I have a gun trust. Should I get a Will?

That is the question of many clients. You have taken the time and gone through the trouble to set up a gun trust. Said trust will take care of the firearms owned in it, and will pass those down according to your instructions. With that taken care of, should you consider adding a Last Will and Testament to your estate plan?

In a word: Yes.

A Will is a necessity if you have any assets to pass on or unfinished business to handle. And most of us fall into both of those categories.

A Will allows you to name a guardian for any minor children. You can divide assets and delineate who takes ownership upon your death. You can make arrangements to pay any debts you have outstanding. And finally, if your situation warrants it, you can establish a more general trust to hold assets for beneficiaries who need a little extra help managing the property.

A Will allows for a clean and ordered closing of business and transferring of property after your death. This is a stressful time for your family, and guidance left behind by you will make the work easier for your family. This is especially true where you leave behind multiple heirs.

But is that all I Need?

Unfortunately no. You should consider setting up a Durable Power of Attorney and a Health Care Power of Attorney. These documents name an agent who can handle your business when you are unable. This is extremely important if you become ill, are involved in an accident, or become unable to handle your affairs due to age.

These are documents that can be implemented at any time, as long as you are competent. All too often, people wait until they are no longer competent before realizing the need for such documents. Once that happens, an expensive and cumbersome Court Order is necessary to accomplish the job. Here, as in many cases, an ounce of prevention is worth a pound of cure.

How can you help?

Repeat clients are my favorite. I already have familiarity with your family, and your return business is a vote of confidence in the services provided. Thus, I am always happy to help clients handle other matters.

To handle the issues discussed above, I offer a Wills Package which includes the Will, Durable Power of Attorney, and Health Care Power of Attorney. I enjoy sitting down with you and your spouse and discussing your plans for the future and how we can make those happen. I’ll help you consider ideas and angles previously unexplored, and once everything is finalized, I can draw up the papers for you.

It’s never too early to consider your Will and other such documents. If this has crossed your mind, please reach out to me today, and I will be happy to help you take this off your to-do list.

The Flexible Gun Trust

Clients commonly ask, “what are the chief benefits of a Gun Trust today.” With recent changes in NFA law requiring all purchasers to submit fingerprints and other documentation for a background check, the benefits are not as immediate as they used to be. However the longterm and most important benefits have remained the same. In a word: Flexibility.

Multiple Possession

A Gun Trust allows you, the creator, to list multiple people as Trustees. Any one of these persons can possess guns owned by the Trust and transact business on behalf of the Trust. This allows your spouse to have access to the firearm without committing an unintentional felony. And any good husband knows that keeping your wife out of jail is a fundamental necessity to a happy marriage!

Or you can allow a friend or youth (18 or over) to borrow your NFA firearms and use them without you present. The Trust thereby allows you to share your NFA firearms in a manner very similar to how you might share your other firearms. Not lightly, but with the right forethought to those you know are responsible.

In short, a Gun Trust gives you the flexibility to allow others to use your NFA firearms outside of your presence.

Adaptability

A Gun Trust is completely controlled by you, the creator. Life changes, and so can your Gun Trust. You can add or remove Trustees at any time. This is helpful to reflect the changes in life that come with time, such as marriage, divorce, the maturing of children, etc.

What we establish today is just the beginning, and you can change at your leisure who will be able to possess and use the firearms. This gives you the flexibility to adapt your Gun Trust to your current needs even as those needs change overtime.

Future Planning

A Gun Trust also clearly lays out what happens to the firearms in the future. Should anything happen to the Trustees, your Successor Trustees can step in and take care of the firearms and the Trust. But since these Successor Trustees have no current role, they are not subject to any ATF background check. Rather, they are waiting in the wings if needed, and until then are not involved with the operation of the Trust.

The Beneficiaries you name will receive the firearms owned by the Trust upon your passing. Like a will, this allows you to direct who inherits the firearms, but unlike a will, probate is not required. We can create multiple tiers of Beneficiaries to ensure that the firearms are passed down even if one of your Beneficiaries is deceased or not interested in the firearms.

Thus a Gun Trust gives you control over how the firearms are passed down, even if your first choice of a Beneficiary is not available.

Durability

A Gun Trust outlives you. Even after your death the firearms remain in your family and no transfer paperwork needs to be filed with the ATF until the Trust is terminated. With multiple beneficiaries, that may be multiple generations in the future. Therefore the gun remains owned by the Trust, and the Trustees and Beneficiaries can continue to enjoy ownership through the Trust.

Thus if your first Beneficiary takes no action with the firearms and instead ignores them, your second Beneficiary won’t have to explain that inaction to the ATF at a later date. The Trust provides flexibility to your Beneficiaries regarding when and how they claim the inheritance in the Trust.

