Today I ran across an entry on Nolo’s website addressing the appropriateness of using their living trust software, commonly referred to as Quicken, or Will Maker, to make a Gun Trust. The same issues would exist for Legal Zoom or other standard trust software. Thousands of people and many gun dealers have prepared gun trusts using Nolo’s software. The problem is the software was never designed for Gun Trusts and their trust may cause legal problems for their family and friends.
Nolo states:
We work with lawyers in Alaska who accept most legal benefit plans offered to many state employees in Alaska. Many of these plans pay for trust work which would include the creation of a NFA Trust, Gun Trust, or Multi Generational Gun Trust. Some of these legal plans have a maximum amount of coverage. Each legal plan is structured differently and the use of the legal plan can significantly reduce the cost of a Gun Trust in Alaska. If you live in Alaska, work for the government, and participate in a legal benefit plan, let us know and we can put you in touch with an Alaska Gun Trust Lawyer® who may be able to provide a free or discounted Alaska Gun Trust to you or your family.
Note both Revocable and Irrevocable Gun Trusts must be registered with the state of Alaska or the ATF will reject a Form 4 or Form 1.
We often get questions from people about using a regular trust or existing trust that they already have to purchase a suppressor. First a trust or Gun Trust is not required to purchase a suppressor. A suppressor is a Title II firearm, that is sold by a Class III FFL. It can be purchased by an individual, trust, or business entity. Currently, an individuals must obtain a CLEO signature as well as provide fingerprints with the application to purchase a suppressor. Any purchase from an individual, trust, Gun Trust, or business entity must pay a $200 tax stamp and complete an ATF Form 4.
That being said, a Trust or Gun Trust has many other benefits besides the CLEO and fingerprint submission.
Some Gun Trusts can even be designed to include:
If you are interested in a real NFA Trust or Gun Trust and looking to implement it quickly and without the additional cost of a lawyer being involved we are offering a special on the Online version of the Gun Trust for only $199. This is anywhere from 1/2 to 1/3 of the normal price of the Gun Trust with legal support. The Online Gun Trust comes with a great manual which describes and give examples and hyperlinks to sample forms to purchase NFA firearms. It can deal with people who live in multiple states and allows you to add 3 additional authorized users.
Many people are rushing to put their regular firearms in a trust in an attempt to protect their ability to allow children and grandchildren to use them when they are old enough.
If you have a lot of firearms, you are looking for asset protection, or multi generational insulation from legislative change, you should consider the Professional Gun Trust. There is a comparison of this trust in one of the articles below on this page.
Today we received another copy of a Gun Store Generic NFA Trust that was provided to a customer of the shop. Not only was it a generic trust and did nothing to advise or protect the client from issues regarding the transfer, ownership, possession or use of TItle II firearms (sold by Class 3 dealers) but the trust itself was invalid as it did not comply with the requirements to create a valid trust in the State. While it may have been a valid trust in another state, each state has its own requirements for creating a valid trust. These requirements change and a trust that may have been valid a few years ago may not be valid under the current laws of the state. It is important to make sure your trust complies with the state’s requirements for creation of a valid trust. What is disturbing is that ATF approved transfers to this invalid trust.
Remember just because ATF approves a transfer, the agency is not stating that your trust is valid nor that you are legally able to be in possession of the firearms. If you have a free trust or a gun shop trust it is important to have it reviewed for legality as well as compliance with the ATF to make sure your document is valid and that your document does not instruct you or others to break the law in regards to regular firearms or those restricted by the NFA.
This week I have received two trusts from potential clients who sent them in for review that were invalid. Even if ATF approved a Form 1 or Form 4 transfer to these trusts, anyone in possession of the TItle II firearms would be illegally in possession of them. Once person already had 3 items in their possession and 2 more on the way.
Both trusts claimed to be gun trusts but were obviously not intended for firearms much less those subject to the NFA and contained many of the traditional language found in a trust designed for managing financial assets.
