Estate Planning for the Gun Owner
A special consideration that comes up during the estate planning process is the treatment of firearms. Firearms are considered tangible personal property, which means they are treated like any other physical possession during the probate process. What throws a monkey wrench into this process is the fact that your gun is probably the most regulated piece of property you own.
Federal firearms laws can create all sorts of headaches. Between the time of writing your will and your death, laws may have changed regarding the possession or transfer of certain types of firearms. You beneficiary may not be allowed to own firearms for any number of reasons. What does your estate do if your CLEO (Chief Law Enforcement Officer) refuses to sign off on a Form-4?
One of the best ways to handle the transfer of firearms in your estate plan is to create an NFA Trust, a specific type of living trust allowed under the National Firearms Act. The use of an NFA Trust has several advantages:
- It provides an immediate order of succession for the caretaking of your firearms. This ensures that should you die or become incapacitated, a trusted person has the legal capacity to ensure the safekeeping of your firearms.
- It helps to limit your liability from actions arising out of the unauthorized use of your firearms.
- It shields your heirs from estate, gift, and income tax liability for receiving especially valuable firearms.
- It can be especially useful to collectors during their lifetime because it lowers the possession and transfer requirements for Title II (also known as Class 3) firearms because it does not require CLEO approval for your Form-4 registration.
Like all trusts, an NFA trust can be difficult to set up without an attorney. Measures should be taken to ensure that there is a good order of succession to ensure that the trust can last through multiple generations. Each firearm must also follow specific transfer requirements in order to be owned by the trust. Furthermore, a procedure must be followed to ensure that a complete chain of custody is maintained.