Much has been in the news over the last couple of years regarding firearms. In the wake of multiple mass shootings, the government has been discussing ways to limit ownership, creating new and stricter gun control laws, and even taking away all of your firearms period. It is important to note that these discussions are just that. So far nothing new has changed regarding firearms from a federal standpoint. This article will address firearms and how you should incorporate them into your estate plan. Different rules apply depending upon the type of firearm. For purposes of this article, I will distinguish “regular” weapons that can be passed to beneficiaries under a will or trust from those weapons governed under the National Firearms Act of 1934 (“NFA”).
Recent surveys show that approximately 43% of Americans keep a gun in their home. Moreover, Texans own more than 50 million firearms which amounts to roughly 20% of the guns in the United States. Of these 50 million plus firearms, more than 250,000 machine guns and other NFA weapons are registered. This is a staggering number of firearms and it is only growing.
Planning for “Regular” Weapons
Ordinary, every-day firearms such as revolvers, pistols, rifles, and shotguns are owned by a many number of Americans. A good deal of those Americans own multiple firearms, whether they are collectors, hunters, sportsmen, etc. These weapons can be purchased at gun shows, gun stores, and even online. The purchaser must pass a background check before actual ownership and possession of the weapon passes to the buyer.
Problems can (and often do) arise when a gun owner passes away and wants to leave his or her firearms to a beneficiary. For these “regular” weapons, state law governs who can inherit a firearm. State laws vary across the country, but in Texas there are several things that a gun owner needs to know when leaving a firearm to a beneficiary. For instance:
- The gun owner must not know that the beneficiary intends to use the weapon in an unlawful manner;
- The beneficiary cannot be under 18 (unless written parental permission is given);
- The beneficiary must never have been convicted of a felony or certain misdemeanors.
Again, laws vary state by state and you should find out the requirements of the state where the intended beneficiary resides. This may include conducting a background check of any intended beneficiary to be certain that the beneficiary can legally possess the weapon. You should be sure to name alternate beneficiaries under your will or trust just in case the intended beneficiary is ineligible to own/possess a firearm. I typically suggest that my clients name at least two (2) additional alternate beneficiaries.
Your will or trust allows you to name whomever you want to inherit these “regular” firearms. Remember that absent a will/trust, the laws of the State of Texas will determine who gets your firearms. Moreover, dying without a will/trust makes all beneficiaries tenants-in-common, which is a fancy of way saying that all legal heirs have an equal ownership in the weapon making it quite difficult to transfer ownership. If you want to avoid this scenario, you must have a written estate plan to ensure that your wishes are carried out.
Title II Weapons – The “Irregular” Weapons
The National Firearms Act of 1934 governs the purchase, sale, transfer, ownership, use, and possession of:
- Machine guns – defined as a weapon that can automatically fire more than one shot without manual reloading by a single pull of the trigger;
- Parts that convert weapons to machine guns (such as a sear);
- Short-barreled shotguns and rifles – defined as having a barrel less than 18” in length or a total length of less than 26”;
- Any other weapon (i.e., concealed and gadget weapons like a cane, glove, or pen gun);
- Destructive devices (like grenades, land mines, poison gas canisters).
Purchasing and transferring NFA weapons is a tedious task. In order to purchase an NFA weapon, the buyer must:
- complete ATF Form 4;
- pay a $200 tax;
- submit a duplicate set of forms with original signatures;
- provide photos of the applicant;
- get two FBI Forms FD-258 (fingerprints);
- obtain a signed law enforcement certificate
Most of these things are not too difficult. However, I have highlighted the requirement that causes people the most trouble. The Chief Law Enforcement Officer (“CLEO”) of the purchaser’s county of residence must sign off on a certificate approving the transfer of the NFA weapon. This sounds somewhat onerous but doable. In reality it is virtually impossible to obtain the needed signatures. CLEOs in multiple counties have taken the position that he or she will not sign a certificate for fear that the purchaser is going to do something bad with the weapon.