While in some ways the language seemed to be slightly better than a Quicken trust (except for the fatal flaws that made them defective) they only briefly mentioned the NFA or guns in the trust and gave no guidance based on state or federal restrictions of firearms based on the geography of the transfer or the legal status of the people involved with the trust or whether the beneficiary was legally able to be in possession of the firearms based on the unknown circumstances of the future. While all of this may sound complicated, a real Gun Trust like one provided by a Gun Trust Lawyer® will deal with all of these issues and more.
I recent read a very well written article by a Washington Lawyer regarding liability for the gun store and potential ethical violations for an attorney who works with a gun store in regards to providing Trust Forms. Many state bars have gone after Trust Mills in the past for very similar issues and there is case law all over the country concerning these issues. If you know a gun store that is providing Trusts to their clients, you may want to send them a copy of this article and suggest that they check out the liability and legality of their actions.
As a potential purchaser of a NFA firearm with a Trust, you might read the article from the viewpoint of the potential liability to the gun store. This will give you an independent perspective on what could go wrong if you use a generic trust to purchase NFA firearms.
Download the article UPL by Gun Shops.pdf
We have a new version of our NFA Brochure available to download and review. if you are interested in finding out more about NFA Trusts download the new NFA_Gun_Trust_brochure.pdf.
We would appreciate any feedback on the document.
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Some dealers are currently providing trusts to their customers to avoid the Chief Law Enforcement Officer (the “CLEO”) sign-off that is required for individual purchasers of Title II Firearms. When a non-lawyer dealer fills out or creates a trust for an individual they are violating their state’s unauthorized practice of law (“UPL”) statutes. Many dealers and manufactures are providing generic trusts that do not address the unique issues of the NFA and often do not comply with the state requirements for proper execution. In the past, the ATF has accepted many of these invalid trusts and approved the transfer of these firearms. Unfortunately for such individuals, if the trust is invalid, the possession that has been approved did not take place, and the individual or individuals who are in possession or using the items are in violation of the NFA. These dealers are taking a big risk in providing improper trusts to their customers. They are not only violating the state UPL statutes, but can also be liable for violating the NFA, in addition to civil liability for the bad advice which results in the consumers’ property loss, civil penalties, and/or criminal prosecution.
Be careful when copying a form or getting a trust from someone who is not a licensed attorney. Many individuals ask why we work exclusively with local licensed attorneys in each state. We do this to maintain the quality of our documents and to make sure that a licensed attorney in your state reviews the documents and makes changes based upon your local state laws.
If you want to create your own Gun Trust without a lawyer, there is a real online Gun Trust that can be created in less than 10 minutes.
Many individuals are using Quicken, LegalZoom, or traditional revocable trusts to purchase firearms regulated by the NFA. A traditional trust is not appropriate for the purchase, transfer, or use of NFA firearms because of the unique characteristics of these firearms. A typical revocable trust is created to protect an individual from others who might abuse their powers and detrimentally affect their interest in the property that is owned by the trust. These traditional trusts are problematic for holding assets regulated under the NFA because they do not consider the penalties and legal obligations of those involved with the trust in relation to state and federal laws. As lawyers we have a duty to become knowledgeable and competent in the areas in which we practice or associate with someone who can provide the knowledge necessary to provide the legal service we are offering. A lawyer who provides a traditional trust to a client with the intent of purchasing, holding, transferring, or using NFA firearms opens themselves up to a malpractice claim because the traditional trust instructs individuals to take actions which violate the NFA. While this may not be apparent during the grantor’s life, the violations often come to light upon the death or incapacity of the grantor.
During the life of the grantor, while the problems may be minimized, there are still potential problems with a traditional revocable trust when used to hold NFA firearms. Most gun dealers and lawyers do not understand the importance of purchasing the items correctly or protecting others from constructive possession. While the ATF does not appear to be prosecuting individuals for the improper purchase or storage or sharing of these items at this time, there is no intent required in the NFA and a policy change could subject many individuals, their families, and friends to the penalties involved in a NFA or state violation.
UPDATE If you want to create your own Gun Trust without a lawyer, there is a real online Gun Trust that can be created in less than 10 minutes.
NFA Gun Trust Lawyer Blog