By: Eric N. Allen July 2016
In general, a Gun Trust is an estate and business planning mechanism designed specifically to own and hold a Title II weapon. A Title II weapon is a weapon governed by Title II of the Gun Control Act of 1968 which is a revision of the National Firearms Act of 1934,1 and generally includes automatic firearms (machine guns), short-barreled (sawed-off) shotguns and rifles, suppressors / silencers and other such "destructive devices." A Gun Trust can also be used to own and hold a Title I firearm, which is generally any type of firearm.
Title II firearms must be registered with the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) and a transfer can only be accomplished through the use of proper application and payment of the $200 transfer tax. However, the law permits Title II firearms to be owned by trusts, corporations and other legal entities. The use of a Gun Trust as the entity to own the Title I firearm offers many advantages:
Since a Title II firearm may only be possessed by the person in whose name it is registered, placing title into a trust allows the Title II firearm to be possessed by any of the co-trustees of the trust.
The assets within the Gun Trust do not need to pass through a decedent's estate upon the death of a co-trustee since the trust remains in existence.
Co-trustees, beneficiaries and successor trustees may be added or removed from the trust without the need to file additional forms with the BATFE. Note however that after July 13, 2016, ATF Rule 41F requires each "responsible person" to submit a Form 53320.23 questionnaire with each new transfer application.
If you own or plan to acquire a Title II firearm a Gun Trust is an option that is well worth looking into. Contact the attorneys at ALLEN WELLMAN McNEW HARVEY, LLP at (317) 462-3455 to learn more about whether an Indiana gun trust is right for you.
1 26 U.S.C. Chapter 553 § 5801, et seq.
2 Note, however, that ownership of a firearm in a Trust does not otherwise grant rights to a natural person to be in possession of a firearm if that person is otherwise disqualified from the right to possess under State or Federal law.