NFA Gun Trust Lawyer Blog
Modify my gun trust?
Given the pending 41P/F implementation in the next year, we have been getting a lot of questions.
As with all legal answers, the answer is “IT DEPENDS“. Let me clarify how 41P/F will impact an existing Gun Trust.
Should I modify my gun trust? The first thing you must determine is who is a responsible person under your trust. In general all trustees and co-trustees will be considered responsible persons under the new definition for Gun and NFA trusts. The draft of 41F which is expected to be published soon states that the DOJ has clarified that the term “responsible person” for a trust or legal entity includes those persons who have the power and authority to direct the management and policies of the trust or legal entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or entity. The primary issues here discussed in this article regard the right to possess or have an NFA firearm in their possession, even if supervised.
If your trust was designed by a Gun Trust Lawyer® then the trustees and co-trustees are generally the only responsible parties in your trust. If you trust is not from us, then it may include the people near your trustees and / or beneficiaries named in the trust. In an effort to be more flexible, some trusts have been written to give non-traditional powers to beneficiaries and even other classes of people like bystanders. This can create problems for several reasons including when 41F is implemented because you many not be able to get a fingerprint card for a 2 year old, or beneficiaries who ma be overseas, or it may be expensive and time consuming to obtain these for all the people who you might decide to let use your NFA firearms. If you have one of these trusts, you may want to amend your gun trust prior to your next purchase (after 41F is implemented) to avoid the inability to make purchases because you have a trust which creates these powers. I have had many discussions with lawyers around the country about why this was a bad idea in the past, and now it may up hurting the individuals and families who unknowingly acquired these. In addition, in my opinion, it is a poor idea to include these types of powers because there is generally no way to bind a beneficiary to the terms of the gun trust. In addition, a beneficiary may not be mature, responsible, or old enough to be bound even if they are of legal age.
We have also been contacted by many individuals who want to remove some or all of their co-trustees to avoid having to submit numerous CLEO notifications, fingerprints, and pictures that will have to be submitted with their applications after 41F is implemented (assuming it is implemented and 41F is not changed to eliminate these requirements) In my opinion, I feel 41F is likely to be published this month and it is not likely that the requirements will be removed when published. Note at this time there is no requirement to update ATF should you want to add people after the application has been approved nor does there appear to be a requirement in the draft of 41F that has been circulating.
I want to Modify my Gun Trust. For those who would like to get a head start and remove unnecessary co-trustees, we have an amendment that is available to add or remove trustees from a trust (assuming your trust permits this – I have not seen a gun trust that does not, but you should review your trust to make sure the power to add and remove trustees does exists.) You can use this link to purchase an amendment form to add or remove trustees (This amendment can be used multiple times so you can remove people and add people later).
We are also asked about successor trustees and do I need to Modify my gun trust, in our gun trusts, successor trustees will not be considered responsible persons under the current draft of 41F, but some trusts make them co-trustees also or give them additional powers which may make them considered responsible persons under the proposed 41F. If the successor trustees in your trust are also co-trustees or have the powers that make them a responsible person under the definition of a responsible person in the draft of 41F they will have comply with the requirements of 41F when and if it is implemented. If you have one of our Gun Trusts, this is not an issue and you do not need to modify your gun trust.
We are planning on creating an amendment to fix the beneficiary and special purpose or random trustee powers that some gun trusts have created, but it is not available yet. If you are interested in this please email us at info@guntrustlawyer.com.
Can I modify my gun trust to remove these powers in another way? Another solution is to amend and restate your entire trust with a gun trust that is designed with 41F in mind to avoid these issues. An amendment and restatement can remove the need to “modify my gun trust” in other ways.
We would like to remind everyone that you should have your trust reviewed to see if it needs to be changed prior to the implementation of 41F. This does not need to be done today, as 41F has not been published and 41F states that the changes will not be implemented for 6 months after publication. That being said, many people are wanting to make changes today, and it is possible to take care of those prior to the implementation of 41F. It may be a good opportunity to make sure your trust is designed for all your firearms and not just NFA firearms.
In addition, the draft of 41F that is circulating seems to indicate that there will be a requirement to send in all schedules and exhibits mentioned in the trust documents. This would include Schedule A and B, Exhibit 1, 2, A. In the past, ATF was looking for evidence of funding, but now they appear to be wanting to take a closer look at the entire trust documents.
In my opinion, a properly drafted gun trust is the responsible way to own guns and help protect your family from the inadvertent bequests that could be a felony. None of us know who our beneficiaries will be when we die, where our beneficiaries will live when we die, what the legal status of our beneficiaries will be when we die, nor if the beneficiaries will be mature and responsible enough that you would want to give them a gun on the day you die. For this reason it is often the same decision to leave someone a Glock, shotgun, or a suppressor. For those who have larger firearms collections, you may want to consider a Professional Gun Trust which has been designed for asset protection, multi-generational ownership, has the ability to be modified in the future and avoids future transfers (what the new laws around the country are attempting to prohibit).
NOTE: Please remember that 41F is only a draft at this time. 41F is subject to change prior to publication and the draft of 41F that is circulating states that it will not be effective for 180 days following publication.
UPDATE – 41F has been published and it will be effective July 13, 2016 – NO changes to the process will be required for applications submitted prior to that date