Conclusion

These are some of the most important ways in which a Gun Trust can be of benefit when purchasing a NFA firearm. (Or when protecting a large collection of all types of guns.) Robert commonly helps clients in South Carolina create a Gun Trust to protect their collection, allow multiple possessors, and to pass down the collection. To get started on a Trust, or to learn how a Trust can specifically help you, contact Robert.

Post ATF-41F: Do I still Want a Gun Trust?

Many clients and potential clients are asking if they should still want a trust after the ATF 41F rule changes. While the 41F rule changes did increase the difficulty for trusts to purchase firearms, most buyers will still get several important benefits from trusts that make them worthwhile. It is these benefits that lead most buyers to continue using a trust to purchase NFA Firearms.

In brief, here are some of the most important benefits that remain after the 41F rule change. Continue reading

Schedule of Assets

Schedule A, Schedule of Assets, Assignment Sheet. This document goes by many names, but what is it? Colloquially, it is most commonly referred to as “Schedule A” and basically lists what is owned by a trust.

The Schedule of Assets, often abbreviated as “Schedule A”, is a list of all property owned by a trust. This would include any money, bank accounts, firearms, or other property you may place into the trust. Typically there is no place for a signature on a Schedule A. A signature is not required, because the Schedule A does not place property into the trust; it merely recognizes that the property is already there. (And placed in by another means; many times the trust itself.)

The Assignment Sheet is a variant of Schedule A that actually places the property into the trust; i.e. assigns the property to the trust. When used consistently to place property into the trust, the Assignment Sheet also functions as a list of the property in the trust. Because assigning an item to the trust is an action, there are places for signatures on Assignment Sheets.

When Should I List My Firearm on the Schedule A?

When you list your firearm is important, but not critical. Generally, I advise clients to assign the firearm to the trust (i.e. list on a Schedule A or complete the Assignment Sheet) after you can physically take the firearm home. For standard firearms, this is the day you buy them. For NFA Firearms, this is only after the Form 4 is approved.

Technically speaking, the Supreme Court has recognized that Federal law controls possession, not ownership, of firearms. Henderson v. United States, 575 US _____ (2015). Therefore, a trust could “own” the firearm before it takes possession. Thus, it would be proper to list the firearm, NFA or otherwise, on Schedule A (or assign it on the Assignment Sheet) the moment in which the Trust pays for the gun. The ATF has occasionally (albeit inconsistently) objected to this practice, and this is why I recommend waiting until you can take possession.

Do I Submit Schedule A to the ATF?

The ATF requires a full and complete copy of your Trust whenever you submit a Form 1, Form 4, or Form 5. The ATF considers any schedules, assignment sheets, or lists referred to in the Trust as part of the Trust. If you do not include these, the ATF will request them.

This is why I hesitate in advising people to specifically list all of their firearms on a Schedule A. As a way around this, my Firearms Collector Trust, which is designed to hold and pass down your entire firearm collection, uses a blanket assignment statement within the trust that captures all of your firearms and accessories without listing. With no list as part of the trust, the document is not required for submittal to the ATF.

Conclusion

Call it whatever you like, the Schedule A is a list of your firearms in the Trust. It is generally geared towards NFA Firearms and makes it easy for your heirs to know everything that is in the Trust. This is important during probate when they will want to be certain they have located all controlled firearms. Therefore keeping the list up to date and accurate will help avoid any mistakes in the future.

Firearm Collector Trust: A Legal Gun Safe

Gun trusts provide their owners with all sorts of benefits. The most well known relate to the purchase and possession of NFA firearms, such as eliminating the need for a CLEO sign off or allowing multiple people to possess firearms on behalf of the trust. However, there are many more benefits a gun owner can obtain by putting his general firearms collection into a trust. Like a gun safe, a Firearm Collector Trust protects your investments and keep them out of the wrong hands.

Benefits of a Firearm Collector Trust

Specific benefits of a Firearm Collector Trust include:

  • Privacy
  • Control over who receives firearms
  • Control over how and when firearms are passed down
  • Splitting of possession and ownership to protect firearms from confiscation in event a possessor loses his firearm rights
  • Elimination of unnecessary transfers (and thereby the need to comply with restrictions on transfers)
  • Safeguards designed to work around potential future legislation

Some of these benefits are applicable to everyone, and others depend on you and your family’s situation. Like a gun safe, you purchase a Firearm Collector Trust to provide protection for your guns based off of your risks. If you want to learn more about the situations where an all inclusive trust can help you, please enter your name and email below to receive a white paper on Firearm Collector Trusts or contact Robert.

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