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Thread: Gun Trusts -- Preserving Firearm Ownership Into The 21st Century

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    GuncoHolic Black Blade's Avatar
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    Default Gun Trusts -- Preserving Firearm Ownership Into The 21st Century

    Gun Trusts -- Preserving Firearm Ownership Into The 21st Century, by Attorney Terry E. Hogwood

    Introduction

    There are two questions that every gun owner will be asked to address in the near future:

    1. Do you own and store firearms in your home?

    2. Do you want your children and their children to inherit your firearms without undergoing a background check?

    Question 1 is taken from a random selection of medical portal entrance questionnaire forms. The question appears on the form along with questions about swimming pools, drugs, alcohol etc and asks if each identified potential risk is present in the patient’s household. It is not a random question for philosophical consideration. It has recently even become the basis of litigation in a Florida Federal District Court.

    In that case, the state of Florida wanted to make it clear that Florida was legislatively prohibiting the forced disclosure of firearm ownership by medical patients. Apparently, some patients were being advised that if they did not answer the question concerning firearm ownership they: 1) could be denied Medicare or 2) could be refused treatment by the physician. Florida wanted to prohibit both of these outcomes understood by the legislature to be happening within the state on a regular basis.

    The District Court ruled that prohibiting the disclosure of firearm ownership was an unconstitutional infringement of the physician’s right under the First Amendment to conduct a full medical assessment. Gun ownership could be perceived, the court stated, as one contributing health risk factor a physician may need to address (based on the expertise of the physician in firearms related issues??) The questions did not, according to the court, constitute a Second Amendment infringement since the firearm owners still owned their firearms after answering the question.

    Not presented in the litigation was the fact that, under Obamacare, most, if not all, patients’ health records, including the initial questions asking about gun ownership, would be forwarded to the Health and Human Services Administration. Can any gun owner doubt, given the recent IRS scandal, that HHS could construct a database search keying on firearm ownership to secure a list of every person answering such questions? Looking mere months ahead, it is not unreasonable to assume that gun ownership questions will also be appearing in health care insurance applications as well.

    Question 2 is ripped directly from the Toomey Manchin gun registration legislation recently defeated in the US Congress. The legislation took great pains to insure that transfers between family members (parents, spouses, children, siblings etc) were protected and that the transferee(s) did not have to undergo a background check. Two glaring problems.

    First, why did the Congress believe it had the right to determine who family members are? For example, family can be children of a second spouse who were not adopted. Not on the list of what Congress defined as “family” and left a firearm by their mother’s second husband? Under the law as it was proposed, that person would have had to undergone a background check to take possession of the firearm.

    Second, and more important, who the Congress excludes today from requiring a background check it can include tomorrow and thus require that same excluded group of people to get a background check before “inheriting” firearms.

    Of more pressing significance, citizens of Colorado are running out of time to document magazine ownership. The state's new magazine ban will go into effect on July 1, 2013. The Colorado Legislature made sure that the magazine law's grandfather clause is not multigenerational. That is, the grandfather clause is limited to only then-current owners of magazines as of midnight on June 30th, 2013.

    Purpose of Paper

    Readers of this paper who own, are interested in owning or who regularly read the various firearm publications are aware of the initial use of the gun trust – to register, own and use Title 2 weapons (including machine guns, short barreled rifles/shotguns and sound suppressors).

    This paper stands for the proposition that, in light of the above two questions, the gun trust is also the perfect vehicle to:

    vest title to non-Title 2 firearms in a gun trust and thus be able to answer Question 1 NO, I do not personally own and store firearms in my home and

    insure private ownership of firearms (and related equipment such as magazines) in futuro by utilizing a gun trust to answer Question 2 YES, I want my children/grandchildren to inherit my firearms without having to undergo a background check.
    What are guns?

