Estate Planning for Gun Owners
Unlike other personal property like furniture or jewelry, guns carry the potential to commit felony crimes merely by inadvertent actions. You can simply give a watch as a gift to your cousin that lives in another state, but you can't simply give a gun as a gift to that cousin. There are countless ways to accidentally commit a crime with a firearm, including during the inheritance process. If a beneficiary or heir is to receive a firearm as an inheritance (or part of an inheritance) and they live in another state, it is imperative that the laws of the other state are considered, in addition to Arizona and federal law. Obviously, the heir or beneficiary must be able to legally own a firearm, but the trustee or personal representative must ensure that all other laws are complied with as well, including requirements to perform background checks prior to delivering the firearm. As such, planning for the disposition of firearms and firearms-related accessories such as magazines, requires special planning by a qualified attorney to ensure the client's wishes are met and the law is complied with.
A Gun Trust is a crucial part of an estate plan
Given the volume and complexity of federal and state gun laws, it is easy to see why a specialized gun trust is a crucial part of any estate plan that involves firearms: the standard revocable trust simply isn't equipped to deal with the myriad of state and federal gun laws. The problems and risks don't simply occur after the creator of the trust dies and distributions are made; the problems start at the very creation of the standard revocable trust. A standard revocable trust almost assuredly will not even contain the word "gun" or "firearm" or "ATF," much less have provisions to ensure trustees and beneficiaries do not accidentally break the law. Additionally, most, if not all, standard revocable trusts have provisions for a general assignment of all of the grantor's (the trust creator, also known as settor or trustor or trustmaker) personal property to the trust. This is a natural and normal way of funding the trust (funding is the process of putting assets into the trust) and is rarely problematic, except when it comes to guns.
Assigning guns to the trust may be illegal, indeed, it may be an illegal transfer under both federal and/or state law with possible prison sentences of up to 10 years. Some states have laws that require firearms to be registered in the state and that all transfers require prior approval by the appropriate state agency - the simple assignment to the trust may violate those laws. Likewise, it is absolutely clear under federal law that an assignment of an NFA firearm requires prior ATF approval and payment of the $200 transfer tax before you assign the firearm. Sadly, there are tens of thousands of poorly informed people who have made such an assignment without knowing they broke the law. Even worse, there are tens of thousands of estate planning attorneys that accidentally helped their client break the law that don't know either. These problems at trust creation are just the tip of the iceberg - there are countless possible problems and crimes that may be committed at other times through out the life of a trust too - such as during distributions. The solution to these problems and accidental felonies is to incorporate a quality gun trust prepared by a knowledgeable gun-law attorney into the estate plan. The gun trust and estate planning trust must be correlated together to ensure proper legal compliance.
Estate Planning for gun owners
Reasons to establish a comprehensive estate plan:
These reasons apply to gun owners, but gun owners also have unique concerns that make setting up a comprehensive estate plan even more important:
If you would like to set up an estate plan, or would simply like more information please feel free to call or email us today. If you would like to spend more time reading about estate planning generally, please visit us at our Arizona estate planning website.
Guns require special planning
It's no surprise to gun owners that guns are highly regulated. Guns and gun-related activities are regulated by statutes, regulations, and rules, including some of the following:
The list goes on and on...
Guns are unlike any other type of personal property because of the volume of federal and state laws that regulate firearms. The chart below illustrates how federal gun laws, in number of words, have grown over time since the late 1700s.
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