Let's walk through some background information on firearms, estate planning, and gun trusts. Texans are well known as defenders of firearm rights, and it should come as no surprise that many of us are also gun owners. Assets like firearms should be considered for estate planning purposes. We need to consider whether or not firearms should be treated differently than any other assets of yours. If so, what can you do in your estate planning process to account for weapons and ensure that these assets are secured and protected for whomever you choose to receive them after your passing?
Interestingly enough, trust laws in Texas and federal levels do not mention anything about firearms as assets. Therefore we need to look elsewhere to figure out how to map out firearms in asset protection and distribution. There are plenty of appellate court cases that relate to firearms. We can look at these laws to determine what impact guns may have on your estate planning and the possible creation of a trust.
On the federal level, the National Firearms Act taxes you $200 when firearms are transferred out of your name and into the name of another person. However, this law is relatively old and is mainly unenforceable as a matter of practice. Finally, the Gun Control Act of 1968 regulates the interstate transportation of firearms. Firearms extend beyond just "guns" in this statute. Rockets, grenades, and other types of weapons all count in being regulated by this law. Just in case you have some land mines lying around your house.
What is included in a typical gun trust?
If you are interested in creating a gun trust as part of your estate planning, you need to pay attention to it. When we talk about creating a gun trust, the process behind doing so is no different than creating any other kind of revocable trust. The only real difference is that you must reference terminology associated with firearms and any applicable state or federal laws that cover firearm usage and transfers in a gun trust.
You would create either a revocable or irrevocable trust wherein you name yourself as the trustee. The trust should state specifically that you intend to comply with all federal and state laws that deal with firearms. Remember that the purpose of the trust is to adhere to all state and federal laws on guns. This is done to protect you, and your family members who stand to inherit your property were you to pass away.
What to do if you want to name a beneficiary under your gun trust?
You can create your trust wherein you are named as the trustee, and the trust acts as a benefit for you. However, you may also choose to name specific beneficiaries under the faith, as well. An essential step in this process is to ensure that the person you intend to call as a beneficiary can legally own a firearm in Texas. Is your beneficiary over the age of 18, not under the care of a mental health professional, able to pass a background check and free of any felony convictions? Please verify all of this information before naming them as a beneficiary during your life.
Under the terms of a gun trust, you are given the authority to determine whether or not your intended beneficiary will be able to receive the firearm once you pass away. Suppose it is determined that your intended beneficiary is not legally able to own a gun. In that case, the trust should name a secondary or alternate beneficiary so that the gun is not left in limbo at the time of your passing. If you name only one beneficiary, you should list a charity, non-profit or other entity as a recipient of the firearm once you pass away.
Who will act as a trustee in your trust?
Since many gun trusts are revocable, meaning that you can dissolve the trust during your life, it is typical for the trust's creator (you) to be named as trustee. However, because you will pass away at some point, you will need to call a successor trustee within the trust language for the trust to have any benefit down the line. Again, it would help to make sure that the successor trustee can also legally own a firearm.
You are not in a position to determine whether or not your successor trustee will always be able to own a firearm legally. For example, they may currently be able to own a gun, but the future may hold some outcome that legally prevents them from doing so. You have no way of making that determination at this juncture, so what can you do to ensure that there is no gap in trusteeship?
It is recommended that your gun trust contain automatic removal language that considers the possibility that your successor trustee is determined to be unable to own a firearm in the future legally. If, at the time, they would become trustee, is not honestly able to own a gun, that person would be determined to have predeceased you as the grantor. For this reason, you must name at least two additional persons who could succeed the primary successor trustee.
What type of language should be utilized when referencing your firearms?
In general, broad and non-specific language should be utilized within the trust to handle matters related to your firearms. You will need to fill out paperwork that allows for the transfer of your firearm. If a successor trustee steps in and facilitates the transfer of the gun, they should be reimbursed for any costs associated with the transport of the weapon. Bear in mind that transferring a firearm means that your trustee must follow the laws on the state and federal levels.
A trustee in a gun trust has three powers that are of primary importance; first, they are empowered to sell the firearm. Next, the power to terminate the trust is inherent in being the trustee of a gun trust. Finally, the trustee can transfer the location of faith depending on the circumstances at play. As the person who created the trust, you can provide yourself the power to change the belief as you see fit during your lifetime.
It is good to have a list of the firearms you include in your gun trust. This list should be included in the incorporation documents as a reference. The list should be attached to the trust documents and filed with the district or county clerk in the county where you reside.
What do you need to have handy when creating a gun trust?
It would help if you were willing to create a trust for one to be completed. Another person cannot build trust for you unless you are under adult guardianship. Next, you will need to name an initial beneficiary under the gun trust. A person you wish to receive your firearm needs to be named in the trust documents. Any beneficiaries who can step in and receive the gun if the initial beneficiary cannot do so should also be accounted for. Next, you need to name multiple trustees within the gun trust. It is also wise to include language that considers what will happen if your beneficiary or trustee (or both) becomes incapacitated.
