blog

 

 

 

Gun Trust North Dakota

(Gun) Trust Me, I’m A Lawyer

/ Estate Planning

On a regular basis, I field calls and hold appointments to prepare and complete estate plans. This includes the production of wills, durable powers of attorney, health care directives, and trusts for the benefit of my clients. In the past three weeks, I have received multiple inquiries regarding a specific type of trust in North Dakota called a gun trust. As an owner of multiple firearms and as a trust and estates attorney, I was immediately interested and intrigued about this foreign concept known as a gun trust. So, as any good attorney would do, I decided to read up on the issue.

What is a Gun Trust? 

A trust is an agreement that allows a third party to hold and possess assets and property on behalf of a beneficiary or beneficiaries. The third party, known as a trustee, manages the assets and property in the trust. A gun trust, also known as a firearm trust or NFA firearm trust, is a trust created to hold, possess, and manage firearms and NFA weapons.

What are NFA Weapons?

As is commonly referenced, we have a constitutional right to bear arms:

Second Amendment to the United States Constitution: “A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed.” 

Article I, Section 1 of the North Dakota State Constitution: “All individuals are by nature equally free and independent and have certain inalienable rights, among which are those of enjoying and defending life and liberty; acquiring, possessing and protecting property and reputation; pursuing and obtaining safety and happiness; and to keep and bear arms for the defense of their person, family, property, and the state, and for lawful hunting, recreational, and other lawful purposes, which shall not be infringed.”

Despite constitutional protections, our right to bear arms may be regulated by statute. Two federal acts, the National Firearms Act of 1934 (NFA) (codified in 26 U.S. Code Chapter 53) and Title II of the Gun Control Act of 1968 (codified in 18 U.S. Code Chapter 44), regulate certain types of weapons commonly referred to as NFA weapons. NFA weapons are defined in 26 U.S.C. § 5845 and include short-barreled shotguns, short-barreled rifles, machine guns, silencers or suppressors, and destructive devices (like bombs, grenades, mines, etc.). All NFA weapons require a unique serial number and are registered with the Bureau of Alcohol, Tobacco, Firearms, and Explosives, commonly known as the ATF.

Buying and selling an NFA weapon requires plenty of paperwork and registration requirements. Any transfer of an NFA weapon, as defined by the U.S. Code, requires completion of ATF applications. Commonly used applications include Form 4 – Application for Tax Paid Transfer and Registration of Firearm or Form 5 – Application for Tax Exempt Transfer and Registration of Firearm. In addition to completing the ATF paperwork, a transferee (the person obtaining the NFA weapon from another) will need to obtain certification from the chief law enforcement officer in your area of residence (this requirement is subject to change on July 13, 2016), a personal photograph, and fingerprints for the ATF.

Failure to comply with transfer laws will result in a fine up to $10,000 and imprisonment of up to ten years.

What are the Benefits of a Gun Trust?

There are many benefits to establishing a gun trust for your firearms and NFA weapons. These benefits include: 1) Use and possession of NFA Weapons by more than one person; 2) Ease of transfer after death; 3) Avoid probate; and 4) Less paperwork and registration requirements.

Of the benefits listed above, it is important for me to highlight the use and possession of NFA weapons by more than one person. One of the major concerns my clients have is what constitutes a transfer of an NFA weapon.  A “transfer” is defined in 26 U.S.C § 5845(j) as: “The term ‘transfer’ and the various derivatives of such word, shall include selling, assigning, pledging, leasing, loaning, giving away, or otherwise disposing of.” Under this definition, lending your spouse, sibling, or friend possession of your NFA weapon, even if for a minimal amount of time, may be considered a “transfer” under the law. This can lead to significant legal troubles as outlined above.

A gun trust provides a remedy to this situation. If you name more than one person as trustee of your gun trust, each trustee named in your gun trust may possess or use the gun trust firearms at any time. It is essentially the same as having multiple owners of the same asset.

Changes to Come?

The current climate surrounding gun ownership, use, and possession of firearms is consistently changing. The laws and regulations in effect today may change in any given year. As an example, registration requirements for all NFA weapons will be changing on July 13, 2016 per ATF Rule 41F. Certain rights and allowances will be grandfathered in if an application is postmarked prior to July 13, 2016. If you desire to own NFA weapons in trust, now is the time to get it done. As my dad always says, there is no time like the present.

Conclusion 

If you have any questions regarding gun trusts or other estate planning documents, we welcome your call at Severson, Wogsland & Liebl in Fargo. And as always, if you have general questions about estate planning, including probate, health care directives, living wills, wills, trusts, power of attorney, and asset protection, contact the Estate Planning division at Severson, Wogsland & Liebl by calling 701-297-2890.

The information contained in this article and on this website is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.