Tremendous penalties exist for the failure to properly transfer an NFA weapon. If not properly done, the purchaser faces up to ten (10) years in prison, up to $250,000 in fines, forfeiture of the weapon, and forfeiture of any vehicle used to convey or conceal the weapon.
As a side note, the issue of “possession” of NFA weapons poses significant risks. Under the NFA, only the owner may possess one of these weapons. This means that innocent possession is violation of federal law as well as constructive possession. By way of example, suppose you are at a loved one’s home, a friend’s house, or an acquaintance. He or she has a vintage World War II era machine gun that was taken off of the battle field and mounted above the fireplace. You notice it and think how cool that is. You ask if you can pick the weapon up and hold it and maybe even take a selfie. This is a federal law violation even if the weapon is unloaded and for display only.
What Do You Do When Owner Dies?
When the owner of an NFA weapon passes away, the first step is to determine whether the gun was properly registered with the Bureau of Alcohol, Tobacco, and Firearms (“ATF”). To do this you must locate the registration document among the deceased’s valuable papers. This document is often stored with other valuable documents in a safe deposit box, a safe, or other designated area. If the registration document cannot be located, then you can contact the ATF to see if it was properly registered.
If you discover that the weapon was not registered, then you are required under the NFA to turn the weapon over to law enforcement immediately. This means that a deceased’s estate cannot retroactively register an NFA weapon. Furthermore, you must turn over the weapon as soon as possible since family members could be deemed in possession and in violation of federal law.
If you discover that the weapon was properly registered, then the personal representative of the deceased’s estate is responsible for transferring the weapon to the beneficiary, assuming the beneficiary is capable of owning the weapon. Law provides that the personal representative has a “reasonable” time to transfer the weapon to the beneficiary, though no actual definition of “reasonable” can be found in the NFA. One good thing is that the $200 transfer tax is not levied on transfers that occur due to death of a registered NFA weapon. However, the transfer process is very burdensome for the personal representative since he or she must determine whether the intended beneficiary is capable of owning the firearm and whether or not the beneficiary is legally allowed to own the firearm.
Under the NFA, a beneficiary cannot be:
- Under indictment or convicted of crime punishable by imprisonment for over one year;
- Fugitive from justice;
- Unlawful user of or addicted to any controlled substance;
- Adjudicated as a mental defective or committed to mental institution;
- Illegal alien;
- Dishonorably discharged from the military;
- Be a person who renounced U.S. citizenship;
- Subject to a restraining order; or
- Convicted of domestic violence.
You are probably thinking that there must be a better, easier way to own and transfer these weapons. Lucky for you, the NFA does expressly allow a better option in the NFA Gun Trust.
NFA Gun Trusts
The NFA expressly authorizes the ownership of NFA weapons by a trust. In order to transfer NFA weapons that one currently owns, the owner may apply directly to the ATF for transfer of the weapon to a gun trust. This eliminates the formalities of needing photographs or fingerprints (since a trust does not have fingerprints or a photograph). Most importantly, it eliminates the need for CLEO approval and signature of the transfer!
A gun trust may be used for both “regular” weapons and NFA weapons. Several key provisions of a good gun trust include:
- Trustee has possessory and use rights;
- Can be used for previously owned and newly acquired weapons;
- Trustee determines if ultimate beneficiary is a proper owner;
- Reduces the risk of constructive possession since the Settlor gives the Trustee the ability to add or remove authorized users (Trustees);
- Protection of the weapon for multiple-generations;
- Possible protection from future transfer restrictions.
NFA Gun Trusts are good vehicles for you to own both “regular” weapons and Title II weapons. The need for CLEO approval severely cripples the ability of most ordinary individuals to purchase NFA weapons in their individual name. The risks of illegally purchasing, possessing, and using NFA weapons are too severe to not at least explore the possibility of creating an NFA Gun Trust.
Call Green Law, PLLC today at (806) 548.2953 or email us at email@example.com for further information about NFA Gun Trusts. Together we will explore all of your options and create a solution that is both practical and workable under your particular circumstances.