Use a Firearm Trust to Protect Yourself and Your Investment in Guns

Monday, 04 Mar 2013 07:43 AM

By Denis Kleinfeld

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The American culture includes a tradition of gun ownership legally reinforced by the Constitution to "keep" and "bear" arms.

Estimates that I have seen say that 47 to 50 percent of Americans acknowledge gun ownership. In terms of the number of guns, the estimates are that there are some 300 million rifles, shotguns and pistols in the hands of the people.

Gun control in the national sense began in 1934 with the passage of the National Firearms Act (NFA).

It was supposed to stop gangsters from illegally possessing or transferring weapons. What has transpired since then is that criminals and member of gangs don't bother with legal ownership, but the rest of the law-biding Americans follow the law.

The consequence to legal owners of firearms is that because of the laws and regulations surrounding gun ownership, possessing or leaving an estate containing guns needs special planning.

While traditional estate planning solves a long litany of problems, the problem is that the things that estate trustees and other fiduciaries do in dealing with real estate, stocks and bonds, bank accounts and the like violate federal, state and local law when it comes to possessing, transferring and using guns.

Gun control is very much a political battle. The Supreme Court of the United States has ruled that firearm ownership is a personal constitutional right.

State concealed carry laws exist in virtually all states, except for Illinois. Illinois's ban on firearms was recently overturned as being unconstitutional.

A gun trust is drafted for the special purpose of holding, using and transferring at death or disability in a manner that confirms to firearm law.

Standard revocable trusts will not do.

A gun trust provides requirements and instructions so that the firearms held in the trust can be held, used, transferred or sold without committing a felony offense.

With a properly drafted NFA compliant trust, the trustee, generally the lawful gun owner, can lawfully own the firearm and a beneficiary of the trust under the supervision or authority of the trustee may use the gun. This allows minors to legally go shooting with the trustee or under the trustee's authority.

For estate planners, trusts provide a better solution to avoiding or at the least minimizing the legal challenges surrounding ownership and possession of these special assets.

A firearms trust is a private matter unlike a corporation or a limited liability company, which have public filings, annual fees and tax returns.

Firearm ownership is growing every year. Although personal weapon ownership waned in the 1990s, it has distinctly picked up in recent years. Women, in particular, have been buying guns since the beginning of 2010.

Owning a firearm is not for everybody. But the U.S. Constitution requires that the exercise of the personal right to keep and bear arms is a matter of choice and not a matter of government benevolence.

Firearms are a special asset involving a specific constitutional right and compliance with certain limitations on that right.

Severe civil, and possibly criminal, penalties apply where the laws, regulations and rules passing constitutional muster are not complied with.

An effective mechanism is needed to assure compliance during life and even after death.

For that special purpose, for Americans who own, possess and use firearms, the firearm trust was devised.

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