Utah Gun Trusts

PLEASE NOTE:  Some of the information in this blog post may no longer be current.

In recent months, proposed legislation that would regulate firearm ownership has provoked a spike in interest in what are commonly referred to as “gun trusts.”  In general, a “gun trust” accomplishes three primary objectives with respect to a Title II firearm.  First, it is administratively easier for a trust to purchase a Title II firearm than it is for an individual to purchase a Title II firearm.  Second, holding a Title II firearm in a trust makes it possible for multiple individuals to use the firearm as its legal owners.  And third, holding a Title II firearm in a trust makes it easier to pass the firearm to one’s family members on death.

A Title II firearm is any of the following:  (i) any automatic weapon (such as a machine gun); (ii) any short-barrel shotgun or short-barrel rifle; (iii) any specialized gun (such as a pen gun, umbrella gun or camera gun); (iv) any silencer; or (v) any other explosive device (such as a grenade, bomb or mortar).

A preliminary note:  This blog-post is intended to provide only general background information regarding gun trusts.  It is not intended to provide specific legal advice or guidance on the laws pertaining to the ownership, use or possession of firearms.  The reader should consult his or her own attorney.

As described below, the unique benefits of a gun trust relate to the registration and ownership of Title II firearms, which are governed by federal law.  A gun trust in Utah will thus be subject to federal law and to regulation by the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (the ATF).  There are no laws, regulations or official pronouncements that expressly state or guarantee that a gun trust will provide the benefits that are sought.  When asked, the ATF typically responds by explaining that it defers to state law regarding the validity and operation of trusts.  However, there appears to be a consensus among attorneys who practice in this area around the country, as well as tacit acknowledgment by the ATF, that the benefits described in this blog-post are available through a gun trust.

Trust Facilitates Purchase of Title II Firearm.  When an individual acquires a Title II firearm, he must complete ATF Form 4, which requires fingerprinting, a photograph and a background check of the applicant.  The applicant must then have Form 4 approved by a local chief law enforcement officer (typically the sheriff), and must pay a $200 transfer tax.  When a trust acquires a firearm, Form 4 must be completed, but no fingerprinting, photograph, background check or approval of a local chief law enforcement officer is required.  It is thus much easier to register a Title II firearm in the name of a trust than it is to register it in the name of an individual.

Trust Facilitates Use of Title II Firearm by Third Person.  A Title II firearm can have only one registered owner.  If a Title II firearm is owned by an individual, the owner may permit another person to use or hold the firearm only if that person is in the immediate physical proximity and under the supervision of the registered owner.  However, if the firearm is owned by a trust, legal ownership of the firearm is held by all trustees of the trust.  It therefore possible for a person to be named as trustee of the trust for a designated period of time and for the limited purpose of using and possessing a particular Title II firearm, without having the other trustees of the trust be physically present.  Holding the firearm in the trust thus makes it possible for an additional person to use the firearm as the registered owner, as long as that person has been properly designated as a trustee of the trust for the designated period of time.

In this sense, a “gun trust” is a different type of trust than a traditional trust.  A traditional trust exists for the benefit of the trust beneficiaries.  While a gun trust has beneficiaries (indeed, it would not be a valid trust if it didn’t), it exists largely for the benefit of the trustees inasmuch as it is designed to permit the appointment of special trustees to enable the appointed persons to use and possess the firearms.  (For a discussion of irrevocable trusts in Utah, see “The Role of Irrevocable Trusts” on the home page of this website.  For a discussion of Utah revocable trusts, see “Basic Estate Planning Information” on the home page of this website.)

Of course, certain persons (such as minors, persons with criminal records, and others) may be prohibited from owning Title II firearms, and therefore may not serve as trustees of a gun trust.

Trust Facilitates Transfer on Death.  If a Title II firearm is owned by an individual, the firearm becomes part of that person’s estate when he dies.  No re-registration of the firearm is needed when the decedent’s personal representative takes possession of the firearm, but re-registration is required when the firearm is distributed from the estate to an estate beneficiary.  At that time, both ATF Form 4 and ATF Form 5 must be completed (although the $200 transfer tax does not apply to the transfer).  If the firearm is held in a trust, re-registration would be required if the firearm is distributed from the trust to a trust beneficiary, just as when the firearm is distributed from an estate to an estate beneficiary.  However, if the trust provides that the firearm is to continue to be held in trust, the ability to possess and use the firearm can pass to the decedent’s intended beneficiaries without re-registration of the firearm.  This would be accomplished by naming the intended beneficiaries as trustees, as described above.

Possible Additional Benefits.  There are potentially two additional benefits that a gun trust can offer.  The first possible benefit is that, if future gun legislation is enacted that prohibits the ownership of certain types of weapons, and if that legislation “grandfathers” the owner rather than the firearm, the ability of an individual owner to transfer the firearm, either during lifetime or at death, could be greatly restricted.  Holding the firearm in a trust, however, could permit the firearm to remain in the family for generations.  The second possible benefit is that many gun owners may believe that their firearms are properly registered when, in fact, they are not.  If a firearm is not properly registered, it can be confiscated upon the person’s death.  The process of registering a firearm in the name of a trust can flush out any registration problems during the person’s lifetime, when they can still be fixed.

Rust Tippett is the author of this blog post.

Copyright 2013 UNLEPI, LLC, a Utah limited liability company.  All Rights Reserved.

This blog post in no way creates an attorney-client relationship between the reader and either Robert S. (Rust) Tippett or Bennett Tueller Johnson & Deere, P.C.  The reader should consult with his or her own estate planning attorney regarding his or her particular circumstances.


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