What are some other considerations you need to make regarding a gun trust?
With gun control legislation always a hot-button topic in our country, it is reasonable to think about what would happen if your firearm covered by the gun trust is determined to be illegal and thus banned. Silencers, bump stocks and extended magazines are examples of gun modifications that could be made illegal in the future. What would you do if your firearm becomes unlawful and cannot, therefore, be passed down to another person or held in trust? Is there anything you can do to protect yourself and your asset?
Logistical concerns regarding a gun trust
Like anything else that you set up with another person, you have to coordinate the logistical aspects of a gun trust to make sure that everything proceeds smoothly. For example, if you own a gun safe that is highly advanced from a technology standpoint, you should work with your trustee or successor trustee to make sure that they can open the safe. This means that communication with this person is vital. Figuring out a way to access an excellent safe and make sure that the person could access the firearm readily when it comes time to do so is crucial to making the gun trust work period; otherwise, any other planning that you have done will be all for not.
Additionally, you should review your files and determine if any documents related to the firearm the trustee must be given access to. Purchase documents for the gun, safety disclosures, receipts, and any other documents that you believe will be important need to be provided when the trust is created. Otherwise, you are putting this person in a position where they will have to go searching for the information later, or in a worst-case scenario, they will not be able to access the information that they need for some purchase in the future or the event that they went to sell the firearm.
A hypothetical example to illustrate some critical points on gun trusts
Now that we have covered some important information about the world of gun trusts, I would like to present to you a hypothetical situation that could similarly impact your life. If you find yourself in agreement with this assessment, then you should consult with one of the estate planning attorneys with the Law Office of Bryan Fagan. We can help guide you through the circumstances surrounding estate planning in Texas so that you do not make any mistakes and help you and your family prepare for the end-of-life scenarios.
Suppose that you were to pass away in the future after establishing a gun trust with yourself as a trustee and your son as the beneficiary under the trust. According to your son and before your death, you had informed a mutual friend that a folder in your home container will. However, no will had been found. Instead of choice, trust documents were found. The innocent question was the gun trust that I referenced at the beginning of this paragraph. The gun trust's purpose was to help more easily and readily transfer firearms upon your death. Additionally, the trust was utilized to legally share assets that are federally regulated, including silencers and suppressors. Not only would the gun paraphernalia be used by your son but also by other people, as well.
Under the terms of this trust, do you work to add a real property, personal property, in any other asset you would like? You are not limited to only placing guns or other firearms into the trust. Once you passed away, your family who lived in a state neighboring to Texas attempted to contact your son about your passing. However, your son informed them that the small funeral had already occurred and that no ceremony went along with it. Your son additionally disposed of most of your property as he saw fit in according to the terms of the trust. Something seemed off about this whole process to your family and the neighboring state, so they applied to a Harris County probate court under an application of heirship.
Once that was done, your son attempted to intervene in their application of heirship proceeding. You are extended family members objected to your son's interfering in the case by arguing that the trust set up was only a gun trust that was meant to allow your son to receive a suppressor or silencer. They also claimed that nobody knew who the people who witnessed the creation of the trust were. Their identities were unknown. their point in making this argument was that outside of the creation of the trust to pass along the suppressor, no other trust items could be placed into the faith, and if they were, it would be an invalid trust.
Ultimately, a situation like this should point out how important it is for you to have an experienced attorney when creating add trust. There are ample opportunities for people two attempts to destroy or negate a legally created belief. You do not want to give that person more chance by improperly drafting documents or leaving out essential details. It is also crucial for you to be aware of the impact that funding a trust and adequately funding a conviction can have on the ability of the faith to serve its purpose. There must be sufficient funding of the trust to hold up in the event of a challenge.
Additionally, gun trusts can serve important roles for you and your family, but you must be prepared to follow through with the creation. It is not recommended for you to create a trust without the assistance of an experienced estate planning attorney. Chess creation can play an essential role in bettering your family's life in the future. Especially when it comes to sensitive assets like firearms, you do not want to leave to chance how these items are handled after your passing. The creation of a trust can go a long way towards helping your family prepare for unforeseen possibilities that may occur sooner rather than later; additionally, it will help your family prepare for your eventual passing.
Questions about the material contained in today's blog post? Contact the Law Office of Bryan Fagan
If you have any questions about the material contained in today's blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed estate planning and probate attorneys are available six days a week in person, over the phone, and via video for free of charge consultations. These consultations are an excellent way for you to learn more about the world of estate planning and probate law in Texas. I appreciate your interest in our law practice. We post blogs every week about the world of estate planning and probate in Texas. Please be sure to check out this space as we regularly update you on developments, changes, and exciting aspects of probate in estate planning. Remember that a will, trust, or other estate planning vehicle isn't designed to benefit you primarily. Instead, you take it upon yourself to help your family by thinking ahead and having a plan.