What is a Gun or NFA Trust?
Gun trusts go by various names, including “NFA trusts” and “firearms trusts”. A gun trust is a legal instrument designed for acquiring and holding legal title to firearms. Most gun trusts are designed to hold title to weapons regulated by the National Firearms Act (or “NFA” for short). Some gun trusts are designed to also hold title to non-NFA firearms, or Title I firearms.
Parties to a Gun Trust
At minimum, a gun trust will have a settlor (sometimes also called a donor or grantor), who is the person who creates the trust, contributes property to the trust, and retains the ability to revoke or amend the trust; a trustee, who will act on behalf of the trust and ensure that terms of the trust are honored, as well as possess and use the NFA weapons owned by the trust; and one or more remaindermen or beneficiaries, who will ultimately receive the property held by the trust or the proceeds of the sale of the trust property.
Weapons regulated by the NFA go by various names such as “NFA Weapons”, “NFA Items”, “NFA Firearms”, “Title II Firearms” or “Class 3 Firearms”, and include suppressors (known as “silencers” in the NFA), short barreled rifles (or “SBRs”), short barreled shotguns (“SBSs”), machine guns, destructive devices, and “any other weapon” (“AOW”). The ownership of NFA Weapons is heavily regulated at both the State and Federal level. Gun Trusts in recent years have become a more popular means of registering NFA items with the Bureau of Alcohol, Tobacco, Firearms and Explosives (often called the “ATF” or the “BATFE”), especially silencers, SBRs, and SBSs.
Are NFA Trusts Similar to Conventional Trusts? How Are they Different?
Similarities Between Gun Trusts and Traditional Trusts
Gun trusts are similar in some respects to conventional estate planning trusts. For instance, as with conventional trusts, an NFA trust will hold property subject to certain terms and conditions. And there will also be a settlor (also called a “donor” or “grantor”), who donates property to the trust; one or more trustees, who will act on behalf of the trust; and one or more beneficiaries of the gun trust, who will ultimately receive the assets held by the trust or the proceeds of their sale.
Additionally, a gun trust can be either revocable (meaning it can be revoked or amended) or irrevocable (meaning it cannot be revoked or amended). Neither Massachusetts NFA gun trusts nor Maine NFA gun trusts require any registration, disclosure or public filings. The only people who need to know about your trust are those you choose. That’s where the similarities between gun trusts and conventional trusts end.
How Gun Trusts Are Different: The Importance of Federal and State Gun Laws
Unlike conventional trusts, a gun trust is designed specifically for the complex regulatory issues involved in possessing, owning, and transporting NFA items such as SBRs and suppressors. A good NFA trust will address NFA regulations as well as those imposed by local and state law.
Massachusetts NFA trusts should be specifically designed to account for the complexities of Massachusetts firearms law. This is critical, as violation of the NFA or state or local law can be punished severely. For instance, violation of the NFA can result in fines of up to $250,000, forfeiture of all firearms weapons and up to 10 years in prison.
A high-quality gun trust drafted by an experienced gun trust lawyer will contain provisions that grant trustees of the NFA trust the authority they need to use and enjoy the NFA Trust’s property and to properly administer the NFA Trust – but also protect the rights of the settlor and the beneficiaries. Such a trust will also provide instructions on dealing with both routine and unanticipated events. Unlike assets held by conventional trusts, the sale or distribution of firearms held by a gun trust requires compliance with state and federal law, and therefore requires careful thought and planning.
What Are the Benefits of an NFA Gun Trust?
If one uses a gun Trust to acquire an NFA Firearm, the gun trust will purchase and hold title to the firearm. Using a gun trust to acquire NFA Items, rather that acquiring them as an individual has many advantages, including:
- Sharing of NFA Items
Using an NFA gun trust, you can appoint other trustees who can lawfully possess firearms held by the trust. In contrast, if you own a Title II Firearm individually, only you, as the registered owner of that Title II Firearm, may lawfully possess that firearm.
2. Estate Planning
Using a gun trust, you can control who will receive your firearms when you die, or provide that the NFA trust shall continue to operate for as long state law will allow. A trust can last generations in Massachusetts and indefinitely in Maine or New Hampshire. A qualified Maine or Massachusetts NFA lawyer can draft a comprehensive multigenerational NFA trust that can serve as a legacy for your family’s enjoyment and security for generations to come.
3. Contingency Planning
Are you concerned about who will store your firearms if you become incapacitated or legally prohibited from owning guns? A gun trust can allow you to plan for these sorts of events. You will also have the option to add one or more trustees (in multiple states) who are knowledgeable about firearms, including NFA Items, who can see to it that your firearms are properly cared for, stored, or transferred in compliance with state and federal law.