly recommend going with one of the other methods listed below. If you do choose to go the DIY route, you’ll need some specific ATF forms, depending on if you are using Title I or Title II weapons.
Title I Firearms
Title I firearms are ordinary rifles, pistols, revolvers & shotguns. Title I firearms can be owned by citizens and can be built by citizens.
Ownership Requirements: Can be owned by anybody who isn’t considered to be a prohibited person by the ATF.
Form Used: The ATF 5300.9 – 4473
Title II Firearms
Title II firearms are machine guns, silencers/suppressors/mufflers, short barreled-rifles, short-barreled shotguns, and any other weapons (AOW).
Ownership Requirements: Can be owned by anyone not deemed a prohibited person and receives an ATF approved Tax Stamp.
Forms Used:
- ATF 5320.1 Application to Make and Register a Firearm
- ATF 5320.4 Application for Tax Paid Transfer and Registration of Firearm
- ATF 5320.5 Application for Tax Exempt Transfer and Registration of Firearm
Online
Online is most likely the easiest option, if you are willing to pay a small fee. There are many online companies that you can use, however you want to ensure that they are reputable and not scams. Do your own research, but we highly recommend Gun Trust NFA. Gun Trust NFA offers top notch customer support, and an affordable price of $99. Lawyers have reviewed the trust documentation, and it is ATF compliant.
If you choose the online option, please remember that it is still your responsibility to ensure the trust will work in your state. Always verify before moving forward with any gun trust.
Using a Lawyer
If your situation is not straightforward and you have multiple parties with perhaps different clauses that may not be common, perhaps forking up a few hundred dollars for a gun trust lawyer is the way to go. When it comes to firearms, the law is king, and an incorrectly drafted NFA Gun Trust can lead to a lot of legal issues either for you, your trustees, or your beneficiaries. If you are financially able, it can be a great idea to go through a gun trust lawyer.
Besides the mere fact that a gun trust lawyer builds their livelihood around knowing the laws surrounding gun trusts, it is also very convenient to have someone with knowledge walk you through the many requirements needed for the process. The time it takes to fill out forms, create legal clauses to fit your needs, and other requirements are diminished drastically. A knowledgeable lawyer has the “cut and paste” forms needed for any gun trust and the know-how to customize it exactly to your needs.
In addition, you have support if a circumstance ever arises regarding your gun trust and the ATF. If you decide to DIY your NFA Gun Trust, there will be no additional support here. And in legal situations dealing with the ATF, having your lawyer’s number listed in your contacts is a nice perk. Also, if it is found that the lawyer made a mistake in the draft, they have insurance to cover themselves and your situation.
5. What Not to Do with a Gun Trust
Some common mishaps occur when drafting an NFA Gun Trust and while the mistakes may seem minor, the consequences can be life-altering. Look at the following mistakes that are common and be one step ahead by avoiding them altogether.
Legally Transfer Assets
You must legally transfer ownership of all the firearms and accessories to the gun trust (not just list them). If this does not occur, the trustees cannot legally possess or use the firearms and can be charged with a felony.
Have All Parties Present
When it comes time to sign on the dotted line, make sure you know your state’s requirements for a notarization. Some states require all parties to be present to have the trust notarized. There is no bigger frustration than thinking you’re almost done and then leaving because you didn’t know your trustees had to be present.
The Law is Still the Law
As discussed earlier, the gun trust does not change the law. It simply creates a way for the law to be extended to other parties. If your NFA weapons are not legal in certain states, your gun trust does not change that. Ensure that your weapons can be owned in your state or transported to a state you may be traveling to.
I Have a Gun Trust, Now What?
There have been a lot of laws and an immense amount of history that have affected the formation of gun trusts. The gun trusts have become a way to protect your property at the time of your death and allow you as a responsible gun owner to allow access to your weapons to other responsible parties.
While there is a cost associated with a gun trust as well as what seems like a lot of forms and time, in the long run, the protections that you receive for your beneficiaries, trustees, and your property is worth it.
Now that your firearms are secure in the gun trust, make sure to check on it, the laws, and your involved parties regularly. Make sure that those listed on your trust remain “responsible persons”. Also, just like a will, you can make changes to it fit your life (if it is revocable). Make sure you remain aware of the gun laws regarding your firearms. Even though they are in a trust, it is your responsibility as a gun owner to remain in compliance as the laws change or are amended.
The Legal Jargon
If you are that person who strives on definitions, legal history, and application processes, here is some key information that you should be aware of regarding NFA Gun Trusts.
26 U.S. Code § 5845.Definitions
(a)Firearm
The term “firearm” means (1) a shotgun having a barrel or barrels of less than 18 inches in length; (2) a weapon made from a shotgun if such weapon as modified has an overall length of less than 26 inches or a barrel or barrels of less than 18 inches in length; (3) a rifle having a barrel or barrels of less than 16 inches in length;
(4) a weapon made from a rifle if such weapon as modified has an overall length of less than 26 inches or a barrel or barrels of less than 16 inches in length; (5) any other weapon, as defined in subsection (e); (6) a machinegun; (7) any silencer (as defined in section 921 of title 18, United States Code); and (8) a destructive device.