    For gun trust purposes, the author believes that a donor/settlor (the person(s) creating the trust) should differentiate between Title 2 weapons and Standard weapons (rifles (bolt action, semi-auto and single action), pistols (semi-auto, revolver and single action) and all shotguns (save for those with barrels of less than 18”)). In addition to using a gun trust to secure Title 2 weapons (and thus forego fingerprinting, background check, law enforcement approval of the weapon acquisition), a separate and distinct gun trust for Standard firearms and related accessories can also be utilized to fix Standard gun ownership in the trust (as distinguished from personal ownership) and thus insure the above two questions are answered correctly.

    Guns are also classified as personal property. Stated another way, they are not real estate. Their transfer is by delivery of the weapon to the transferee. The law does not require a formal executed and acknowledged document to transfer gun ownership. However, a bill of sale or similar document of a weapon or accessories (such as magazines) would stand as written evidence of a weapon’s transfer to a gun trust.

    What is a trust?

    Generally, a trust is a relationship created by an individual (Settlor) utilizing a formal, legal document whereby one or more persons or legal entities (Trustee) holds title to specific property of the Settlor subject to certain duties to use and protect it for the benefit of others, including potentially the Settlor (Beneficiary). The written trust document must comply with all applicable laws of the state where the trust is to be administered. For example, in Texas, if a Settlor retains both the legal title and all equitable interests in property in itself as both the sole Trustee and the sole Beneficiary, a trust is not created and the Settlor holds the property as its own.

    A trust can only be created for legal purposes. A trust can be revocable (at the will of the Settlor) or irrevocable. Generally, a trust cannot last forever (perpetual). Title to the property made the basis of the trust must vest in the named beneficiary (ies) within a certain time period; generally stated as a life or lives in being at the time of the creation of the interest plus 21 years plus a period of gestation (Rule Against Perpetuities).

    What is a gun trust?

    A gun trust is a revocable trust (revocable at the will of the Settlor) which is created to comply with the state laws where written as well as pertinent Federal laws/regulations to manage, own, possess and keep possession of firearms and related accessories within the trust past the death of the initial Settlor(s). In the author’s opinion, there are two distinct types of gun trusts:

    Gun trusts created for the ownership and management of Title 2 firearms and

    Gun trusts created for the ownership and management of Standard firearms.
    The key to proper trust management of firearms is to keep separate the Title 2 firearms from Standard firearms. Equally as important is for the reader to understand a generic, revocable trust form is not suitable for firearm management. A gun trust instrument must be tailored to carry out the Settlor’s intentions regarding ownership of firearms and who shall ultimately own such firearms in the future.

    How does a gun trust work for Standard firearms?

    A Settlor (in community property states, husband and wife):

    Retains an attorney to draw up the revocable gun trust instrument

    Creates the Standard gun (accessory) list for attachment to the gun trust instrument

    Has the named Trustee(s) (along with the Settlor(s)) execute the trust agreement agreeing to serve as Trustee as well as acknowledging receipt of the trust property (Standard firearms and related accessories).

    Transfers via a bill of sale to the Trustee(s) all Standard firearms and related accessories to be owned by the trust.
    The Trustee(s) thereafter administers the gun trust, including the use of written licensing documents to allow the use of firearms by the Beneficiary(ies) or third parties. Since the trust retains its revocable nature until the terminating event(s) specified in the instrument, the parties (Settlor(s)/Trustee(s) and Beneficiary(ies)) may, for instance at the death of one of the Settlors, amend the trust to provide for new Settlors and/or Trustees and/or Beneficiaries and a new terminating event without the trust terminating.

    No matter what the ATF decides via its regulation of Title 2 firearms, after the creation of a gun trust for Standard firearms, the answer to:

    Question 1 is: No, I do not own and store firearms in my home.

    Question 2 is: Yes, utilizing a gun trust will allow my heirs to inherit my guns without undergoing a background check.


    About The Author: Mr. Hogwood is an attorney licensed in Texas. He may be reached at hoggy@nol.net.
    When you're born you get a ticket to the freak show. When you're born in America , you get a front row seat. - George Carlin


  2. #2
    Gunco Addicted for life j427x's Avatar
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    the big "O" and his team of liberal lawyers are going to close the door on trusts-- the lame duck is on the move!

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    Gunco Regular jfreakofkorn's Avatar
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    hmmm .... interesting thread ...

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