One of the most difficult challenges in Estate Planning is the handling the transfer of firearms. While tangible assets in general create their own challenges, passing along firearms comes with its own challenges. Guns are one of the most regulated items in our country. Contrary to popular belief, guns have very strict federal and local regulations. Here are some practice tip to consider when handling firearms within an estate plan.
First, it is really important to understand the Executors, Trustees and Beneficiaries. The importance is who is prohibited from owning or dealing in firearms. Unlike most personal property, there are certain individuals who you cannot leave your firearm to. The Gun Control Act is a federal law that prohibits nine categories of people from possessing guns. Those nine categories include those that have been convicted of a crime by imprisonment for more than one year. They also include fugitives from the law, those who use or are addicted to a controlled substance, mentally incompetent, and unlawful citizens
While those may seem extreme, the more obvious ones are Executors, Trustees and Beneficiaries who were dishonorably discharged from the military, citizens of other countries and guilty of a misdemeanor of domestic violence. Even those who have current restraining orders are prohibited from gun transactions. Understanding who is transacting or receiving the weapons is crucial on planning for the transfer of firearms in an estate.
To add to federal laws, many state and local regulations may further restrict which individuals can receive, possess, and transfer firearms. You must take precautions to ensure that your beneficiary is not a prohibited person. In case the beneficiary becomes ineligible, you should list alternative beneficiaries. It is important to remember that these restrictions are not limited to beneficiaries but apply to Executors and Trustees. Without proper planning, these individuals could easily be in violation of the law.
The type of firearm also makes a big difference when transferring an estate. Taking inventory, understanding the firearms may take the assistance of an expert. There are different regulations and restrictions depending on the classification of the weapon. Major firearm categories include National Firearm Act or Title II weapons, Title I weapons and antique guns.
Title I weapons include rifles and handguns like pistols and revolvers. These weapons do not require the same registration and transfer requirements as NFA weapons. However, you should consult with an expert to make sure you are following Federal, State and Local laws.
Antique firearms are defined as firearms that were manufactured before 1899 or are replicas of them. Additionally, the ammunition for the antique firearm must not be available in the ordinary channels of commercial trade. Like, Title I weapons, they are not subject to the strict NFA requirements.
The National Firearms Act (NFA) is a federal law that puts additional restrictions on certain weapons (Title II Weapons). Firearms that are subject to the NFA Title II Weapons are:
1. Shotguns having a barrel or barrels of less than 18 inches.
2. Weapons made from a shotgun, if it has an overall length of less than 26 inches or a barrel less than 18 inches.
3. Rifles having a barrel or barrels of less than 16 inches in length.
4. Weapons made from a rifle if it has an overall length of less than 16 inches.
5. Machine guns.
6. Suppressors/silencers.
7. Destructive devices.
8. Large-caliber weapons.
NFA Title II firearms must have a serial number and be properly registered with the Bureau of Alcohol, Tobacco, Firearms and Explosives. They can only be possessed by the registered owner, and mere possession of these weapons without the proper registration is a federal crime.
If someone wants to purchase a Title II firearm, they must do that from a Class 3 dealer. A class 3 dealer must be used as a transfer agent if the items will be crossing state lines. If the executor, item, and the purchaser are in the same state there is no reason to use a class 3 transfer agent unless your state requires this. This is the same whether the class 3 firearm is going to an heir of the estate, a business, or an individual.
When transferring an estate consider if the beneficiary actually wants the gun and the responsibility that comes with it. If they do not want the weapon, you have a few options. You can require the executor or trustee to sell the firearm to or through a licensed dealer. You may be able to surrender the weapon at the local police department. You can also look at local ranges to help you with the transfer of the weapon.
Further complications arise when the beneficiary lives in a different state than the deceased. Under federal law, you must complete ATF Form 5320.20 when transporting NFA firearms across state lines. In addition to federal law, each state has its own gun laws that must be reviewed. Many states require a criminal history check, permits and notifications when a gun is transferred across state lines.
Language in documents and instructions are important when directing executors and trustees to transfer weapons. One should consult with executors and trustees as to whether they would like the responsibility. A popular Trust for the estate distribution of transferring firearms to the next generation is a gun trust. A gun trust is a trust designed to own, possess, manage, and dispose of firearms. Generally, it is a revocable trust, meaning that the settlor (creator of the trust) can add, remove, or change beneficiaries and trustees.
One of the advantages of a Gun Trust is that weapons can stay private. Usually, when an estate is probated, the executor submits an inventory that becomes public record. A gun trust avoids probate and will not become part of the public record. Gun Trusts also help with the expediting of transfer of a National Firearms Act firearm. Using this type of trust means you do not have to obtain the approval of your local Chief Law Enforcement Officer (CLEO) and the application can be sent directly to Bureau of Alcohol and Tobacco.
Firearms create their own challenges in Estate Planning. Hopefully this article provides some items to consider when dealing with the transfer of firearms to another generation. Consider using a Gun Trust. A properly written Gun Trust helps your clients loved ones deal with items that are delicate under both state law and federal law. Improper administration of regulated firearms can result in a criminal conviction and fines. The last thing someone wants is their loved ones to be left dealing with firearms that were improperly planned for upon the death of the owner.