The term “firearm” shall not include an antique firearm or any device (other than a machinegun or destructive device) which, although designed as a weapon, the Secretary finds by reason of the date of its manufacture, value, design, and other characteristics is primarily a collector’s item and is not likely to be used as a weapon.
(b)Machinegun
The term “machinegun” means any weapon which shoots, is designed to shoot, or can be readily restored to shoot, automatically more than one shot, without manual reloading, by a single function of the trigger.
The term shall also include the frame or receiver of any such weapon, any part designed and intended solely and exclusively, or combination of parts designed and intended, for use in converting a weapon into a machinegun, and any combination of parts from which a machinegun can be assembled if such parts are in the possession or under the control of a person.
(c)Rifle
The term “rifle” means a weapon designed or redesigned, made or remade, and intended to be fired from the shoulder and designed or redesigned and made or remade to use the energy of the explosive in a fixed cartridge to fire only a single projectile through a rifled bore for each single pull of the trigger, and shall include any such weapon which may be readily restored to fire a fixed cartridge.
(d)Shotgun
The term “shotgun” means a weapon designed or redesigned, made or remade, and intended to be fired from the shoulder and designed or redesigned and made or remade to use the energy of the explosive in a fixed shotgun shell to fire through a smooth bore either a number of projectiles (ball shot) or a single projectile for each pull of the trigger, and shall include any such weapon which may be readily restored to fire a fixed shotgun shell.
(e)Any other weapon
The term “any other weapon” means any weapon or device capable of being concealed on the person from which a shot can be discharged through the energy of an explosive, a pistol or revolver having a barrel with a smooth bore designed or redesigned to fire a fixed shotgun shell, weapons with combination shotgun and rifle barrels 12 inches or more, less than 18 inches in length, from which only a single discharge can be made from either barrel without manual reloading, and shall include any such weapon which may be readily restored to fire.
Such term shall not include a pistol or a revolver having a rifled bore, or rifled bores, or weapons designed, made, or intended to be fired from the shoulder and not capable of firing fixed ammunition.
(f)Destructive device
The term “destructive device” means:
(1) any explosive, incendiary, or poison gas (A) bomb, (B) grenade, (C) rocket having a propellent charge of more than four ounces, (D) missile having an explosive or incendiary charge of more than one-quarter ounce, (E) mine, or (F) similar device;
(2) any type of weapon by whatever name known which will, or which may be readily converted to, expel a projectile by the action of an explosive or other propellant, the barrel or barrels of which have a bore of more than one-half inch in diameter, except a shotgun or shotgun shell which the Secretary finds is generally recognized as particularly suitable for sporting purposes; and
(3) any combination of parts either designed or intended for use in converting any device into a destructive device as defined in subparagraphs (1) and (2) and from which a destructive device may be readily assembled.
The term “destructive device” shall not include any device which is neither designed nor redesigned for use as a weapon; any device, although originally designed for use as a weapon, which is redesigned for use as a signaling, pyrotechnic, line throwing, safety, or similar device; surplus ordnance sold, loaned, or given by the Secretary of the Army pursuant to the provisions of section 7684(2), 7685, or 7686 of title 10, United States Code; or any other device which the Secretary finds is not likely to be used as a weapon, or is an antique or is a rifle which the owner intends to use solely for sporting purposes.
(g)Antique firearm
The term “antique firearm” means any firearm not designed or redesigned for using rim fire or conventional center fire ignition with fixed ammunition and manufactured in or before 1898 (including any matchlock, flintlock, percussion cap, or similar type of ignition system or replica thereof, whether actually manufactured before or after the year 1898) and also any firearm using fixed ammunition manufactured in or before 1898, for which ammunition is no longer manufactured in the United States and is not readily available in the ordinary channels of commercial trade.
(h)Unserviceable firearm
The term “unserviceable firearm” means a firearm which is incapable of discharging a shot by means of an explosive and incapable of being readily restored to a firing condition.
(i)Make
The term “make”, and the various derivatives of such word, shall include manufacturing (other than by one qualified to engage in such business under this chapter), putting together, altering, any combination of these, or otherwise producing a firearm.
(j)Transfer
The term “transfer” and the various derivatives of such word, shall include selling, assigning, pledging, leasing, loaning, giving away, or otherwise disposing of.
(k)Dealer
The term “dealer” means any person, not a manufacturer or importer, engaged in the business of selling, renting, leasing, or loaning firearms and shall include pawnbrokers who accept firearms as collateral for loans.
(l)Importer
The term “importer” means any person who is engaged in the business of importing or bringing firearms into the United States.
(m)Manufacturer
The term “manufacturer” means any person who is engaged in the business of manufacturing firearms.
Tying it All Together
If you’ve made it this far, you understand pretty much all there is to know about gun trusts. You should feel confident in your decision moving forward. Know that the effort of establishing a trust is well worth the time, especially when dealing with items such as firearms. We outlined a variety of methods that could work, and hope it was informative and sets your mind at ease.
While it’s up to you to decide what’s best for you, we’ll reiterate once more that Gun Trust NFA is the right blend of cost and ease. It takes just a few minutes to enter in your data online and get your trust paperwork. From there, follow the simple instructions or ask any of the customer support representatives questions that you have.
Whatever path you choose, we hope you stay safe!
